1. Nobody shall launder or cause to launder assets.
2. The asset is deemed to be laundered if it is found to be unnatural in comparison to his income source or financial condition or he is living a life unnaturally high in standard or proved to have donated, granted, gifted, provided loans and contributions more than his capacity, he is required to prove the sources of earnings.
3. An asset shall be supposed to have laundered in case anyone directly or indirectly earns from tax evasion or terrorist activities or invest in such activities. Further, the asset shall be supposed to have been laundered, if assets have been acquired or possessed, utilized or held by committing any or all offenses stipulated as follows:
- An offense under prevailing arms and ammunitions laws
- An offense under prevailing foreign exchange regulation laws
- The offense of murder, theft, cheating, forgery documents and any other act declared illegal by law
- An offense under prevailing drug addiction control law
- An offense under prevailing cooperative law
- An offense under the prevailing bank and financial institution laws
- Other offenses that the Government of Nepal prescribes by publishing in the Nepal Gazette.
4. Every Bank and Financial Institutions and Non-Financial Institutions shall maintain a clear identity of a person while establishing any kind of business relationship with him or her.
5. Every person willing to establish a relationship with financial or non-financial institutions must submit the documents as follows: Family title, copy of citizenship or password, water or electricity bill, copy of citizenship of nominee, permanent residential address, and profession, or business.
6. In the case of firms, required documents as follows: a copy of the document certifying incorporation, registration of the institution, documents presenting name, family title address, profession, the business of the board of directors, and executive directors.
7. In case of transactions made through negotiable instruments: name, family title, address of issuer, and payee of or from such instrument.
8. Banks, financial institutions, and non-financial institutions are required to keep separate records of documents and transactions of each customer.
9. Formation of the Coordination Committee
- Members of Committee Roles
- Secretary, Ministry of Finance Coordinator
- Secretary, Ministry of Law, Justice, and Parliamentary System Member
- Secretary, Ministry of Home Member
- Secretary, Ministry of Foreign Affairs Member
- Deputy Governor, Nepal Rastra Bank Member
- The chief of the FIU shall act as secretary of the Coordination Committee.
10. Financial Information Unit (FIU)
- There shall be a Financial Information Unit in Nepal Rastra Bank for collection and analysis of information relating to money laundering.
- The Governor of Rastra Bank shall appoint the chief of FIU from among first-class officers, at least, of Rastra Bank.
- The office of the FIU shall be placed in Rastra Bank and the Rastra Bank shall manage the staff required for it.
11. The government entity, bank, financial institution, and non-financial institution shall maintain records of the amount transacted beyond the limit prescribed by Nepal Rastra Bank at a single or series of transactions by a person.
12. The government entity, bank, financial institution, and non-financial institution shall investigate and inquire about any transactions which seem to be doubtful or transacted with the motive of asset laundering.
13. The government entity, bank, financial institution, and non-financial institution shall inform FIU about the over transacted within seven days of the event and doubtful transactions immediately.
14. Anyone committing the offense of laundering asset or money is subject to the following punishment:
- Fine equal to the amount involved in offense or imprisonment from one year to four years or both punishments to any person or staff of a bank, financial institution or non-financial institution
- In case the offender is chief of BFIs or non-financial institution or a public servant, then ten percent more than punishment in 14(a).
- The person assisting or urging to commit offenses shall be punished half to the offender.
15. There shall be five lakhs rupees fines to a bank or financial institution and from twenty-five thousand to one lakh to non-financial institution as per the degree of offense for their act of not submitting documents to FIU.
16. Any person engaged in concealing or destroying evidence is subject to imprisonment for one month to three months or fifty thousand to one lakh fine or both as per the degree of the offense. The punishment will be half to that of the offender for a person assisting or urging to conceal or destroy evidence.
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