The government of Nepal has been told to strengthen its anti-money laundering and counter-terrorism financing policies, especially in the gambling industry. The Asia/Pacific Group on Money Laundering identified Nepal as a country that is exposed to money laundering threats from neighboring jurisdictions because of its unprotected borders and close economic and trade links to other nations.
Criminals Laundering Money at Casinos in Border Region
The APG examined Nepal’s vulnerability to money laundering and found that criminals target casinos, particularly in the border region, to launder proceeds of their illegal activities carried out elsewhere. In its report, the inter-governmental organization stated that Nepal’s casinos operate under an “unclear regulatory framework”, making them prone to criminal activities.
The APG also noted that Nepalese authorities don’t have adequate measures in place when granting casino licenses, with applications not thoroughly reviewed. For instance, in the last five years, the agency that has oversight of the casino industry, the Ministry of Culture, Tourism and Civil Aviation, approved the applications of all 19 new casinos.
At the moment, Nepal is home to a total of 28 licensed casinos, some of which are located near the Indian border.
Nepal Not Fully Compliant with FATF Recommendations
According to the APG, Nepal also failed to fully comply with recommendations from the Financial Action Task Force (FATF) regarding supervision of the country’s casino industry.
The APG report calls on the Nepalese government to improve risk-based supervision of certain sectors, and the casino industry must be given top priority.
