Stakeholders have pointed out that rapid reforms are needed within the next one year to get out of the ‘grey list’ of the Financial Action Task Force (FATF), an international forum that monitors financial transactions. One of the two years given by the FATF to escape from the ‘grey list’ has passed.

They emphasize that all bodies should work effectively and responsibly as they can only exit the 'grey list' if they complete all the requirements within the remaining one year. On February 25, 2025, Nepal was placed on the 'grey list' and the FATF has formulated an action plan to exit it. Only if the same plan can be implemented effectively within a year can it be exited.

Stakeholders say that all bodies should be alert as they will have to remain on the 'grey list' for some more time if the action plan cannot be implemented effectively. 

On the occasion of the National Anti-Money Laundering Day, 2082, organized in Kathmandu on Wednesday with the main slogan 'Anti-Money Laundering: Transparency and Financial Governance', stakeholders said that joint efforts of all bodies are indispensable to exit the 'grey list'. In the program, Finance Minister Rameshwor Khanal directed to work to exit the 'grey list' within the next one year. He emphasized that all sectors and bodies should work responsibly to exit the 'grey list' as soon as possible. 

Finance Minister Khanal has said that everyone should work together to remove Nepal from the 'grey list' within the next one year by completing all the necessary reforms ahead of schedule. 

The FATF, which monitors financial transactions, has placed Nepal on the 'grey list' of countries involved in money laundering. One year has passed since the FATF gave Nepal two years to take effective steps against money laundering by establishing good governance. Therefore, all sectors and agencies should work responsibly to remove Nepal from the list as soon as possible in the remaining one year, said Finance Minister Khanal.

‘The international community is not putting any pressure or coercing Nepal to implement these reforms, this process has been taken forward with the aim of making its own institutions corruption-free, transparent and well-governed and strengthening the economy,’ he said. ‘The ongoing reform efforts to prevent money laundering do not create additional financial liabilities or unnecessary costs.’

Stating that one of the reasons for foreign investment not coming in as expected is weak confidence in the financial system, Finance Minister Khanal stressed the need to improve the investment environment through reforms. He also recalled that the FATF and the Asia Pacific Group have suggested various issues to be improved by January 2027.

Finance Minister Khanal pointed out that there has been some improvement in the last one year and the need to complete all the remaining reform works within the next one year. He expressed the expectation that all the reform works would be completed by the end of 2026. Emphasizing the need to make the investigation, prosecution and action process effective in cases related to money laundering, Finance Minister Khanal said that a strong case with evidence should be prepared and arrangements should be made to immediately seize assets.

The Finance Minister suspects that there is a problem with transparency not only in the financial market but also in the capital market. For this reason, he said, a provision has been implemented from 1 Magh 2082 that commercial transactions of more than five lakh rupees should be conducted only through the banking system. Although this provision has been said to have created problems from the private sector, he clarified that the limit on cash transactions will not be increased.

Minister for Law, Justice and Parliamentary Affairs Anil Kumar Sinha said that the legal, policy and institutional challenges seen globally should be addressed more effectively for Nepal's financial integrity and good governance. He said that the current situation is not only a challenge but also an opportunity for self-review and further improvement.

Minister Sinha said that now is the time to emphasize on the effective implementation of the action plan. 'The action plan to be done by 2083 Magh to get out of the grey list has been decided,' he said, 'All bodies and sectors must fulfill their respective responsibilities in its implementation.' At the program, Nepal Rastra Bank Deputy Governor Bam Bahadur Mishra warned that international financial institutions may tighten their transactions with Nepal while Nepal is on the 'grey list.'

This could not only create serious social and economic problems within the country, but also pose a challenge to Nepali citizens at the international level, including restrictions on travel, remittances and other international transactions.

‘Being on the grey list is seen by the international community as Nepal’s weakness in controlling financial crimes, so effective reforms are essential to get out of it,’ Mishra said. Anti-money laundering is not the responsibility of any single agency alone, but requires a collective effort from all agencies linked to the economy, said Gajendra Kumar Thakur, Director General of the Money Laundering Investigation Department. 

More than 50 government agencies and more than 80,000 indicator organizations are involved in this area. Pointing out the risk that three to five percent of the gross domestic product could be related to terrorist activities and illegal transactions, Director General Thakur explained that Nepal’s economy is still cash-based, the informal economy has a large share, modern systems have not been effectively regulated, there is a lack of skilled manpower and technology, and even though laws have been enacted, implementation is weak.

He said that the risk of money laundering is high in the real estate and gold and silver sectors. "The need of the day is to give special emphasis to implementing a risk-based system, legal reform and updating, coordination and cooperation between investigative agencies, expanding international coordination, reducing crimes committed through modern technology, building an integrated information sharing system, regulating the digital economy, and controlling cybercrime," he said.

Attorney General Savita Bhandari said that since Nepal has made a clear policy commitment at the international level to prevent money laundering, special attention has been paid to the formulation and effective implementation of related laws, keeping this issue as a high priority. She stressed the need to implement a risk-based monitoring and regulation system as per FATF standards. She said that the traditional investigation style alone is not enough. She pointed out the need to make the investigation and prosecution process more effective, evidence-based, and result-oriented.

"The tasks assigned to be done by the Attorney General's office to get out of the grey list are being carried out effectively," she said. However, the FATF has stated that Nepal's efforts to get out of the 'grey list' are insufficient. The FATF argues that although Nepal has been given two years to get out of the 'grey list' and an action plan has been prepared for it, the implementation has not been effective. 

It was stated that Nepal's efforts were insufficient at the fourth plenary meeting of the FATF held in Paris, France from 20 to 24 October 2025. The Nepali team also participated in the meeting. In a statement issued by the FATF after the meeting, it is stated that although Nepal has continued its reform efforts, they are still insufficient and it is necessary to accelerate further. The National Coordination Committee for the Prevention of Money Laundering, which participated in the FATF meeting, has stated that the FATF's action plan should be implemented to get out of the 'grey list' and progress based on evidence or results should be shown.

Nepal had made a high-level political commitment to strengthen the effectiveness of its anti-money laundering system with the FATF and the Asia Pacific Group (APG) in February 2025. The FATF has pointed out that although the path taken by Nepal to exit the 'grey list' is correct, its efforts are not sufficient, so it should be accelerated. The FATF says that although the action plan set by Nepal to exit the 'grey list' within the specified time is correct, the implementation has not been fast enough. For this, the FATF has made seven-point suggestions.