The process initiated by the Ministry of Law to conduct mutual legal assistance (MLA) with various countries to investigate and exchange information on 'black money' hidden abroad has been stopped.

Although the initiative started a year and a half ago to return illegal assets acquired from various crimes including corruption from abroad, sharing information in related investigations and monitoring persons involved in crimes, in the first phase, MLA with five countries and then with other countries as needed, but the government has not been able to complete it.

In the first phase, Nepal initiated MLA with India, America, UAE, Hong Kong and Singapore. After that, a government official said that the decision was delayed due to the fact that the process of drafting the draft was discussed at various stages with the officials of the respective countries.

In particular, the House of Representatives on 24 March 2080 and the National Assembly on 5 March 2080 amended various laws including the Prevention of Money Laundering Act, opening the way for investigations into money laundering by the agencies that investigate offenses related to various crimes. 

19 laws were amended through a bill to amend some Nepali Acts, which came into effect after being certified by the President on 30th March. Among them, along with the amendment of laws such as cooperatives, insurance, foreign investment and transfer of technology, organized crime prevention act, the law on money laundering was amended and the way was opened to investigate the 'suspect' persons in money laundering based on the crimes that are investigated by authorities, police and others.

Since then, the authority and the police have also started investigations into money laundering under related crimes, and the government has initiated MLA with five countries in the first phase at the request of the police and the authority and other agencies to bring the property acquired by crime in Nepal to different countries and to make it a legal basis for investigation. 

After receiving a positive response from the concerned countries, the Ministry of Law was engaged in the drafting of the MLA. However, even for one and a half years, this issue has not been resolved.

Joint Secretary Kamal Bahadur Khatri, Spokesperson of the Ministry of Law, said that the draft for MLA is being worked on with various countries to determine the legal basis required for the investigation of crime. Spokesperson Khatri said, 'This matter is being discussed, it has not been finalized, the government will take the necessary decision after the drafting work is completed.' The government has not been able to return some of the accused who got political protection. 

Last time, the international organization 'Financial Action Task Force' (FATF), which monitors money laundering and terrorist activities, has placed Nepal on the 'grey list' for 2 years from 2025. Nepal was previously included in this list from 2008 to 2014.

Despite some improvements in law making, Nepal has been included in the 'grey list' since the government is not serious about implementing the laws. FATF monitors financial transactions and terrorist activities in 187 countries including Nepal. 

An official of the Prime Minister's Office said that one of the main reasons for tarnishing the image of Nepal is the crime related to corruption and money laundering, and said that since there are legal hurdles to bring back to Nepal the assets acquired from such crimes and taken abroad and to bring those involved to the scope of action, necessary initiatives have been taken to make bilateral legal assistance agreements with some countries.

The official said that in the first phase, bilateral discussions are being held with the respective countries to make MLAs with five countries. The official informed that the Ministry of Law, Justice and Parliamentary Affairs is preparing its initial draft.

The fact that the then managing director of Nepal Telecom Sunil Paudel and the then executive director of Security Printing Center Vikal Paudel parked black money from Nepal in banks in Singapore and America by expanding the 'organized net' related to telecommunication and technology procurement was revealed by the investigation of the Abuse of Authority Investigation Commission.

Paudeldway opened an illegal account in Singapore's United Overseas Bank (UOB) and it was revealed that the commission he received from Nepal as a bribe was parked in the same bank. After it was found that all the commissions connected with public procurement through Paudeldwaya had been collected abroad, the authority instructed the government to take initiatives for refund. 

Similarly, when two ships were purchased for Nepal Airlines Corporation, there was a commission deal between government officials, contractors, administrators and political collusion, and the money was laundered and deposited in foreign banks.

Last time, the authority investigated the corruption case which was filed in the special court against Congress MP and former minister Mohan Bahadur Basnet and former law secretary Dhanraj Gyawali, and the corruption case filed in the special court is also saying that the commission game is the root cause and the 'deal' may have been done abroad.

The Authority requested the government to determine the legal basis for investigating the fact that the money obtained from many other crimes may have been collected abroad, and the property obtained from other crimes may have been taken abroad. Chief Commissioner of Authority Prem Kumar Rai criticized the government on 24 Baisakh 2082 in the parliamentary committee saying that the government is not sensitive about this.

Chief Commissioner Rai sought the support of the parliamentarians saying that the government did not support the federalism and national concerns committee meeting under the National Assembly.

We are still not able to bring the money from Singapore, America, UAE, why do we need full support, we had to make a bilateral agreement with them, we said to the government. But the government has not taken any steps in this direction yet," Rai expressed his anger in the committee meeting, "Akhtiar has repeatedly written that MLA should be done with those countries. Now a small task force has been formed, but let's do it on a fast track, Singapore has already written that it will send the money from corruption, make a bilateral agreement. But we could not show readiness to make a deal, it had to be done on the fast track. UAE also has the same rhythm, he says let's do it, we don't show readiness, the situation is like that.

Now, just like the Nepalis have become NRN, the network of corruption is also internationalized in various ways.

State regulation is weak in the transparency of transactions in sectors such as import/export, public procurement, cooperatives, non-governmental organizations, real estate transactions, gold and silver businesses, accounting/law professionals. Similarly, the crime record system is not integrated with the government. In Chait 2080, the law on money laundering was amended and the authority and the Nepal Police were given the responsibility to investigate it.

Even after that, if the authority started investigating those involved in the crime of money laundering apart from corruption, there was a legal obstacle to access the black money hidden abroad. Since Nepal's situation in corruption control and maintaining good governance is pathetic, Transparency has also been labeling Nepal as a 'highly corrupt country' for a long time. 

Nepal got only 34 points out of 100 in the Corruption Perceptions Index (CPI) of the latest report (2024) published by Transparency International (TI). Out of 180 countries, Nepal is ranked 107th. In CPI 2023, Nepal was ranked 108th with 35 points.

FATF monitors the crime of money laundering and financial investment in terrorist activities. The World Bank, the International Monetary Fund, and the related agencies of the United Nations have repeatedly warned to do effective work against the crime of money laundering. In 2012, after FATF warned that Nepal would be included in the 'black list', Nepal made some reforms in the law. Under the pressure of FATF, the government amended 19 laws in March 2080.

The revised law has also given authorities and Nepal Police the authority to investigate and prosecute complaints related to money laundering. 

Organized criminal groups and illegal or fraudulent extortion, subversive and terrorist related, human trafficking and trafficking, all forms of sexual exploitation, corruption, drug trafficking, illegal trafficking of arms/equipment, trafficking of stolen goods, fraud, counterfeiting, counterfeiting/currency, production of fake goods/illegal copying or theft, environmental destruction, life-related and More than 3 dozen crimes including dismemberment, kidnapping and body hostage, theft/robbery, customs/excise duty and tax evasion can be investigated in connection with money laundering.

According to Nepal's National Risk Assessment Report (NRA)-2020, corruption, revenue (tax) evasion, banking/financial crime, money laundering, human trafficking, environmental crime, law abuse have been listed as high-risk crimes. It has been confirmed through some investigations that the property acquired from this crime is kept abroad. If the investigation and prosecution of high-risk crimes are effective, Nepal can get more points in the evaluation to get out of the "grey list". However, there has been no effective work by the government. 

There is no fine regulation on cooperatives that are outside the regulation of Nepal Rastra Bank. Even after committing banking offences, people who have fled abroad have taken large sums of money there. However, there is also a legal hurdle to return them. A case is going on in 5 courts of Nepal against Gitendrababu (GB) Rai who escaped by cheating the cooperative. However, the government has not been able to bring him to Nepal. It is said that more than 4 trillion 5 billion has flowed into cooperatives in Nepal. However, it has not been effectively regulated.

The commission led by ex-judge Mohanraman Bhattarai to investigate the financial irregularities within the Samaj Kalyan Council and the assets brought in through GAS has also submitted a report to the government stating that the investments made through GAS should be monitored in connection with terrorist activities, but the suggestions pointed out in the report have not been implemented.

One of the reasons why Nepal was included in the "grey-list" by FATF last time is the lack of regulation on the investments made through gas and the lack of action against those who abuse this property. Another risky sector where black money earned from illegal assets is invested is 'real estate'.

"There is a tendency to take the money earned from all these kinds of crimes abroad and accumulate it and the people involved in the crime live safely there, but some countries have not made legal arrangements to take back the people involved in this crime and the money earned from such crimes. The head of the authority has already mentioned this matter in the parliamentary committee," said a secretary. By bringing back money and people involved in crimes, an environment can be created to take action. However, the government has not been able to return them with the property acquired from crime. Sisam Malla, managing director of Himalaya Finance Limited, was found guilty in 2069 by the Appellate Court of Patan and sentenced to 6 years imprisonment and a fine of 1382 million 41294 rupees. She is not yet legal. Despite the police issuing a 'red notice' against Malla through Interpol, she has not returned from America.