KATHMANDU: The Financial Action Task Force (FATF) has refused to remove Nepal from its “Grey List” of countries under increased monitoring following its plenary meeting in Paris.

The decision highlights that despite Nepal’s high-level political commitment to reform, the global anti-money laundering watchdog concluded that the country has failed to make sufficient progress.

To successfully exit the list, the FATF emphasized that Nepal must fully implement a comprehensive action plan to rectify its strategic deficiencies in combating financial crimes.

To meet international standards, the FATF outlined seven critical action items Nepal must enforce.

These include strengthening the risk-based supervision of high-risk sectors like commercial banks, cooperatives, casinos, and real estate, alongside identifying and penalizing major illegal hundi (informal money transfer) operators.

Additionally, authorities must enhance the capacity and coordination of investigative agencies to increase prosecutions and effectively seize the proceeds of crime.

While the new government had pledged to prioritize and streamline investigations into serious financial crimes, the FATF maintained the grey list status, noting a distinct lack of visible improvement under the new leadership.