UML vice-chair Paudel arrested in connection with money laundering; Nepal Remains on FATF Grey List, Further Reforms Needed

Surkhet / June 22: Vice-Chair of the CPN (UML) and former finance minister Bishnu Prasad Paudel has been arrested from Surkeht at 6 PM on Monday in connection with a money laundering investigation.

According to the Chief District Police Office, Surkhet, Deputy Superintendent of Police Thakur Prasad Poudel, former Minister Paudel was arrested from the meeting hall of Shubha Hotel located at Birendranagar Municipality-3 of Surkhet.

Superintendent of Police Poudel said that Surkhet Police took the UML leader to Nepalgunj through a land route to send him to Kathmandu today.

It is reported that Vice President Poudel had come to Surkhet for a program to review the UML’s election and collect suggestions regarding party reorganization.

Paudel hails from Rupandehi, Butwal Sub-metropolitan City-9 and is currently residing at the Saibu Housing Project in Lalitpur, Lalitpur Metropolitan City-25, according to police.

UML Vice-chair Paudel was arrested by a special police team of 10 led by Superintendent of Police Thakur Prasad Poudel.

Nepal Remains on FATF Grey List, Further Reforms Needed

The international anti-money laundering watchdog, the Financial Action Task Force (FATF), has stated that Nepal remains on its monitoring list, commonly known as the “grey list,” and requires further reforms to strengthen its anti-money laundering and counter-terrorist financing framework.

According to the FATF, although Nepal has continued its reform efforts, the measures taken so far remain insufficient and additional improvements are necessary. The watchdog noted that the decision was made on 19 June 2026.

FATF has advised Nepal to continue implementing its action plan aimed at addressing identified deficiencies. It has called on the country to strengthen its understanding of key risks related to money laundering and terrorist financing.

While acknowledging some progress, FATF stressed that Nepal needs to undertake strategic reforms and develop a clear implementation roadmap. The organization emphasized the need for a better understanding of risks associated with money laundering and the financing of terrorist activities.

The watchdog also recommended adopting risk-based supervision and corrective measures in sectors considered vulnerable to financial crimes, including commercial banks, high-risk cooperatives, casinos, dealers in precious metals and stones, and the real estate sector.

FATF further urged Nepal to improve the identification and prevention of illegal financial transactions, including hundi and other informal money transfer systems. It recommended strengthening the institutional capacity of agencies responsible for anti-money laundering efforts and making investigation and prosecution processes more efficient.

The organization also emphasized the need to identify major providers of illegal currency and value transfer services, including hundi operators, and to ensure legal action and penalties against them without undermining financial inclusion.

In addition, FATF called for enhanced coordination and capacity among agencies investigating money laundering cases and urged Nepal to demonstrate increased effectiveness and results in money laundering investigations and prosecutions.

The watchdog said Nepal should effectively identify, trace, freeze, confiscate, and, where appropriate, recover assets derived from criminal activities and the instruments used in such crimes according to the nature of the risks involved. It also stressed the need for Nepal to address strategic deficiencies under its action plan and further align its systems with international standards.

Nepal was placed on the FATF grey list in February 2025 due to shortcomings in complying with anti-money laundering laws and regulations. Following its inclusion on the list, Nepal made a high-level political commitment to FATF and the Asia/Pacific Group on Money Laundering (APG) to strengthen the effectiveness of its anti-money laundering and counter-terrorist financing systems.

Nepal had previously exited the FATF grey list in 2014 after implementing a clear roadmap of regulatory reforms, leading to the removal of direct FATF monitoring. RSS