I/NGO funding scrutiny on anvilFinancial transactions and activities of non-government organisations and international NGOs will come under increased scrutiny as the government prepares a new national strategy for combating money laundering and terror financing.
Financial transactions and activities of non-government organisations and international NGOs will come under increased scrutiny as the government prepares a new national strategy for combating money laundering and terror financing.
The strategy that would supersede the National Strategy and Action Plan on Anti-Money Laundering and Combating Financing of Terrorism (2011-2016) will bring I/NGOs under the anti-money laundering purview for the first time.
The move, according to officials, is in line with the recommendations of the Financial Action Task Force (FATF), a global anti-money laundering body. The FATF states that non-profit organisations (NPOs) may be vulnerable to abuse by terrorists as they enjoy public trust, have access to considerable sources of funds, and are often cash-intensive.
“The new strategy will ensure proper monitoring of funding sources and spending by the I/NGOs as they are not being properly regulated due to weak regulatory institutions,” an official involved in drafting the strategy told the Post.
Since there is no strong state control over I/NGOs operating in Nepal, the official warned, unwanted groups might misuse the situation in the name of supporting some social or economic causes.
As countries like India and China are also concerned about possible misuse of Nepal’s territory by “unwanted groups”, officials said the new strategy is expected to allay the fears. More than a hundred registered INGOs are currently operational in Nepal while the number of NGOs is over 20,000. Sector regulator Social Welfare Council (SWC) faces an uphill task of monitoring all the organisations.
According to the Finance Ministry, Rs24.95 billion has been proposed through 204 INGOs for various activities in the fiscal year 2018-19.
SWC Information Officer Hari Tiwari said, “In the last fiscal year, I/NGOs transferred Rs44 billion into Nepal through their projects and programmes.”
The I/NGO sector is worried about the controversial National Integrity Policy on the anvil. NGO workers say the organisations need not be brought under the anti-money laundering regime as there was no incidence of money laundering from the organisations currently operational in Nepal.
Arguing against supervision, NGO Federation of Nepal President Gopal Lamsal said, “As I/NGOs submit audited reports to the SWC every year, I don’t think they should be watched for money laundering.”
Lamsal insists that the transactions of most NGOs are transparent, suggesting that the few that may have violated norms should be dealt with separately.
The National Integrity Policy being discussed at the Cabinet envisages far-reaching restrictive measures and controls on I/NGOs. The organisations have advised the government to form an autonomous Social Develop-ment Council led by the prime minister to replace the SWC.