Elected officials face close scrutiny of dealingsThe government has proposed defining elected political leaders at the provinces and chiefs and deputy chiefs of local units as ‘Domestic Politically Exposed Persons’ for greater scrutiny of their financial transactions.
Published at : December 26, 2018
Updated at : December 26, 2018 19:38
The government has proposed defining elected political leaders at the provinces and chiefs and deputy chiefs of local units as ‘Domestic Politically Exposed Persons’ for greater scrutiny of their financial transactions.
The country elected the people’s representatives at the provinces and the local level last year. An amendment has been proposed to the Money Laundering Prevention Act-2008, which mandates enhanced scrutiny of the financial transactions of the Politically Exposed Persons (PEPs).
Currently, domestic PEPs include: President, Vice President, ministers, members of federal parliament, officials of constitutional bodies, special class government officers, judges of High Courts and judges above that rank, top politicians, central members of political parties, and senior officials of state-owned officials.
The Bill to Amend Some Nepal Laws registered at the parliamentary secretariat on Monday broadens the definition of domestic PEPs to make it compatible with the federal structure.
Provincial chief, chief minister, ministers, speaker, deputy speaker, members of provincial assemblies, mayors, deputy mayors, chairmen and deputy chairmen of rural municipalities are categorised as PEPs in the amendment draft.
If the federal parliament endorses the proposal, 550 elected representatives in provincial assemblies and 1,506 chiefs and deputy chiefs of local governments will become the subject of higher scrutiny from various agencies in financial dealings. The proposal also specifically names the chief justice as a PEP.
Binod Lamichhane, information officer at the Department of Money Laundering Investigation, said that the proposed amendment is part of the anti-money laundering legislation that considers the 40 recommendations made by the Financial Action Task Force, a global anti-money laundering authority.
“Although we are making necessary changes in our legal provisions according to global standards, there are still some issues that need to be addressed,” he said.
Amid the possibility of PEPs taking undue advantage of their position for money laundering, the PEPs invite greater scrutiny under the anti-money laundering law. Agencies such as banks and financial institutions, insurers, the stock market, tax authority, customs office, and bullion traders are required to scrutinise the PEPs with the ‘Know Your Customer’ instrument.
The law bars a lower ranking official of any agency from having transactions with a PEP without the approval of a high-ranking official of the agency.
These agencies should try to identify the source of property and fund of PEPs and monitor their transactions continuously. This provision also applies to the financial transactions of the family members of a PEP.
As part of continuous monitoring, the business relations, transactions and documents related to PEPs should be continuously updated, the law says.