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Nepal’s Casinos Face New Standards in Transaction Reporting
In a decisive move, Nepal has implemented a new regulatory framework requiring casinos to document and report any patron transactions exceeding NPR1 million (approximately $7,400) within a 24-hour window. This measure aims to strengthen the country’s approach to combatting money laundering, serving as a proactive initiative for improved financial oversight.
The directive originates from the Department of Money Laundering Investigation, underscoring the government’s commitment to ensuring transparency in financial dealings. The urgency for these changes was amplified earlier this year, when the Financial Action Task Force (FATF) designated Nepal as a “grey list” country, indicating heightened risks associated with financial crimes.
The FATF highlighted concerns surrounding inadequate controls over financial transactions, which have implications for corruption and tax evasion. To address these challenges, Nepal has begun enforcing a series of reforms targeting various sectors, including the gaming industry. Notably, casinos will now be required to maintain around-the-clock surveillance and retain video footage for six months, ensuring accountability in their operations.
Additionally, visitor records must be archived for a minimum of five years, implementing robust know-your-customer (KYC) guidelines and biometric verification systems at entry points. The minimum capital requirement for casino operators has also seen an increase, climbing from NPR150 million to NPR200 million ($1.48 million), reflecting a commitment to enhancing the financial backbone of the industry.
The Implications of Grey Listing
Nepal’s history with the FATF reflects a broader narrative of international scrutiny. Previously, the nation found itself on the FATF list from 2008 to 2014, and the negative implications of such designations are profound. Being associated with countries grappling with severe economic challenges can deter foreign investments and tarnish Nepal’s international standing.
In contrast to the grey list, the FATF black list consists of only a few jurisdictions including North Korea and Iran, indicating a further layer of financial isolation for those countries. The recent suspension of Russia from the list highlights the evolving nature of these classifications based on geopolitical tensions.
In response to its grey listing, Nepal has devised a comprehensive seven-point strategy aimed at strengthening its defense against money laundering and associated financial crimes. The plan includes enhancing risk-based supervision across various sectors, boosting the penetration of illicit financial activities, and fostering agency collaboration to better facilitate investigations.
These measures represent a critical step for Nepal, marking its pursuit of financial integrity and a safer economic environment. As it endeavors to meet international standards, the initiatives within the casino sector serve as a benchmark for broader institutional reforms.
This version rephrases the information while offering a broader context and additional insights into the implications of these regulations.