Structure of the Act
• Chapters: 7 Chapters
• Sections (Articles): 47 Sections in total
Date of Authentication
• 2064/11/12 B.S.
• (That corresponds to: 24 February 2008 A.D.)
Major Features of the AML Act, 2064
1. Criminalization of Money Laundering and Terrorist Financing
o The Act defines and criminalizes money laundering and financing of terrorism
clearly, making it punishable by law.
2. Establishment of Financial Information Unit (FIU)
o The FIU under Nepal Rastra Bank is empowered to collect, analyze, and share
information on suspicious transactions.
3. Mandatory Reporting of Transactions
o Certain financial transactions and suspicious activities must be reported to FIU,
including large cash transactions and cross-border transfers.
4. Know Your Customer (KYC) and Customer Due Diligence (CDD)
o Institutions are obligated to properly verify the identity of clients to prevent
anonymous transactions.
5. Record Keeping Requirement
o Institutions must keep detailed records of transactions and customer data for at
least 5 years.
6. Provision for International Cooperation
o Allows the government to collaborate internationally for the exchange of
information and enforcement of AML laws.
7. Seizure and Freezing of Assets
o Authorities are empowered to seize or freeze assets suspected to be linked to
money laundering or terrorist financing.
8. Protection for Whistleblowers
o Protects employees and individuals who report suspicious activities in good faith.
9. Confidentiality of Information
o Ensures the confidentiality of reports and data submitted to FIU.
10. Penalties and Fines
• Provides detailed punishment structure for offenders, including fines and imprisonment.
Structure: Chapters in the AML Act, 2064
The Act is structured into 7 Chapters (as per the original version).
Here’s a simple breakdown:
1. Chapter 1: Preliminary
o Short title, commencement, and definitions.
2. Chapter 2: Money Laundering Offense and Punishment
o Defines offenses, penalties, and modes of committing money laundering.
3. Chapter 3: Investigation and Filing of Cases
o Provisions related to investigation authority, procedure, and prosecution.
4. Chapter 4: Property Freezing, Seizure, and Confiscation
o Details about freezing or confiscating property involved in money laundering.
5. Chapter 5: Financial Information Unit
o Establishment, roles, and responsibilities of the FIU.
6. Chapter 6: Miscellaneous
o Includes provisions like confidentiality, international cooperation, protection for
informants, etc.
7. Chapter 7: Punishment Provisions
o Specific penalties for offenders, and actions for non-compliance by reporting
entities.
Objectives of the Anti-Money Laundering Act, 2064
1. To Prevent and Control Money Laundering
o The main goal is to stop illegal money (proceeds of crime) from being integrated
into the legal economy.
2. To Criminalize Money Laundering and Terrorist Financing
o Declare these acts as criminal offences and punish offenders under the law.
3. To Establish an Effective Mechanism for Investigation and Prosecution
o Create proper authorities (like DMLI and FIU) to investigate, prosecute, and
prevent money laundering.
4. To Safeguard the Financial System
o Protect banks and financial institutions from being misused for laundering money
or financing terrorism.
5. To Promote Transparency in Financial Transactions
o Ensure that financial transactions are transparent, traceable, and accountable.
6. To Fulfill International Commitments
o Align Nepal's legal framework with international standards like those of the
Financial Action Task Force (FATF).
o Facilitate international cooperation in the fight against money laundering.
7. To Enable Freezing, Seizure, and Confiscation of Illegal Assets
o Allow authorities to take legal action against assets derived from criminal
activities.
8. To Protect Lawful Businesses
o Create a fair environment where legitimate businesses are not harmed by unfair
competition from laundered money.
