Nepal border casinos pose high risk of money laundering, analysts say
The Asia/Pacific Group on Money Laundering (APG) has urged enhanced anti-money laundering measures.
Nepal.- The Asia/Pacific Group on Money Laundering (APG) has said that border casinos in Nepal have a significant risk for money laundering. The mutual evaluation report (MER) examined how Nepal is implementing and enforcing the 40 standards of the Financial Action Task Force (FATF) and deemed the current regulatory framework for casinos to be “unclear and ineffective.”
The report said that while Nepal’s economy and financial sector were generally less attractive for laundering foreign proceeds, the presence of border casinos posed a unique challenge. Nepal shares its borders with India and China, and the report suggested that money laundering through casinos and legal entities is likely.
It highlighted a need for the country to demonstrate a high-level commitment, allocate more resources and enhance cooperation. APG recommended that Nepal should significantly improve risk-based AML/CFT supervision of cooperatives, casinos, dealers in precious metals and stones (DPMS) and real estate agents.
The APG’s assessment placed the National Money-Laundering Threat rate for Nepal’s casino sector in 2020 at a “medium-high vulnerability” level. It found that while all casinos engage in foreign exchange transactions, only six operators, representing ten casinos, have obtained the required licence from Nepal Rastra Bank, and just two have submitted the necessary monthly returns for their foreign exchange transactions.
Nepal is home to 28 licensed casinos: 10 in Kathmandu and the rest located near the Indian border. They are prohibited from offering gambling to Nepalese citizens. Their annual turnover is estimated at NPR9bn (US$67.5m). The largest has 101 table games.
