Kathmandu— Nepal Police is investigating a growing number of money laundering cases, with 25 active investigations involving 64 suspects, in response to increased scrutiny from the Financial Action Task Force (FATF). The intensified efforts began in fiscal year 2025/26 and continue into the current year, following an expansion of police jurisdiction over these offenses on March 25, 2024. Police are focusing on crimes with high money laundering risks, including human trafficking, drug trafficking, and cryptocurrency-related activities, aiming to address deficiencies identified by the FATF and avoid prolonged placement on its ‘grey list.’

Expanded Investigative Powers

Nepal Police were granted authority to investigate money laundering offenses earlier this year, shifting responsibility from the Department of Money Laundering Investigation. Deputy Inspector General (DIG) Abi Narayan Kafle explained that police initiate separate investigations when assets with no legitimate source are discovered during inquiries into other crimes. This allows for a broader approach to uncovering illicit financial activity across all districts in Nepal.

Recent Cases and Seizures

Police have filed 28 money laundering cases to date, naming 78 defendants, with two convictions secured and 26 cases still pending in district courts. Recent investigations include the arrest of businessman Abhishek Giri, who was investigated for fraud and criminal breach of trust before being released on bail. Law enforcement has seized approximately Rs. 53.53 million in cash, along with foreign currencies, vehicles, and mobile phones. Assets worth around Rs. 1.50 billion have been frozen, including land, shares, bank accounts, and digital wallets.

Focus on High-Risk Crimes

Authorities are prioritizing investigations into offenses deemed highly susceptible to money laundering, such as human trafficking, narcotics trafficking, hundi transactions, tax evasion, corruption, cybercrime, and cryptocurrency activities. DIG Kafle stated that the goal is to strengthen prosecution efforts and bring illegally acquired assets under state control. Sunil Rai was recently convicted of illegal betting, virtual currency-related offenses, forgery, and money laundering, receiving a three-year prison sentence and a substantial fine.

FATF Monitoring and Previous Listings

The FATF placed Nepal on its grey list for money laundering and terrorist financing risks in February 2025, requiring enhanced monitoring. The country must demonstrate by January 2027 that it has implemented necessary legal reforms and effectively enforced anti-money laundering laws. Nepal was previously subject to FATF enhanced monitoring from August 2023 and had been on the grey list from 2008 to 2014, before being removed following earlier reforms. A 2019 National Risk Assessment identified corruption, tax evasion, and human trafficking as major sources of money laundering in Nepal.

The Supreme Court recently acquitted Milan Gurung, known as Chakre Milan, in a money laundering case, upholding an earlier acquittal by the Special Court. Police continue to prioritize these investigations as they work towards meeting FATF requirements.

(With inputs from RN)

Originally published on abcnews.com.np.