KATHMANDU: The Financial Intelligence Unit (FIU Nepal) under Nepal Rastra Bank has placed hire purchase companies and vehicle dealers in the red flags of suspicious transactions and activities.
FIU Nepal has updated the guidelines issued for Suspicious Transactions and Activities (STR and SAR) reports in accordance with the Money Laundering Control Act, 2064, and has placed red flags on hire purchase companies and vehicle dealers.
According to the guidelines, red flags related to suspicious transactions have been classified into three categories: general, sectoral, and criminal.
General red flags include issues such as artificial intelligence (AI), use of new technology, and participation of politically exposed persons.
These include activities such as customers not wanting to reveal their identity, not providing personal documents, repeatedly transacting large amounts of money, depositing or transferring large amounts of money without disclosing the source of income, using new technology to make unusual transactions, and involvement of politically influential people.
Similarly, sector-specific red flags mention potential risks that may be seen in hire purchase companies and vehicle sales companies. These include activities such as customers making large cash payments in advance in hire purchase companies, not disclosing the source of income for the amount, repeatedly buying vehicles but not using them, and receiving payments from third parties.
Similarly, criminal activity-based red flags indicate signs that money derived from smuggling, tax evasion, corruption, fraud, or other criminal activities has been used in the transaction.
The updated guidance is believed to make a significant contribution to improving the quality of suspicious transaction and activity reports, strengthening financial discipline, and controlling illicit economic activities.
The new guidelines aim to provide more clarity and efficiency to reporting institutions in identifying, assessing and reporting suspicious transactions and activities. This is aimed at further strengthening the anti-money laundering and counter-terrorism financing (AML/CFT) control system.
