Parliament´s Finance Committee on Sunday decided to direct the government to immediately begin investigations into the wealth parked by Nepalis in Swiss banks.
Following discussions with the governor of Nepal Rastra Bank and officials of the Department of Money Laundering Investigation (DMLI) and the Ministry of Finance on Sunday, the committee concluded that cash amounting to Rs 5 billion is parked in HSBC bank in Switzerland and this should be be investigated.
Following revelations by the International Consortium of Investigative Journalists (ICIJ) on Feb. 9 that some eight Nepalis have parked money in banks in Switzerland, NRB and DMLI have shown interest in investigating the matter.
But officials say that collecting information about the bank accounts of such people and assessing the source of the money is no cakewalk. Nepal has not signed any mutual legal assistance agreement, which is vital for exchanging such information at a bilateral level.
The parliamentary committee has now directed the government to initiate the signing of such an agreement with Switzerland.
Following the endorsement by parliament of the anti-money laundering act last year, a plan extending to 2017 has been devised, with division of work among various government institutions. The task of assessing countries for signing such an agreement and making needful preparations goes to the Ministry of Foreign Affairs.
Talking to Republica, Director General of DMLI, Kebal Prasad Bhandari, said that at present they can only seek information on the basis of mutual understanding. “The money stashed away can be repatriated through a lengthy process if it is found to have been acquired through any illegal process,” said Bhandari, adding that the authorities first need to acquire the account information and carry out investigations before a case can be filed at court.
“Nepal can claim the money in those bank accounts only with a court order,” added Bhandari.
A Nepali can open a bank account in a foreign country only with permission from Nepal Rastra Bank, and on valid grounds. NRB Governor Yuvaraj Khatiwada informed the parliamentary committee that they have checked the list of names given permission to open accounts in foreign countries and the names of the eight are not found in the list.
Governor Khatiwada and DG Bhandari said that the information on money stashed away abroad has drawn their attention. “We only know that countries like Switzerland, Cyprus, the British Virgin Islands, Mauritius and even Singapore and Hong Hong, which have less strict laws, are havens for such money,” added Khatiwada.
The committee, in its decision, also directed the government to counter any trend of stashing money in foreign banks and to make arrangements for utilizing it in developmental work.
In 2012, upon a request by the Nepal Trust for information about Swiss bank accounts of members of the royal family, the Swiss government had responded that there was no account in any Swiss bank in the name of royalty from Nepal.
Billions from Vingin Islands under question
KATHMANDU, Feb 16: Governor of Nepal Rastra Bank Yuvaraj Khatiwada has clearly indicated that Rs 3.5 billion from the British Virgin Islands now deposited in different banks is under question. Speaking at the Finance Committee of parliament, Khatiwada said, “I would not name them, but the money was received in some banks as loan investment from the Virgin Islands and the loan receiver has no registration of a company or industry.”
Expressing surprise at investors sending their money even without any name of the company or the business they are to engage in, Governor Khatiwada said that foreign investment should not simply be taken for granted in the name of foreign investment.
“The country has to manage the foreign currency to return interest on the investment, putting pressure on foreign currency reserves,” added Khatiwada, indicating that the source of investment would be entertained only for long term investment and only in the priority sectors like hydropower and infrastructure, and under due legal process. Foreign loan investment or direct investment can be brought in either with approval from the Department of Industry and the Industrial Promotion Board, an authority headed by the industry minister, or through the Investment Board Nepal (IBN).
Foreign investment from the Virgin Islands has increased significantly, making the islands the fifth highest source of such investment for Nepal last year. The committee has also directed the Ministry of Industry to inform the committee about details of the foreign investors, as well as drawing the attention of IBN to bring in only investment that is in the country´s interest.