Summary:

• The Nepal government reversed a recent decision that required buyers and sellers of land and houses to submit bank statements and fill out Know Your Customer (KYC) forms during transactions.
• These stricter rules were introduced by the Department of Land Management Archives on May 28 to curb black money in land deals and help Nepal address concerns from the Financial Action Task Force (FATF), which had placed Nepal on its grey list partly due to unchecked money flows in real estate.
• However, the directive was amended on June 6 after instructions from the Prime Minister’s Office (PMO), removing requirements for bank statements and KYC forms.
• Several articles related to money laundering prevention in the original directive were scrapped or changed.
• Officials suggest that political advisors and real estate brokers may have influenced the PMO to revoke the tough rules, although PMO denied interference.
• Experts like former finance secretary Rameshore Khanal noted that while the original directive was commendable for national interest and addressing financial fraud, the government backed down due to pressure.
• Real estate developers argued the rules were impractical, as many buyers cannot use collateral or deposit money through banks easily.
• The relaxation also removed earlier requirements for payment of registration fees and taxes via bank transfers for transactions over Rs 1 million.
• The article highlights ongoing challenges in balancing anti-money laundering efforts with practical realities in land transactions in Nepal.

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