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Asset (Money) Laundering Prevention Rules, 2066 (2009)

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Chapter-1 Preliminary

1. Short Title and Commencement:

(1) These Rules shall be called as “Asset (Money) Laundering Prevention Rules, 2066 (2009).”
(2) These Rules shall come into force immediately.

2. Definition: Unless the subject or context otherwise requires, in this Rules,-
(a) “Act” means Asset (Money) Laundering Prevention Act, 2008.
(b) “Customer” means individual, firm, company, organization or entity having business relation with the bank, financial institution or non-financial institution.
(c) “Technical Committee” means the committee formed pursuant to Rule 5.
(d) “Directives” means the Directives issued by the Financial Information Unit pursuant to Rule 7.
(e) “Regulatory Body” means the entity or officer authorized by the existing  law to regulate any business.
(f) “Coordination Committee” means the coordination committee formed pursuant to Section 8 of the Act.
(g) “Reporting Institution” means bank, financial institution, non-financial institution and government entity having obligation to report information and particulars to the Financial Information Unit as per the provisions of the Act, Rules and the Directives .

Chapter-2 Threshold Transaction and Functions of the Coordination Committee and the Technical Committee

3. Threshold Transaction:

(1) Nepal Rastra Bank may, while prescribing the threshold of transaction for the purpose of Section 6 (1) of the Act, prescribe different threshold for different transaction by taking into account the area, subject matter and the nature of the transaction involved.
(2) Nepal Rastra Bank may, while prescribing the threshold pursuant to Sub Rule (1), consult the regulatory body.
(3) Nepal Rastra Bank shall, while prescribing or amending the threshold pursuant to Sub Rule (1), publish a public notice thereof.
4. Functions of the Coordination Committee:

(1) The Coordination Committee may, for the purpose of Section 8 of the Act, furnish recommendations to the
Government of Nepal on the following matters.
(a) Prevention of the offence;
(b) To cause monitoring of the activities made for the prevention  of the offence;
(c) Obtaining the membership of the international organizations working for the prevention of the offence;
(d) The policy, strategy, plans to be adopted and made by theGovernment of Nepal and the implementation of the
decisions made;
(e) Implementation of the annual report of the Financial Information Unit on the prevention of the offence;
(f) Other matters as deemed necessary by the committee.
(2) The coordination committee may, while furnishing recommendations pursuant to Sub-rule (1), furnish the recommendations to the concerned Ministry as per necessity based on the subject matter or straight to the office of the Prime Minister and the Council of Ministers.

5. Formation of the Technical Committee: 

(1) For the purpose of assisting the Financial Information Unit to execute the objective of the Act, there shall be a Technical Committee constituted as follows:

(a) Chief, the Financial Information Unit– Coordinator
– Member
(b) Representative, the Department
(c) Representatives, Nepal Rastra Bank
(one from each of the Foreign
ExchangeDepartmentandthe– Members
– Member
Regulation Department)
(d) Representative, Nepal Police
(e) Representative, Nepal Securities Board – Member
(f) Representative, Insurance Board– Member
(g) Deputy Director, Financial Information
Unit– Member Secretary
(2) The Technical Committee shall assist the Financial Information Unit in
the following functions:
(a)Formulation of measures or strategy necessary for the control
of the offence;
(b)Implementation of the measures or strategy formulated

pursuant to (a);
(c) Promotion of awareness for the control of the offence;
(d) Performing other functions prescribed by the Coordination Committee.
(3) The coordinator may call the meeting of the Technical Committee as per necessity and the meeting procedure shall be as fixed by the committee itself.
(4) Officials of the concerned authority or any other expert may, as per necessity, be invited to the meeting of the Technical Committee.

Chapter-3 Functions, Duties and Power of the Financial Information Unit

Chapter-4 Obligation of the Regulatory Body, Reporting Institutions and Natural  person

8. Power to Designate Regulatory Body:

The Government of Nepal may, if there is no regulatory body to regulate any institutions obliged by the Act and these Rules to report to the Financial Information Unit, designate any regulatory body in 6 consultation with the Coordination Committee to regulate such institution or person.

9. Obligation of Regulatory Body:

The regulatory body shall have the following  obligation in relation to the prevention of the offence:
(a) Execute or cause to execute the Act, these Rules and the Directives,
(b) Issue necessary directives to the institutions it regulates,
(c) Inspect and supervise whether or not the concerned institutions or person has complied with (a) and (b),
(d) Provide the Financial Information Unit with the report of the inspection and supervision conducted pursuant to (c).

10. Obligation of the Reporting Institution:

In addition to the obligation mentioned
in the Act, the reporting institution shall have the following obligation:
(a) Maintain record of the transaction as prescribed by the Financial Information Unit,
(b) Update customer profile of the existing customer as prescribed by the Financial Information Unit and submit the record thereof to the FIU within 5 years from the date these Rules come into force,
(c) Maintain a separate confidential record of the suspicious transaction duly signed by the concerned officer and the chief of the office,
(d) Designate a high ranking managerial level official as a compliance officer and provide the Financial Information Unit with the name, address and contact number (telephone) of the compliance officer,
Provided that, in case of the government office, the chief of the office or any officer designated by him/her may perform the task of the compliance officer.

11. Obligation of the Compliance Officer:

The obligation of the Compliance Officer designated pursuant to Rule 10 (d) shall be as follows:
(a) Function as focal point to perform tasks in accordance with the Act, these Rules and the Directives.
(b) Cause to maintain secure record of transaction,
(c) Provide information about suspicious or other necessary transaction to the  Financial Information Unit through letter or electronic means of communication like fax, email,
(d) Provide information about transaction of the branch offices to the Financial Information Unit in a regular basis.

12. Obligation of Natural Person:

It shall be the obligation of the concerned natural  person to provide information and particular to the Financial Information Unit if such natural person is so required by the Act and the Directives issued in exercise of the power granted by  these Rule.

13. Complaint may be lodged through electronic means of communication:

A person lodging complaint with the Department pursuant to Section 13 of the Act may lodge the complaint through electronic means of communication such as fax and email.
14. Anonymous Complaint may be lodged:

If anyone lodging complaint pursuant to the Act and these Rules wishes to remain anonymous, he/she can request such anonymity and the details like his/her name and address shall not be disclosed.
15. Format of Complaint Register: The Department shall register the complaints it receives in a register as prescribed in schedule-1.

16. Copy of the Evidence may be given:

If the person lodging complaint before the Department as per the Act and these Rules submits any evidence along with the complaint, the Department may give the complainant the attested copy of the evidence submitted.

17. Appointment of the Investigation Officer:

(1) The Department, while appointing or designating Investigation Officer, shall appoint or designate in a form as prescribed in Schedule-2

.
(2) While appointing or designating the Investigation Officer pursuant to8 Sub-rule (1), the time period within which the inquiry and investigation are to be completed and the name of the supporting staffs shall be mentioned.

(3) The investigation officer shall, if the investigation is not completed within the time period stipulated pursuant to Sub-rule (2), request the Department  with reason for additional period of time.

(4) If an additional period of time is requested as per Sub-rule (3), the Department may, based on the nature of the inquiry and investigation, extend the time not exceeding 35 days at a time for a maximum period of 120 days.


18. Format of Subpoena (Notice):

The Department shall, while issuing notice to someone to appear for inquiry or statement or clarification in the course of inquiry or investigation, subpoena the concerned person in a form as specified in Shedule- 19. Format of Arrest Warrant: The Department or the investigation officer shall, while arresting someone in course of inquiry or investigation, give the concerned  person an Arrest Warrant as specified in Schedule-4.

20. Format of Detention Order:

The Department or the investigation officer shall, if someone needs to be detained in the course of inquiry or investigation, give the concerned person a Detention Order as specified in Schedule-5.

21. Search and Seizure:

(1) The investigation officer shall, while entering into someone’s house or compound for the purpose of search in the course of an inquiry or investigation, give notice of the search and prepare a seizure report of the goods seized, if any.

(2) For the purpose of Sub Rule (1) the format of search notice shall be as prescribed in Schedule-6 and seizure report in Schedule-7.

(3) The investigation officer shall, if he/she needs to take with him/her the cash, kind or any other goods seized during search conducted as per Sub-rule (1), prepare the receipt (acknowledgement) of his/her taking away of such goods and shall hand the paper over to the official of the bank, financial institution and nonfinancial institution if the search is conducted in such institution. If the search is9 conducted elsewhere, the receipt (acknowledgement) shall be given to the landowner or the owner of the goods or the person taking charge of the goods. If such concerned person is not available or if such person does not accept to receive such receipt (acknowledgement), the investigation officer shall hand it over to the representative of the local body.
(4) If the representative of the local body as mentioned in Sub Rule (3) is not available, the receipt shall be posted in the spot where the seizure report is created and it shall be mentioned in the seizure report.
(5) Posting of the receipt (acknowledgement) as prescribed in Sub-rule (4) shall be deemed as concerned person receiving the acknowledgement.

22. Format of Date:

The Department shall, while keeping the suspect a Date Note (Taarekh Parcha) create an attendance record as specified in Schedule-8 and issue in a form as specified in Schedule-9.

23. Format of Bail and Guarantee:

(1) The Department or the investigation officer shall use the form as specified in Schedule-10 for the purpose of bail or guarantee from the suspects.

(2) The suspect shall sign a document as specified in Schedule-11 if he/she posts the property of his/her ownership as bail or guarantee and other  person shall sign a document as specified in Schedule-12 if he/she posts the
property of his/her ownership as bail or guarantee for the suspect.

24. Supplementary Statement (Tatimba) Permitted:

The investigation officer may, if he/she thinks it necessary in the course of inquiry or investigation to take information about the offence or the accused, take supplementary information or statement from the person having such information.

25. Format of Order to freeze or control property, account or transaction:

(1) While taking into control or freezing the property, account or transaction relating to the offence, the Department shall take into control or freeze the same by issuing an order in a format as specified in Schedule-13.

(2) While freezing the property, account or transaction pursuant to Sub-rule

(1), the claim, lien or right over such property, account or transaction may also be frozen.


26. Format of Inquiry or Investigation Report: The investigation officer shall, upon completion of inquiry or investigation, submit the report thereof in a format as specified in Schedule-14.


27. Format of Charge-Sheet:
 

The Department shall, while filing a case, prepare and file a charge-sheet in a format as specified in Schedule-15.


28. Termination or postponement of the complaint: 

The Department may terminate the following complaints:
(a) The complaint that is not related to the offence,
(b) The complaint that does not require proceeding based on the available evidence,
(c) The complaint covering the same content and context which was once  terminated without supplying any new evidence.


29. Information may be received through the Financial Information Unit:

The Department may, if any information or particular needs to be sought from any institution of a foreign country in course of inquiry or investigation, seek such information or particular through the Financial Information Unit.


30. Record of the Freezing and Freed to be kept:

(1) The Department shall, if it receives bail or guarantee from the suspect or on his/her behalf pursuant to Rule 23 or has taken into control or frozen any property, account or transaction pursuant to Rule 25, maintain a record thereof.
(2) The details including registration number of the complaint, name, family name, address, property, account, transaction and asset of the suspect, date of order issued to control or freeze the property, name of the office that takes into control or freezes the property, date and reference number of the letter written requiring the property to be taken into control or frozen shall be mentioned in the record maintained as per Sub-rule (1).
(3) The Department shall, if the property taken into control or frozen pursuant to Sub-rule (1) gets freed, update the record thereof accordingly.


31. Freezing to be undone and assets to be returned:

(1) The Department shall, if it has frozen in course of investigation any person’s property, account, passport or asset guarantee received on his/her behalf, undo the freezing within Thirty days from the date of the decision, if any, is made not to sue such person.
(2) In case the accused gets acquitted from the charges filed under the Act and a decision is made not to make an appeal against the acquittal, the court shall undo the freezing of the account, passport, property, transaction of the suspect within Thirty days from the date the statutory limitation for appeal expires.

32. Investigation Officer may be changed:

If any investigation officer fails to perform the designated tasks for whatsoever reason or there exists reasonable ground to infer that it is not appropriate to have the investigation officer perform  the designated tasks, the Department may appoint or designate another investigation officer in his/her place with explanation of the change.

33. Expert’s Service may be received:

The Department may receive the service of an expert of any discipline if such service is required in the course of inquiry or investigation.
34. Expenses may be approved: The chief of the Department may approve the justifiable expenses, devoid of receipt, made by the investigation officer in course of the inquiry or investigation.

Chapter-5 Complaint, Inquiry and Investigation

13. Complaint may be lodged through electronic means of communication:

A person lodging complaint with the Department pursuant to Section 13 of the Act may lodge the complaint through electronic means of communication such as fax and email.

14. Anonymous Complaint may be lodged:

If anyone lodging complaint pursuant to  the Act and these Rules wishes to remain anonymous, he/she can request such anonymity and the details like his/her name and address shall not be disclosed.

15. Format of Complaint Register:

The Department shall register the complaints it receives in a register as prescribed in schedule-1.


16. Copy of the Evidence may be given:

If the person lodging complaint before the Department as per the Act and these Rules submits any evidence along with the complaint, the Department may give the complainant the attested copy of the evidence submitted.


17. Appointment of the Investigation Officer:

(1) The Department, while appointing or designating Investigation Officer, shall appoint or designate in a form as prescribed in Schedule-2.


(2) While appointing or designating the Investigation Officer pursuant to Sub-rule (1), the time period within which the inquiry and investigation are to be completed and the name of the supporting staffs shall be mentioned.

(3) The investigation officer shall, if the investigation is not completed within the time period stipulated pursuant to Sub-rule (2), request the Department with reason for additional period of time.

(4) If an additional period of time is requested as per Sub-rule (3), the Department may, based on the nature of the inquiry and investigation, extend the time not exceeding 35 days at a time for a maximum period of 120 days.


18. Format of Subpoena (Notice):

The Department shall, while issuing notice to someone to appear for inquiry or statement or clarification in the course of inquiry or investigation, subpoena the concerned person in a form as specified in Shedule- 3.


19. Format of Arrest Warrant:

The Department or the investigation officer shall, while arresting someone in course of inquiry or investigation, give the concerned person an Arrest Warrant as specified in Schedule-4.


20. Format of Detention Order:

The Department or the investigation officer shall, if someone needs to be detained in the course of inquiry or investigation, give the concerned person a Detention Order as specified in Schedule-5.

21. Search and Seizure:

(1) The investigation officer shall, while entering into someone’s house or compound for the purpose of search in the course of an inquiry or investigation, give notice of the search and prepare a seizure report of the goods seized, if any.

(2) For the purpose of Sub Rule (1) the format of search notice shall be as prescribed in Schedule-6 and seizure report in Schedule-7.

(3) The investigation officer shall, if he/she needs to take with him/her the cash, kind or any other goods seized during search conducted as per Sub-rule (1), prepare the receipt (acknowledgement) of his/her taking away of such goods and shall hand the paper over to the official of the bank, financial institution and non financial institution if the search is conducted in such institution. If the search is conducted elsewhere, the receipt (acknowledgement) shall be given to the land owner or the owner of the goods or the person taking charge of the goods. If such concerned person is not available or if such person does not accept to receive such receipt (acknowledgement), the investigation officer shall hand it over to the representative of the local body.

(4) If the representative of the local body as mentioned in Sub Rule (3) is not available, the receipt shall be posted in the spot where the seizure report is created and it shall be mentioned in the seizure report.

(5) Posting of the receipt (acknowledgement) as prescribed in Sub-rule (4) shall be deemed as concerned person receiving the acknowledgement.

22. Format of Date:

The Department shall, while keeping the suspect a Date Note (Taarekh Parcha) create an attendance record as specified in Schedule-8 and issue in a form as specified in Schedule-9.

23. Format of Bail and Guarantee:

(1) The Department or the investigation officer shall use the form as specified in Schedule-10 for the purpose of bail or guarantee from the suspects.

(2) The suspect shall sign a document as specified in Schedule-11 if he/she posts the property of his/her ownership as bail or guarantee and other person shall sign a document as specified in Schedule-12 if he/she posts the
property of his/her ownership as bail or guarantee for the suspect.

24. Supplementary Statement (Tatimba) Permitted:

The investigation officer may, if he/she thinks it necessary in the course of inquiry or investigation to take information about the offence or the accused, take supplementary information or statement from the person having such information.

25. Format of Order to freeze or control property, account or transaction:

 (1) While taking into control or freezing the property, account or transaction relating to the offence, the Department shall take into control or freeze the same by issuing an order in a format as specified in Schedule-13.

(2) While freezing the property, account or transaction pursuant to Sub-rule
(1), the claim, lien or right over such property, account or transaction may also be frozen.

26. Format of Inquiry or Investigation Report: The investigation officer shall, upon completion of inquiry or investigation, submit the report thereof in a format as specified in Schedule-14.

27. Format of Charge-Sheet: 

The Department shall, while filing a case, prepare and file a charge-sheet in a format as specified in Schedule-15.

28. Termination or postponement of the complaint: 

The Department may terminate the following complaints:
(a) The complaint that is not related to the offence,
(b) The complaint that does not require proceeding based on the available evidence,
(c) The complaint covering the same content and context which was once terminated without supplying any new evidence.

29. Information may be received through the Financial Information Unit:

The Department may, if any information or particular needs to be sought from any institution of a foreign country in course of inquiry or investigation, seek such information or particular through the Financial Information Unit.

30. Record of the Freezing and Freed to be kept:

(1) The Department shall, if it receives bail or guarantee from the suspect or on his/her behalf pursuant to Rule 23 or has taken into control or frozen any property, account or transaction pursuant to Rule 25, maintain a record thereof.

(2) The details including registration number of the complaint, name, family name, address, property, account, transaction and asset of the suspect, date of order issued to control or freeze the property, name of the office that takes into control or freezes the property, date and reference number of the letter written requiring the property to be taken into control or frozen shall be mentioned in the record maintained as per Sub-rule (1). 

(3) The Department shall, if the property taken into control or frozen
pursuant to Sub-rule (1) gets freed, update the record thereof accordingly. 

31. Freezing to be undone and assets to be returned:

(1) The Department shall, if it has frozen in course of investigation any person’s property, account, passport or
asset guarantee received on his/her behalf, undo the freezing within Thirty days from the date of the decision, if any, is made not to sue such person.

(2) In case the accused gets acquitted from the charges filed under the Act and a decision is made not to make an appeal against the acquittal, the court shall undo the freezing of the account, passport, property, transaction of the suspect within Thirty days from the date the statutory limitation for appeal expires.

32. Investigation Officer may be changed:

If any investigation officer fails to  perform the designated tasks for whatsoever reason or there exists reasonable ground to infer that it is not appropriate to have the investigation officer perform the designated tasks, the Department may appoint or designate another investigation officer in his/her place with explanation of the change.

33. Expert’s Service may be received:

The Department may receive the service of an expert of any discipline if such service is required in the course of inquiry or investigation.

34. Expenses may be approved:

The chief of the Department may approve the justifiable expenses, devoid of receipt, made by the investigation officer in course of the inquiry or investigation.

Chapter-6 Miscellaneous

35. Oath to be taken: 

The person working as an investigation officer, supporting officer or expert pursuant to the Act and these Rules shall, prior to taking on  duties, take an oath before the chief of the Department as prescribed in Schedule- 16.


36. Writing to maintain record:

 If the Department files charge or takes any action against any bank, financial institution or non-financial institution or any person, institution, the Department shall inform the concerned institution or regulatory body of such action.

.37. Procedure to impose fine: 

(1) Where the Financial Information Unit has to impose fine to any bank, financial institution or non-financial institution as per Section 31 of the Act, the concerned bank or institution shall be informed of the activities resulting to fine, grounds and reason for fine and the proposed amount of  fine. Such bank or institution shall be given Seven days time to defend itself. 

(2) Where the Department has to impose fine to a any person as per Section 12 (2) and 18 (3) of the Act, the concerned person shall be informed of the activities resulting to fine, grounds and reason for fine and the proposed amount of fine. Such a person shall be given Seven days time to defend himself.

(3) The Financial Information Unit or the Department may fine the institution or person if the institution or person fails to submit defense in  accordance with Sub-rule (1) or (2) or the submitted defense is not satisfactory or reasonable.

38. Protection of action taken in good faith:

No charge or legal proceeding shall be initiated against the officials of the Financial Information Unit and the Department for any acts they perform in accordance with the Act and these Rules in good faith.


39. Confidentiality:

(1) The information, particulars and documents received by the Financial Information Unit in accordance with the Act, these Rules or Directive shall remain confidential under Section 3 of Right to Information Act, 2008.
(2) The information, particular and documents as mentioned in Sub-rule (1) shall not be provided to other entity except to the Department, investigation officer or the court.
(3) No information and copy of the documents received by the Department in accordance with the Act and these Rules shall be given to any entity or person except to the concerned investigation officer or the court.

40. Manual: 

(1) The Financial Information Unit may develop and implement necessary Manual to perform the tasks it is required to perform as per the provisions of the Act and these Rules.

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