Kathmandu: Nepal’s insurance regulator has instructed insurers to freeze assets linked to organisations and individuals involved in terrorism and to deny them insurance services, as the country seeks to be removed from the Financial Action Task Force (FATF) grey list.
Nepal’s deficiencies in legislating targeted financial sanctions (TFS) against terrorist organisations and individuals have been identified as one of the reasons behind the country’s inclusion in the list maintained by the global anti–money laundering body.
Nepal was placed on the FATF grey list in February, and the listing was extended in October this year.
The FATF said that countries or jurisdictions included in the grey list are those actively working with FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. The FATF does not call for enhanced due diligence measures for these jurisdictions.
The FATF standards do not envisage de-risking or cutting off entire classes of customers in grey-listed jurisdictions but instead call for the application of a risk-based approach.
By issuing the Guidelines on Targeted Financial Sanctions for Insurers, 2025, last week, the Insurance Authority — the regulator of Nepal’s insurance sector — has ordered insurers to freeze the assets of individuals and organisations designated as terrorists by the United Nations Security Council (UNSC) and to deny them insurance services.
Among the organisations designated as terrorist entities by the UNSC are Lashkar-e-Toiba (LeT), Jaish-e-Mohammed (JeM), and Harakat-ul-Jihad Islami (HuJI), all of which have been accused of carrying out terrorist attacks in India.
According to the regulator, asset freezing includes prohibiting the issuance, transfer, conversion, settlement of claims, provision of insurance services, or movement of any funds or assets owned or controlled by a designated person.
Insurers must also ensure a prohibition on offering any insurance policy, funds, or services.
“This means the prohibition to provide funds to, or render financial or other services related to, any designated person,” the Insurance Authority said. (IANS)
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