Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: In a sweeping regulatory move aimed at strengthening Nepal’s anti–money laundering regime, the government has mandated that all transactions involving precious metals or high-value items worth over Rs 1 million must be conducted strictly through banking channels. The policy shift comes as Nepal struggles to exit the FATF grey list, prompting authorities to tighten scrutiny on sectors traditionally vulnerable to illicit financial flows.
The Inland Revenue Department (IRD) has issued a new directive increasing oversight on the trade of high-value metals and gemstones, citing risks related to money laundering, terrorist financing, and proliferation financing. The circular, titled “Directive 2082 on Anti–Money Laundering Compliance for Precious Metal and High-Value Goods Dealers,” lists a wide range of items now subject to stricter regulation — including gold, silver, platinum group metals, diamonds, rubies, emeralds, sapphires, jade, pearls, and any items containing more than two percent of such materials.
Under the revised rules, all precious metal businesses — categorized as “reporting entities” — must conduct payment and receipt transactions only through bank accounts registered under the business name. The use of personal accounts, accounts of employees, family members, or third parties is strictly prohibited.
The directive further states:
Any single sale above Rs 1 million must be paid through the buyer’s or their family member’s bank account.
Electronic payment methods must be prioritized for both purchases and sales.
If transaction limits exist on electronic payments, the IRD will coordinate with Nepal Rastra Bank to extend necessary thresholds.
To enforce compliance, the IRD has introduced a tiered penalty system:
First violation: written warning
Second violation: Rs 1 million fine
Third and subsequent violations: fines ranging from Rs 1 million to Rs 5 million, with potential cancellation of business registration for continued non-compliance.
Additionally, failure to maintain or safely store required transaction records may trigger fines between Rs 1 million and Rs 50 million, depending on the severity and frequency of violations.
The government has emphasized that these reforms are central to maintaining transparency in the high-value goods sector — one of the key areas flagged by FATF — and are expected to play a decisive role in Nepal’s effort to restore global financial credibility and attract formal foreign investment.
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