Govt issues strict directive to block sanctioned individuals from Nepal’s real-estate market

KATHMANDU: With rising concerns over illicit financial flows, terrorist financing, and attempts by sanctioned individuals to expand their economic influence through property transactions, the Department of Land Management and Archives has issued a detailed directive to enforce financial sanctions across Nepal’s real-estate sector.

The directive, made public on Tuesday, introduces stringent compliance requirements for real-estate entrepreneurs, land brokers, legal advisors, registrars, and all individuals or institutions involved in land and housing transactions. It explicitly prohibits any form of property dealings — including buying, selling, exchanging, gifting, leasing, or mortgaging — with individuals listed in national or international sanctions lists. Violators will face fines ranging from Rs 100,000 to Rs 10 million.

According to the department, the move was necessitated by increasing risks posed by individuals listed under the UN Security Council sanctions list and Nepal’s domestic terrorist list. Authorities warn that such individuals may use real-estate channels to transfer funds, hide investments, or accumulate economic gains.

Under the new rules, no transaction can proceed without mandatory screening of all involved parties against the sanctions list. This includes the buyer, seller, agents, brokers, service providers at land revenue offices, legal consultants, and anyone directly or indirectly linked to the transaction.

Mandatory Daily Screening

The directive requires that names, addresses, citizenship details, beneficial ownership information, and identification documents of all participants be cross-checked daily against the sanctions list. The verification must be completed before entry, registration, agreement, or processing of any land or property transaction begins.

Immediate Freeze if Match Confirmed

If a “confirmed match” with a sanctioned individual is found, all related property dealings must be halted immediately. In such cases, the individual’s movable and immovable assets — including bank accounts, deposits, rental income, and business shares — will be frozen without prior notice.

In cases of a “possible match,” where names appear similar but are not confirmed on the sanctions list, the directive instructs authorities to verify the identity through the Ministry of Home Affairs.

Partial or Full Freeze Depending on Ownership Share

If a sanctioned person owns a percentage of a jointly held property, the corresponding portion will be frozen. If ownership shares cannot be distinguished, the entire property will be frozen as a precautionary measure. This freeze must be enforced immediately.

All asset‐freeze actions must be reported within three days to relevant regulatory agencies and the Ministry of Home Affairs.

Strict Penalties for Non-Compliance

Violations of the directive will attract fines between Rs 100,000 and Rs 10 million, while repeated violations may lead to stronger administrative action. In severe cases, authorities may even revoke operating licenses of businesses or service providers involved in the breach.

Humanitarian Access Allowed in Limited Cases

The guideline also provides limited humanitarian exemptions. Sanctioned individuals may apply to the Ministry of Home Affairs for essential expenses — food, health, education, or legal services. However, for those listed by the UN Security Council, such exemptions require approval from the relevant UN committee.

Government Says Step Will Strengthen Market Integrity

The department claims the directive is a crucial step toward making Nepal’s real-estate sector more transparent, accountable, and safeguarded from criminal misuse. Officials expect it to curb money laundering, terrorist financing, and attempts to “whiten” illicit funds through property dealings, thereby protecting the country’s financial system and land market from high-risk actors.