Nepal, June 23 -- Nepal has failed to exit the Financial Action Task Force (FATF) grey list this year due to inadequate progress in strengthening its legal and institutional framework to combat money laundering and terrorist financing. The country remains under FATF's "increased monitoring" regime in 2026 after falling short in effectively implementing laws and regulatory mechanisms needed to curb illicit financial activities.

Although Nepal was formally placed on the grey list in 2025 and has since undertaken some legal and institutional reforms, FATF concluded that the measures have not produced the expected results. In its latest report released this week from Paris, FATF noted shortcomings in Nepal's anti-money laundering system, ca...