MAOISTS DECIDE TO CONTINUE EFFORT TO COLLECT SUPPORT FOR BABURAM

MAOISTS DECIDE TO CONTINUE EFFORT TO COLLECT SUPPORT FOR DR.BABURAM BHATTARAI
Kathmandu, 20 Aug.: A delayed meeting of Maoist standing committee decided Saturday to continue party effort collect support for Second Vice-chairman Baburam Bhattarai’s candidacy for a consensus prime minister.
Spokesman Dinanath Sharma said the party will be more flexible’ in its continued effort.
UML standing committee also held discussions Saturday without deciding on the party’s choice for successor of Caretaker Prime Minister Jhalanath Khanal.
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NBL RECORDS RS.383.436 MILLION
NET PROFIT

Kathmandu, 20 Aug.: Nepal Bank Ltd. (NBL) recorded a Rs.383.436 million net profit in fiscal year 2-67/68 that ended mid-July.
The Bank recorded a Rs.357.098 million profit the previous year.
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PARAS SHAH NAME DELETED
Kathmandu, 20 Aug.: Name of former Crown Prince Paras Shah has been deleted as co-chairman of Asia Pacific Exchange and Cooperation Foundation (APEC) which had announced a $2 billion assistance for development of Lumbini, Nirmal Shrestha writes in Kantipur from Hong Kong.
There were nine co-chairman along with Chairman Prachanda.
Shah’s name is not on its official website.
The reason for deletion hasn’t been mentioned anywhere.
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CENTRAL BANK ENFORCES PCA ON FINANCE COMPANIES
Kathmandu, 20 Aug.: Nepal Rastra Bank has enforced Prompt Corrective Action (PCA) on Capital Merchant and Finance and People’s Finance, today [Friday]. “It is yet another chance for them to reduce their expenses and collect loans,” said central bank spokesperson Bhaskar Mani Gyanwali, The Himalayan Times reports.

Once the PCA is imposed, the banks and finance companies cannot mobilise deposits, open branches, distribute dividends and increase salaries and incentives of employees and add new employees that could add expenses. On June 24, Capital Merchant Bank and Finance Company had pulled its shutter down citing acute cash shortage.

The central bank has on July 9 decided to enforce Prompt Corrective Action (PCA) on Capital Merchant Banking and Finance to give it a chance to correct itself. Similarly, People’s Finance ran into trouble after its executive chairperson Chhabilal Bhusal went on missing leading the finance company to closure due to liquidity crunch. These financial institutions ran into trouble due to bad corporate governance.
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GROWING CHINESE ARRIVALS NEPAL DOMINATED EARLIER BY EUROPEAN, AMERICANS AFTER INDIANSS
Kathmandu, 20 Aug.: Annual tourist arrivals from China crossed the 46,000 mark in 2010, a five-fold jump from 2001, attesting to the growing popularity of the Himalayan country among Chinese vacationers, Sangam Parsain writes in The Kathmandu Post.

The northern neighbour has emerged as the second largest source market after India for Nepal. The number of Chinese tourists has already reached 33,375 (20,009 by air and 13,366 overland) by the first seven months of 2011.

Travel trade entrepreneurs said that increased flight connectivity between Nepal and China had supported the growth in tourist arrivals. Chinese carriers China Southern, China Eastern and Air China operate on the Guangzhou-Kathmandu, Kunming-Kathmandu and Lhasa-Kathmandu sectors respectively.

“An increase in flight frequency and rising interest in Nepal at both the government and non-government levels have boosted travels from China,” said Aditya Baral, spokesperson of the Nepal Tourism Board (NTB).

Nepal’s Buddhist pilgrimage destinations and greater marketing efforts by Nepali tour operators in China also contributed to the growth in Chinese arrivals. “The significant presence of Chinese visitors has kept Nepal’s tourism sector busy even during the off-season.”

According to the Pacific Asia Travel Association (PATA), Chinese outbound travellers have contributed to double-digit growth in the number of people visiting the Asia-Pacific region, taking the estimated 45 million arrivals in 2010 to as much as 60 million in 2011.

Travel from China to South Asia has grown 21 percent. Since 2005, arrivals from China to India has doubled, Nepal has seen the numbers triple, while arrivals from China to the Maldives and Bhutan have increased five-fold, according to PATA.

Although, the Chinese government had permitted Approved Destination Status (ADS) for Chinese outbound in November 2001, the number of Chinese tourists arriving in Nepal was nominal. Nepal had first participated in the China International Travel Fair in 2000 for the promotion of Nepal’s tourism.

“Nepal and China signed an initial memorandum of understanding (MoU) on an implementation plan for outbound travel by Chinese to Nepal in April 16, 2001 preparing the path for ADS,” said Kashi Raj Bhandari, director, planning and research at the NTB.

In 2002, ADS was granted by the China National Tourism Administration and in June 2002, Chinese citizens went to Nepal officially for the first time as tourists. Before 2000, Chinese were allowed to travel to Nepal only on official visits.

Bhandari said that the central banks of the two countries had signed an agreement on bilateral cooperation that allowed Chinese currency to be convertible in Nepal aiming to boost bilateral trade, tourism and economic cooperation.

Although entrepreneurs said that the quantum leap in arrivals from China was good for Nepal Tourism Year that has projected 100,000 visitors from China alone out of the targeted one million tourists, a massive Chinese influx could also make Nepal dependent on Chinese visitors.

Ashok Pokhrel, president of the Nepal Association of Tour Operators (NATO), said that although the number of Chinese tourists were increasing, it has not contributed significantly to the country’s tourism sector due to their short length of stay and low spending.

Pokhrel said that increased Chinese arrivals had boosted consumer confidence. But Nepal should not be focused or depend on a single market to make the country’s tourism a sustainable sector. “Being dependent on a single market means we are also inviting a potential crisis,” said Pokhrel, adding that increased tourists arrivals was good for the country’s economy, however, greater focus should be laid on attracting visitors from diverse markets.
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APG REPORTS SHORTCOMINGS IN NEPAL ANTI-MONEY LAUNDERING COMPLIANCE

Kathmandu, 20 Aug.: The Asia/Pacific Group on Money Laundering (APG), in its mutual evaluation report of Nepal, has shown a number of deficiencies in complying with anti-money laundering and combating financing of terrorists (AML/CFT), especially in legal, infrastructure and implementation, The Katmandu Post reports.

The report mentioned that Nepal risks significant vulnerabilities including terrorist activity and terrorist financing due to a porous Nepal-India border. “The country has not yet implemented effective controls for cross-border movement of cash and bearer negotiable instruments,” states the report.

The report states that the current political situation in Nepal together with the open border with India presents significant challenges for Nepal in managing border crime and terrorist activities.

Given the advanced technology being used for money laundering and terrorist financing, the report says that there is no obligation on financial institutions to have polices in place to prevent misuse of technology for the act of money laundering and terrorist financing.

Regarding non-profit organizations (NPO), it says there has been no effective outreach to non-profit organizations from the government in relation to the risk and vulnerabilities of the sector to terrorist financing abuse. “The NPO sector is subject to limited or no monitoring and supervision,” the report said.

Another problem the report outlined is lack of sufficient administrative basis for the Financial Information Unit (FIU) for its operation.

The report, which is based on the APG’s field visit in September 2010, has, however, failed to incorporate the progress made by Nepal in complying with AML/CFT. Hence, some of its findings are outdated.

The report says that Nepal has not criminalized terrorist financing and money laundering offences and the Anti-Money Laundering Act does not encompass terrorist financing. However, it was based on the old anti-money laundering act. Now, the amended act has sought to criminalize terrorist financing. As per the amended act, those financing terrorism will face imprisonment of one to five years and be fined as per the amount of funds involved in the offence. “If the amount of the offence remains undisclosed, they are fined up to Rs 500,000,” the act has stated.

Nepal has addressed another deficiency outlined in the report that says that Nepal lacks a mechanism for freezing the assets of terrorists under the UN Security Council Resolution 1267 that covers financing to terrorist organizations such as Al-Qaeda and Taliban. However, the amended act says the assets and equipment used in the offences as per this act will be seized. The act has also provisioned that Nepal would request international organizations through diplomatic channels in freezing the assets of offenders under this act if necessary.

“As the report like that published by the APG covers the progress made in just two months after the field visit, compliance with the amendment to the act has not been included,” said Dharma Raj Sapkota, chief of the FIU under Nepal Rastra Bank (NRB).

With most of the deficiencies outlined in the report being based on the legal framework, Sapkota said that endorsement of the amendment to the Anti-Money Laundering Act by the parliament had addressed 75 percent of the deficiencies indicated by the APG.

According to the report, Nepal has complied fully with only one (income disclosure in banking) recommendation out of the 40 made by the Financial Action Task Force (FATF). “This means Nepal is in the list of countries that should be monitored closely,” said Sapkota. Hence, Nepal has to submit progress reports on the deficiencies shown in the report to the APG next January and May 2012, according to him.

The FATF, an anti-money laundering body formed by G-20, has removed Nepal from its list of risky countries with regard to AML/CFT.
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