Cooperatives have shown lukewarm response to the goAML system, a platform designed to combat money laundering, despite strong engagement from banks, financial institutions, remittance companies, money changers, insurance firms, and stock brokers licensed by Nepal Rastra Bank.
According to the Financial Information Unit (FIU) of Nepal Rastra Bank, a total of 1,842 organisations and companies have been registered in goAML as of December 5. This includes all operational banks, financial institutions, and insurance companies. However, cooperatives have shown a lacklustre presence in the system.
The Department of Cooperatives has mandated cooperatives with an annual transaction volume of more than Rs 100 million to report money laundering activities through the goAML system. By December 5, the number of cooperatives registered with the system reached 1,072. However, there are approximately 3,000 cooperatives conducting transactions exceeding Rs 100 million annually.
Due to the low number of cooperatives registered with goAML, the Federal Department of Cooperatives has repeatedly issued directives for cooperative organisations to join the system and begin reporting. The latest notice was issued in July 2023, urging cooperatives to register with the goAML system.
The department first issued a directive in December 2020, instructing cooperatives with annual transactions exceeding Rs 100 million to register in the FIU’s goAML software and report suspicious transactions. However, cooperatives have been reluctant to submit money laundering reports.
Similarly, the participation of venture capital and equity funds licensed by the Securities Board of Nepal in goAML has also been weak. Till date, only one equity fund and two venture capital companies have registered with the system.
The goAML software has been developed to implement provisions for the prevention of money laundering. The system is designed to directly notify the FIU when transactions exceed a certain threshold. It also allows for the reporting of suspicious transactions.
Shyam Krishna Dahal, a trainer specialising in anti-money laundering, highlighted the weak participation of cooperatives in the goAML system. "Compared to banks and insurance companies, cooperatives are lagging in implementing anti-money laundering provisions," he said. "Awareness needs to be raised among cooperatives, and action should be taken against those that fail to comply."
