Money Laundering Prevention Act 2064

Chapter – 1 Preliminary

Section 2: Definition
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In this Act, unless the subject or context otherwise indicates:
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(a) “Investigating Officer” means an officer authorised to investigate in accordance with section 15 and includes a team constituted for investigation.
(b) “High-Ranking Person of an International Organization” means a member, manager, director, deputy director or other person having or having responsibility for the management of an international organisation.
(c) “Terrorist Act” means an act which is deemed to be an act of terrorism in accordance with the law in force,
(d) “Terrorist Individual” means any natural person who commits any of the following acts:
(1) Commits or attempts to commit terrorist acts by any means, directly or indirectly, unlawfully and wilfully,
(2) Participates as an accomplice in terrorist acts,
(3) Organises or directs others to commit terrorist acts or
(4) Contributes or cooperates to a group of persons acting with a common purpose of commissioning terrorist acts where such contribution or cooperation is made intentionally and to further the terrorist act or with the knowledge or the intention of the group to commit a terrorist act.
(e) “Terrorist Organisation” means any organised or unorganised group or organisation of terrorists that commits the following acts:
(1) Unlawfully and knowingly commits or undertakes, directly or indirectly, by any means, any act of terrorism,
(2) Participates as an accomplice in terrorist acts,
(3) Organises or directs others to commit terrorist acts or
(4) Contributes or cooperates to a group of persons acting with a common purpose of commissioning terrorist acts where the contribution or cooperation is made intentionally and with the aim of furthering the terrorist act or with the knowledge or the intention of the group to commit a terrorist act.
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(e1) “Proliferation Financing” means the investment of property or funds for the development, manufacture, production, purchase or sale, description, use, possession, possession, transfer, storage, storage, transportation or handling, extraction or penetration of any nuclear, chemical, biological or poisonous weapon, contrary to applicable law.
(f) “High-Ranking Person” means an indigenous high-ranking person, a foreign high-ranking person or a high-ranking person of an international organisation and includes a class of persons as may be prescribed by the Government of Nepal by publishing a notification in the Nepal Gazette on the recommendation of the National Coordination Committee.
(g) “Corresponding Banking” means the provision of banking services by one financial institution to the customers of another financial institution.
(h) “Property acquired by default” means any property acquired or acquired directly or indirectly by default in respect of, or connection with, the liquidation of property and the term includes any other property or financial gain enhanced by, or in any way partly or wholly transferred or converted from such property.
(i) “Instrument Relating to Delinquency” means any instrument, property or any other instrument used or sought to be used in any manner to commit a delinquency relating to, or connected with, the liquidation of property, in whole or in part.
(j) “Transaction” means any agreement made in order to carry out any economic or business activities, and the term also means the purchase, sale, distribution, transfer or investment and possession of any assets, or any other as follows:
(1) Establishing business relationships,
(2) Opening of an account,
(3) Any deposit or collection, withdrawal, exchange or transfer of funds in any currency or instruments, payment order by electronic or other means,
(4) Use of any type of safe deposit box (locker),
(5) Entering / establishing into any fiduciary relationship,
(6) Any payment made or received in satisfaction, in whole or in part, of any contractual or other legal obligation,
(7) Any payment made or received in respect of a lottery, bet or other game of chance,
(8) Establishing or creating a legal person or legal arrangement, or
(9) Such other act as may be designated by the Government of Nepal by publishing a notice in the Nepal Gazette.
(k) “Legal Arrangement” means trust (express trust) or other similar kind of legal arrangements.
(l) “Legal Person” means any company, corporation, proprietorship, partnership firm, cooperatives, or any other body corporate.
(m) “Fund” means any financial asset, economic resources, property of every kind, whether tangible or intangible, movable or immovable, physical or non- physical (corporeal or incorporeal) physical, electronic, or digital , or the following instruments or resources, however acquired. It shall also include legal documents or instruments in any form, including electronic or any other, evidencing title to, or interest in, such property, instruments or resources:
(1) Bank credits,
(2) Traveller’s cheques,
(3) B
ank cheques
,
(4) M
oney order,
(5) Shares,
(6) Security,
(7) Borrowing (bonds)
(8) Drafts,
(9) Letters of credits,
(10) Any other financial or economic resources.
(n) “Designated non-financial professional or Practitioner” means any person who conducts or carries on following act or business:
(1) Casinos or internet casinos,
(2) The purchase or sale of real estate,
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(2A) A person who sells a vehicle or a person who lends money for the purchase of such an instrument,
(3) Dealing in prescribed precious metals or precious stones,
(4) Notary public, other independent legal and accounting and other similar professionals when they prepare for, engage in, or carry out transactions for a client concerning any of the following activities:
(a) Buying and selling of real state,
(b) Managing of client money, securities or other assets,
(c) Management of bank, savings or securities accounts,
(d) Organisation of contribution and investment during the period of creation, operation (management) of legal persons,
(e) Creation, registration, operation or management of legal person or arrangements, accounting, revenue, financial or business opinion consulting or operations management,
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(e1) audit for the purposes of section 7S, or
(f) Buying  and selling of any business entities.
(5) Trust and company service providers which prepare for, engage in, or carry out transactions on behalf of customers in relation to any of the following services, as a business:
(a) Act as a formation, registration, or management agent of legal persons legal arrangement,
(b) Acting as, or arranging for another person to act as, a partner, director or secretary of a legal person, or to hold a similar position in relation to other legal person,
(c) Providing a registered office, or accommodation, business address or correspondence or administrative address for a legal person or legal arrangement,
(d) Acting as, or appointing or arranging for another person to act as, a trustee of an express trust or other similar arrangement,
(e) Acting as, or arranging for another person to act as, a nominee shareholder for another person pursuant to prevailing law.
(6) Any other business, profession or activity as may be designated by the Government of Nepal by publishing a notice in the Nepal Gazette.
(o) “Prescribed” or “as Prescribed” means prescribed or as prescribed in the rules made under this Act.
(p) “Bearer Negotiable Instrument” means any negotiable instruments including the monetary instruments in bearer form including traveler’s cheques, cheques, promissory notes and money orders that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that holder’s title thereto passes upon delivery or any such instruments in incomplete form or without the name of payee or payable to anyone who holds or receives it.
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(p1) “Board of Directors” “means the Board of Directors pursuant to section 7W.
(q) “Regulatory Body” means an institution established in accordance with the law in force for regulating or supervising an indicator institution and includes a regulatory body appointed by the Government of Nepal in accordance with sub-section (2) of section 7T.
(r) “Currency” means the Nepali currency or foreign currency.
(s) “Rastra Bank” means the Nepal Rastra Bank established by the prevailing law.
(t) “N
ational Servant
” means a person deemed a N
ational Servant
per the prevailing law.
(u) “Real rich” means a natural person who, directly or indirectly, owns or controls or directs or influences a customer, an account, or the person on whose behalf a transaction is conducted, or exercises effective control over a legal person or legal arrangement or remains as an ultimate beneficiary or owner of such activities.
(v) “Financial Information Unit” “means the Financial Information Unit under section 9.
(w) “Financial Institution” “means a person who conducts any of the following activities or operations for on behalf of a customer, as a business:
(1) Accepting deposits or other payable funds including from the public,
(2) Private banking,
(3) Any type of lending,
(4) Financial leasing, except consumer products,
(5) Money or value transfer services, except those limiting their functions solely with passing message for transmitting funds,
(6) Issuing and managing any means of payment namely cheque, draft, money order, debit card, credit card, including any electronic or other instrument of payment,
(7) Financial guarantees and commitments,
(8) Trading in following instruments:
(a) Money market instruments including cheques, bills, certificates of deposit, derivatives, etc.,
(b) Foreign exchange,
(c) Exchange, interest rate and any instrument of value or amount,
(d) Transferable security or
(e) Commodity futures trading.
(9)Participation in securities issues and the provision of financial services related to it,
(10) Individual and collective portfolio management,
(11) Safekeeping and administration of cash or liquid securities on behalf of other persons,
(12)Underwriting and placement of life insurance and other investment related insurance,
(13) Money and currency changing,
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(13a) An investment company, equity fund or similar undertaking for the purposes of sections 7B, 7D, 7P, 7R and 10A,
(14)to invest, administer and manage funds on behalf of persons other than those specified in sub-section (1) to (13); or
(15) The Government of Nepal shall take the prescribed action by publishing the information in the Nepal Gazette.
(x) “Foreign High-Ranking Commissioner” means a foreign head of state, head of government, high-ranking politician, a central official of a national political party, high-ranking administrator, high-ranking judicial official, high-ranking security official and high-ranking official of a state-controlled institution or a person holding or having such responsibility.
(y) “Department” means the Department of Money Laundering Investigation under section 11.
(z) “Person” means a natural or legal person.
(aa)” Report on Suspicious Transactions” is under section 7S.
(bb) “Shell Bank” means a financial institution or group of financial institutions that does not have a physical presence in the country where it is established or permitted or is not within any scope of effective regulation and supervision.
Explanation: For this clause, the presence of a local representative or an employee of a lower level shall be deemed to be the absence of physical presence.
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(bb1) “Coordination Committee” means the coordination committee under Section 7W.
(cc) “Money  laundering and terrorist financing offences” means an offence under Schedule 2.
(dd) “Predicate offence” means an offence specified in the Schedule.
(ee) “Property” means any property, movable or immovable, tangible or intangible, fund or thing or instrument having any value and includes any type of document, instrument, certificate or electronic or other instrument establishing a right, interest, claim or right thereon.
(ff) “Indicative institution” means a financial institution, non-financial professional, or practitioner.
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(gg) “Indigenous High-ranking person” means the President, the Vice-President, the Prime Minister, the Chief Justice, the Speaker of the House of Representatives, the Speaker of National Assembly, the Head of State, the Chief Minister of Government of Nepal, the members of the Federal Parliament, the office bearers of the constitutional bodies, the Speaker of the Provincial Assembly, the Minister of the Provincial Government, the officers of a particular rank or above of the Government of Nepal, the Judges of the High Court or above, the Deputy  Speaker of the Provincial Assembly, the members of the Provincial Assembly, the central office bearers of the political parties at the nation level, the head and deputy head of the district coordination committee, the head and deputy head of the municipality, the chairman and vice-chairman of the municipality, the high office bearers of the institutions wholly or partly owned by the Government of Nepal or the persons having or having such responsibilities.
1 Amended by the Second Amendment.
2 Amendments to the Prevention of Money Laundering and Promotion of Business Environment Act, 2080.
3 Amendment to the Prevention of Money Laundering and Promotion of Business Environment Act, 2080.
4 Amended by the Act to Amend Certain Nepal Acts, 2075.