Money Laundering Prevention Act 2064

Chapter-3 Provision On Customer Identification And Transactions

Section 7L: Liability For Wire Transfers
1) Financial institution mandated to undertake wire transfer services as per prevailing laws shall accurately identify and verify the customer before dealing with wire transfer in any
currency of any amount by obtaining the following information and details, including:
(a) Name of the originator,
(b) The account number of the originator or, in the absence of a unique reference number,
(c) Originator‘s address or, in the absence of the address, the citizenship or national identity number or customer identification number or date and place of birth,
(d) Name of beneficiary and account number or, in the absence of an account number, a unique reference number,
(e) Other information or details as prescribed by the Regulator.
Explanation: For the purpose of this section, the term “Originator” also includes the beneficial owner transferring the money.
2) Provisions of subsection (1) shall also be the same for wire transfers bundled into a batch file.
3) Provisions of sub-section (1) shall not be applicable if the transfer is executed as a result of a credit card, debit card or prepaid card transaction for the purchase of goods or services provided that the credit card, debit card or prepaid card number accompanies the transfer resulting from such transactions, or transfer between the accounts of financial institutions as mandated by prevailing laws pursuant to sub-section (1) or (2).
4) The Reporting entity may not conduct identification and verification if the originator or beneficiary, in accordance with sub-section (1), is an existing customer, the reporting entity has already obtained and verified the information required by this section, and there is no suspicion of Money laundering (ML) or
Terrorism Financing (TF).
5) Reporting entity may not require information pursuant to clause (c) of sub-section (1) if the transfer is NRs seventy-five thousand or lower than this.
6) The ordering financial institution shall include and ensure that the information required pursuant to subsection (1) is attached to the payment message throughout the payment chain and to the receiving institution.
7) Any institution working as an intermediary or receiving institution in the chain of wire transfers in Nepal shall ensure that all information pursuant to sub-section (6) has been received.
8) If information is not received pursuant to sub-section (7), the Reporting Entity shall demand it from the ordering institution or institution in the payment chain.
9) Any financial institution in Nepal, working as an intermediary or receiving institution, may suspend, deny or make payment of wire transfer in accordance with its policy and procedures of wire transfer subject to sub-section (10) if the information demanded pursuant to sub-section (8) is not available.
10) Any financial institution in Nepal dealing wire transfer shall develop and implement a risk based on risks policy and procedures including for monitoring, inquiry, suspension, denial, identification of beneficial owner or beneficiary, payment of wire transfer.
11) Any financial institution dealing with wire transfers shall conduct monitoring to ensure whether the information of originator and beneficiary is included or not.
12) Any financial institution dealing with wire transfers and paying amount of NRs seventy five thousand or more shall identify and verify the beneficiary.
13) Financial institution engaged on wire transfer as ordering, intermediary or receiving institution shall keep all details and records of wire transfer for five years at minimum.
14) Financial institution transmitting money or value or making payment through wire transfer or acting as an intermediary while making such payment shall freeze the money immediately restricting access of anybody thereto if finds that such money is going to a person, organisation, group or institution mentioned in chapter 6B.
15) Financial institution servicing for wire transfer shall manage the followings in regards to its agents:-
(a) Implementing the program of prevention and combating money laundering and terrorism financing and monitoring whether it is implemented or not.
(b)Preparation of up-to-date information of agent and publish it in its website publicly.
16) The National Bank will be able to make more necessary and appropriate arrangements regarding wire transfers.