In an initiative designed to enhance financial transparency and curb money laundering, the Department of Land Management and Archives has mandated that both purchasers and vendors present their bank statements during real estate dealings.
This order, issued on Tuesday under the heading “Directive on the Prevention of Money Laundering and Financing of Terrorist Activities 2082”, aligns with Nepal’s extensive efforts to exit the Financial Action Task Force’s (FATF) grey list. Nepal has been allocated a two-year timeframe to rectify identified deficiencies, and a national action plan has been developed accordingly.
According to the new regulation, during the sale and acquisition of land or property, the reporting institutions must include documented evidence demonstrating that the transaction amount has been transferred directly from the buyer’s bank account to the seller’s bank account.
For transactions between Rs. 10 lakh and Rs. 50 lakh, payments must occur through the banking system or electronic payment platforms. Conversely, for transactions surpassing Rs. 50 lakh, payments must be executed via electronic transfer or through a ‘Good for Payment’ cheque issued in the seller’s name.
Furthermore, if a sales agreement (bainapatra) approved by the local authority is presented and the amount involved exceeds Rs. 10 lakh, the buyer must also provide proof that the payment was made through electronic transfer directly to the seller’s bank account. This supporting documentation must be submitted together with the agreement papers.
Interestingly, the directive also encompasses a rule mandating that if an individual engages in transactions totaling over Rs. 3 crore in a single day, the Nepal Rastra Bank (NRB) must be informed of such actions.
These regulations are integral to Nepal’s wider compliance strategies aimed at bolstering financial accountability and ensuring that real estate transactions are not exploited for money laundering or terrorist financing.
