Kathmandu – Due to governance inefficiencies, Nepal’s international image is tumbledown.

Three recent developments have not only tarnished the country’s global reputation but also posed risks to its financial and trade relations.

Recently, Nepal has appeared on three international negative watchlists. 

Various international bodies and countries have listed Nepal as high-risk, citing inadequate efforts to combat human trafficking and financial crimes.

The Financial Action Task Force (FATF) has recently placed Nepal on its grey list for failing to take effective action against money laundering. 

Despite having laws and institutional mechanisms, FATF stated that Nepal has made insufficient efforts or achieved tangible results, resulting in continued placement on the grey list in the past two assessments.

Similarly, the European Union, based on FATF's findings, has listed Nepal among high-risk countries for financial transactions. 

The EU advises extra caution while dealing with Nepal’s financial system.

The United States has also included Nepal on its human trafficking watchlist, citing insufficient government action. 

The U.S. classifies countries into three tiers: Tier 1 for those with strong anti-trafficking measures, Tier 2 for those making efforts but falling short, and the Tier 2 Watchlist for countries where trafficking is rising or efforts are lacking. 

Nepal is currently on the Tier 2 Watchlist.

Poor governance has led to Nepal’s inclusion in such negative listings. 

The EU had earlier blacklisted Nepali aviation as well.

These listings not only damage Nepal’s international standing but also hinder foreign investment and regular financial transactions. 

Foreign institutions apply stricter procedures when dealing with countries on such lists, causing delays in trade, remittances, and foreign aid.