(14)Nepal made a high-level political commitment in February 2025 to work with the FATF and the APG, which is its FSRB, to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in August 2023, Nepal has made progress on some of the actions recommended in the MER, including by streamlining MLA requests and increasing the capabilities of the FIU. Nepal will continue to work with the FATF to implement its FATF action plan by: improving its understanding of key ML/TF risks; improving risk-based supervision of commercial banks, higher risk cooperatives, casinos, dealers in precious metals and stones, and the real estate sector; demonstrating the identification and sanctioning of materially significant illegal money or value transfer services/hundi providers, without hindering financial inclusion; increasing the capacity and coordination of competent authorities to conduct ML investigations; demonstrating an increase in ML investigations and prosecutions; demonstrating measures to identify, trace, restrain, seize and, where applicable, confiscate proceeds and instrumentalities of crime in line with the risk profile; and addressing technical compliance deficiencies in its targeted financial sanctions regime for TF and PF. While recognising and welcoming the commitment and progress made by Nepal so far, and encouraging further efforts, the Commission concludes that Nepal has not yet fully addressed the concerns that led to its addition to the FATF’s list of ‘Jurisdictions under Increased Monitoring’. Nepal should therefore be considered a high-risk third country.