As the FATF plenary sat in Paris to decide Nepal's fate, we were running around making intense diplomatic efforts at home and Paris. Nepal was at high risk of being blacklisted for not endorsing the bills against money laundering but was allowed to remain in the list of countries with 'Improving Global Anti-Money Laundering and Combating Financing Terrorism Compliance'.

The transitional political situation and the fact that the bills in question are already being tabled in the parliament were factors that are said to have influenced the FATF's decision. Ratification of key UN Conventions (International Convention for the Suppression of the Financing of Terrorism and UN Convention Against Transnational Organised Crime) in June 2011, also helped.

Nepal now has two months to pass the three bills, Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime, that were supposed to be endorsed by 2011. But since the timing coincides with the CA extension when legislators will be completely distracted, we are sure to have another cliffhanger in May.

These bills will help Nepal develop a healthy financial system, create a positive investment environment and boost international trade. But they are stalled in parliament right now because the hardline faction of the Maoists believes that the bills are against national interest and are being imposed on the direction of 'imperialist forces'. These self-professed 'nationalists' chose to boycott the meeting when the bills were being tabled for endorsement in the parliament before the deadline. The real reason for obstructing the bill seems to have been the hardliner's desire to see its own prime minister roast slowly in the fire.

It is difficult to understand what can be more against national interest than holding the country's reputation hostage and not implementing anti-money laundering measures. Nepal could have easily joined the other 15 countries, including Pakistan and Sri Lanka, that were blacklisted last week.

The country still faces a host of money-laundering threats, including those resulting from narcotics trafficking, corruption, smuggling, tax evasion, fraud and human trafficking. Money laundering is also rife because of the country's largely cash economy, fat informal sector and extremely porous border with India.

The consequences of being blacklisted will hit the financial sector and the economy hard. Nepal Investment Year 2012-13 will be dead in the water if the bills are not passed by June. The few investors that are ready to recognise Nepal's potential despite the poor infrastructure, energy and labour problems would also turn away. Nepali banks would lose their credibility and imports would suffer as banks abroad may or may not honour local letters of credit. Exports on the other hand might become more expensive as the costs rise.

International banks could block the bank accounts of Nepali diplomatic missions abroad. Visas would be denied to Nepali nationals. Foreign donors would impose more stringent conditional ties for aid and grants once the country is blacklisted.

Nepal should use this borrowed time wisely and endorse the bills. What can be done in two days should not take two months. The Maoist obstructionists should understand the repercussions of not fulfilling international commitments in fighting the flow of dirty money on the economy.

Doing so would prove that they have lots to hide and are themselves afraid of being extradited, or are sheltering crooks engaged in money-laundering and smuggling.

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