Kathmandu. The Ministry of Finance has published a draft of the Bill designed to amend and integrate the laws related to foreign exchange to repeal the decades-old acts and make them timely and technology-friendly
.
With the passage of this new bill, the Foreign Exchange Regulation Act, 2019 and the Foreign Investment Restriction Act, 2021 will be completely repealed. The new bill proposes new provisions to maintain the stability of the country’s external sector, control illicit mismanagement of foreign currency and make foreign investment more transparent.
Electronic, digital or virtual currency, cryptocurrency, tokens or information codes that are not legally recognized are prohibited from being used or caused to be used in financial or foreign exchange transactions. It has been proposed that involvement in such transactions is considered against the law.
Hundi defines and completely prohibits any commercial transfer, account adjustment or acceptance of payments within or outside Nepal through any means other than legally recognized payment instruments.
A certain sector, company or establishment can invest in foreign countries. Industries classified as information technology industries or companies earning foreign currency through technology transfer can invest abroad with the permission of the Nepal Rastra Bank. The shares of a foreign company or income to be received by a Nepali citizen as an expert, consultant or employee in foreign countries shall also be regulated and systematic.
The foreign investors invested in Nepal will be allowed to repatriate the amount from the sale of shares, dividends, remaining share after liquidation, technology transfer fee, royalty and interest on the loan outside of Nepal in foreign currency.
For the first time, a legal basis for hedging transactions has been proposed to manage the risks that may occur in foreign exchange. The extent and operation of which shall be as prescribed.
Strict penalties and punishment have been made on the basis of the amount of money in the case of foreign exchange misappropriation and violation of the law. Under this, the penalty of up to two times and imprisonment up to 3 years has been included in addition to the amount of the amount.
If a person holding public office commits an offence, he or she will be sentenced to a maximum of 2 years of imprisonment for double the punishment imposed on another person.
A stringent legal provision has been introduced to seize private or public vehicles used to transport gold, silver or foreign currency clandestinely beyond the prescribed limit without approval.
If any suggestions or amendments are required on the draft of this bill, the information can be sent to the Financial Sector Management and Corporation Coordination Division of the Ministry of Finance within 15 days of publication.
