Section 2: Definition

¹In this Act, unless the subject or context otherwise indicates:

²(a) “Investigating Officer” means an officer authorised to investigate in accordance with section 15 and includes a team constituted for investigation.

(b) “High-Ranking Person of an International Organization” means a member, manager, director, deputy director or other person having or having responsibility for the management of an international organisation.

(c) “Terrorist act” means an act which is deemed to be an act of terrorism in accordance with the law in force;

(d) “Terrorist Person” means a natural person who commits any of the following acts:

(1) unlawfully and knowingly commits or undertakes, directly or indirectly, by any means, any act of terrorism,

(2) to engage in acts of terrorism;

(3) organising or directing others to commit acts of terrorism; or

(4) aiding or contributing to the commission of a terrorist act by a group having a collective intention to commit or intend to commit a terrorist act or knowing that its aid or contribution will promote the commission of a terrorist act;

(e) “Terrorist Organisation” means any organised or unorganised group or organisation of terrorists:

(1) unlawfully and knowingly commits or undertakes, directly or indirectly, by any means, any act of terrorism,

(2) to engage in acts of terrorism,

(3) organising or directing others to commit acts of terrorism, or

(4) aiding or contributing to the commission of an act of terrorism by a group having a collective intention to commit or intend to commit an act of terrorism or knowing that its aid or contribution to an act of terrorism will give rise to such an act of terrorism,

³(e1) “Proliferation Financing” means the investment of property or funds for the development, manufacture, production, purchase or sale, description, use, possession, possession, transfer, storage, storage, transportation or handling, extraction or penetration of any nuclear, chemical, biological or poisonous weapon, contrary to applicable law.

(f) “High-Ranking Person” means an indigenous high-ranking person, a foreign high-ranking person or a high-ranking person of an international organisation and includes a class of persons as may be prescribed by the Government of Nepal by publishing a notification in the Nepal Gazette on the recommendation of the National Coordination Committee.

(g) “Corresponding Banking” means the provision of banking services by one financial institution to its customers through another financial institution.

(h) “Property acquired by default” means any property acquired or acquired directly or indirectly by default in respect of, or connection with, the liquidation of property and the term includes any other property or financial gain enhanced by, or in any way partly or wholly transferred or converted from such property.

(i) “Instrument Relating to Delinquency” means any instrument, property or any other instrument used or sought to be used in any manner to commit a delinquency relating to, or connected with, the liquidation of property, in whole or in part.

(j) “Transaction” means an agreement or any other act for the purchase, sale, distribution, transfer, investment, enjoyment or any other economic or commercial transaction of property:

(1) the establishment of commercial relations;

(2) the opening of an account,

(3) the collection, payment, payment order, exchange or transfer of funds by electronic or any other means through any form of money or instrument,

(4) the use of any safe deposit (locker),

(5) the establishment of beneficial relations;

(6) to give or take payment, in whole or in part, on the basis of any legal or contractual obligation,

(7) to give or take a payment on the basis of a game played to be lost on the basis of a bet, bet or chance,

(8) the establishment or registration of a legal person or legal management,

(9) To do any other work prescribed by the Government of Nepal by publishing a notice in the Nepal Gazette.

(k) “Legal Arrangement” means an express trust or other legal arrangement of a similar nature.

(l) “Legal Person” means a company, institution, co-operative society or any other organised institution and includes a private firm, partnership or non-governmental organisation.

(m) “Fund” means any financial asset, financial instrument or resource, tangible or intangible, movable or immovable, physical or immovable, physical or natural, electronic or digital, any kind of asset, instrument or instrument resource of any kind, including any legal document, instrument, instrument or instrument having any right or interest in such asset or instrument or instrument resource:

(1) a bank loan,

(2) the traveller’s check,

(3) bank check,

(4)  money order,

(5) the share,

(6) the security,

(7) Borrowing (bonds)

(8) the draft,

(9) the evidence,

(10) any other financial or economic resources.

(n) “Non-financial professional or Practitioner” means a professional or practitioner engaged in any of the following professional activities:

(1) Casinos or Internet Casinos.

(2) the purchase or sale of real estate;

³(2A) A person who sells a vehicle or a person who lends money for the purchase of such an instrument,

(3) a trader dealing in specified precious metals or commodities,

(4) a notary public, auditor, accountant or other practitioner of a similar nature acting on behalf of his client or party in the course of, in preparation for, or connection with, any of the following acts;

(a) the sale of real estate;

(b) the management of the client’s funds, securities or other assets,

(c) the management of banking, savings and securities affairs;

(d) the management of the contributions and investments made during the establishment or operation of the legal person,

(e) the creation, establishment, registration, accounting, revenue, financial or commercial opinion, consultation or management of legal persons or legal arrangements;

³(e1) Section 7 (3). for the audit or

(f) the purchase or sale of any business entity.

(5) a company or trust service provider that provides the service of the service professionally while performing or preparing the service or engaging in the service on behalf of its client or party:

(a) to act as an agent for the establishment, registration or management of a legal person or legal management;

(b) by or through any other person acting as a partner, director, secretary or officer of a legal person,

(c) to provide a registered office, address or place of business to a legal person or legal management, or to take charge of the correspondence therefor;

(d) to act as trustee or to nominate a trustee or to cause to be made by other people a legal arrangement or other legal arrangement of a similar nature; or

(e) to act or cause to act on behalf of any person by appointing a shareholder or through any other person in accordance with the prevailing law.

(6) Other professionals or business people appointed by the Government of Nepal by publishing information in the Nepal Gazette.

(o) “Prescribed” or “as Prescribed” means prescribed or as prescribed in the rules made under this Act.

(p) “Holder’s Negotiable Instrument” means a monetary instrument, whether wholly or partly anonymous, bearing a fictitious name or including a traveller’s cheque, cheque, promissory note or cheque, which the holder may use without the consent of any person, or which may receive payment from the person who receives it.

³(p1) “Board of Directors” “means the Board of Directors. The board of directors should be remembered.

(q) “Regulatory Body” means an institution established in accordance with the law in force for regulating or supervising an indicative institution and includes an institution established in accordance with section 7N. Sub-section (2) of the Act consists of the regulatory bodies appointed by the Government of Nepal.

(r) “Currency” means the Nepalese currency or foreign currency.

(s) “Rastra Bank” means the Nepal Rastra Bank established in accordance with the prevailing law.

(t) “Rashtra Sevak” means a person who is deemed to be a Rashtra Sevak in accordance with the prevailing law.

(u) “Real rich” means a natural person who is the ultimate beneficiary or the richest person who directly or indirectly owns, controls, directs or influences a client, business, property, legal person or legal arrangement.

(v) “Financial Information Unit” “means the Financial Information Unit pursuant to section 9.

(w) “financial institution” “means a person acting professionally for, or on behalf of, its customers:

(1) Accepting deposits or receiving other amounts payable by the public,

(2) the operation of private banking,

(3) to make a loan,

(4) to deal with financial leasing other than consumer goods,

(5) to make money or value transfers, other than acting as a medium or other auxiliary service provider in the payment chain,

(6) issuing or managing electronic or any other type of payment instrument, including cheques, drafts, cheques, debit cards, credit cards,

(7) to make a financial commitment;

(8) the manufacture of medical devices,

(a) Money market instruments such as cheques, bills, certificates of deposit, derivatives,

(b) foreign exchange.

(c) an instrument of interest, interest or other similar value or amount,

(d) a transferable security or

(e) Equipment related to the commodity market.

(9) the provision of financial services,

(10) the management of individual or collective portfolios;

(11) to manage cash or liquid assets or safe deposits (lockers) on behalf of other persons,

(12)Underwriting and placement of life insurance and other insurance-related investments,

(13) the amount or amount of money;

³(13a)Section  to act as an investment company, equity fund or similar for,

(14)to invest, administer and manage funds on behalf of persons other than those specified in sub-section (1) to (13); or

(15) The Government of Nepal shall take the prescribed action by publishing the information in the Nepal Gazette.

(x) “Foreign High Commissioner” means a foreign head of state, head of government, high politician, a central official of a national political party, high administrator, high judicial official, high-security official and high official of a state-controlled institution or a person holding or having such responsibility.

(y) “Department” means the Asset Purification Investigation Department pursuant to section 11.

(z) “Person” means a natural person or a legal person.

(aa)” Report on Suspicious Transactions” means the report pursuant to section 7S.

(bb) “Shell Bank” means a financial institution or group of financial institutions which does not have a physical presence in the country in which it is established or permitted or which is not within any scope of effective  regulation and supervision.

Explanation: For the purpose of this clause, the presence of a local representative or an employee of a lower level shall be deemed to be absence of physical presence.

³(bb1) “Co-ordination Committee” means the co-ordination committee pursuant to Section 7W.

(cc) “Asset laundering and terrorist financing offences” means an offence under Schedule 2.

(dd) “Predicate offence” means an offence specified in the Schedule.

(ee) “Property” means any kind of property, movable or immovable, tangible or intangible, fund or thing or instrument having any value and includes any kind of document, instrument, certificate or electronic or other instrument establishing a right, interest, claim or right thereon.

(ff) “Indicative institution” means a financial institution or a non-financial professional or practitioner.

⁴(gg) “Indigenous High-ranking person” means the President, the Vice-President, the Prime Minister, the Chief Justice, the Speaker of the House of Representatives, the Speaker of National Assembly, the Head of State, the Chief Minister of Government of Nepal, the members of the Federal Parliament, the office bearers of the constitutional bodies, the Speaker of the Provincial Assembly, the Minister of the Provincial Government, the officers of a particular rank or above of the Government of Nepal, the Judges of the High Court or above, the Deputy  Speaker of the Provincial Assembly, the members of the Provincial Assembly, the central office bearers of the political parties at the nation level, the head and deputy head of the district coordination committee, the head and deputy head of the municipality, the chairman and vice-chairman of the municipality, the high office bearers of the institutions wholly or partly owned by the Government of Nepal or the persons having or having such responsibilities.

^{1Amended by the Second Amendment.}

^{2Amendments to the Prevention of Money Laundering and Promotion of Business Environment Act, 2080.}

^{3Amendment to the Prevention of Money Laundering and Promotion of Business Environment Act, 2080.}

^{4Amended by the Act to Amend Certain Nepal Acts, 2075.}