REGULATION UNIT STANDARD

CENTRAL TRADE Documents requirements prior to Issuance

DOI Central Trade/NRB Unified Circular of L/C

Issuance of LC with Charter Party Clause

DOI Central Trade CENTRAL TRADE
List of all discrepant documents not retired
DOI Central Trade CENTRAL TRADE within 10 days after receipt

Documents requirement for Export

documents under Collections/Negotiation

DOI Central Trade/NRB Unified Circular CENTRAL TRADE

Documents required under Cash incentive

on Export

DOI Central Trade/NRB Unified Circular CENTRAL TRADE

DOI Central Trade CENTRAL TRADE PRIOR TO RELEASE OF CUSTOMS MARGIN

DELETION OF FORCE MAJEURE CLAUSE

DOI Central Trade CENTRAL TRADE (UNCONDITIONAL)
REGULATION UNIT STANDARD

OTHER INTERNATIONAL REGULATORY CENTRAL TRADE Red Flags -

COMPETENT AUTHORITY

REGULATORY REQUIREMENTS FOR

DOI Central Trade CENTRAL TRADE DAP/DAA
 REGULATORY REQUIREMENTS FOR
DOI Central Trade CENTRAL TRADE DAP/DAA

Issuance of Bank Guarantees tenure above

Credit Policy Guidelines CENTRAL TRADE One Year

COMPLIANCE MANUAL/OTHER Screening Hits related to Sanctions or

INTERNATIONAL REGULATORY CENTRAL TRADE Terrorist Financing
COMPETENT AUTHORITY
Financial Crime Riks
The Wolfsberg Trade Finance Principles CENTRAL TRADE

REGULATION UNIT STANDARD

Customer

Countries

Anti-TBML Best Practices –Red Flag CENTRAL TRADE

Identification

Transactions and Goods

Documentation and Products

 Documentation and Products

REGULATION UNIT STANDARD

Anti-TBML Best Practices –Red Flag Identification of risks and red flags At the
Identification time of issuance of LC

Compliance Manual/The Wolfsberg Trade CENTRAL TRADE TRADE Based -Due Dilligence
Finance Principles

TitleIII of the USA PATRIOT ACT, the

“International Money Laundering
Abatement and Anti-Terrorist Financing
Act of 2001” instituted stricter
requirements for AML reporting, enhanced
due diligence on new foreign accounts,
and prohibited the ownership of
correspondent accounts in Foreign Shell
USA PATRIOT Act, Title III Banks.

OFAC administers and enforces economic

and trade sanctions based on U.S. foreign
policy and national security goals against
targeted foreign countries, terrorists,
international narcotic traffickers, and those
engaged in activities related to the
proliferation of weapons of mass
OFAC Compliance destruction.
Bank Secrecy Act (“BSA”) Trade finance activities of banks are
subject to AML laws and regulations of the
BSA and must be part of a bank’s BSA
compliance program. The Bank Secrecy
Act must include a customer identification
program with risk-based procedures that
enable the bank to form a reasonable
belief that it knows the true identity of its
customers.

Anti TBML main C

Trade-related Due Diligence

Transaction Monitoring

KYC & Customer Relationship

Anti-TBML Best Practices –Red Flag

Identification
 CHECKS & CONTROL FREQUENCY
Proforma Invoice
BBN Form No 3 (Convertible CCY)
Income Tax Certifice
Firm/Company Registration Certificate
Board Minute of Company Specifying the Authorised Person
REGULAR/CASE TO CASE BASIS
Authority Letter-To carry out transactions (Government Offices)
VAT Certificate-To import Liquors & Cigarettes
Indemnity-For calling One Bill of Lading directly by Applicant
Insurance Policy if applicable (prior to transmit)
Approval from Higher Management & Indemnity from applicant
REGULAR/CASE TO CASE BASIS

Reporting to senior management and Compliance Department Weekly to COO through Head-CTD

Customs Declaration Form (pragyapan patra/Yellow paper),

NRB Export Declaration Form (Bi.Bi.Ni. Form No. 1, 3 rd and 4th copy),

REGULAR/CASE TO CASE BASIS

L/C copy duly endorsed by customs office and
Request in writing by the authorised signatory of the Exporter to negotiate or
send the Documentary Bills on collection basis
Documents certifying export of goods via Nepal.

Document from Department of Industry determining value added

percentage. REGULAR/CASE TO CASE BASIS
Bank statement /document certifying date and receipt of amount in foreign
currency against export payment and deposit of the same in exporter’s
account.

BIBINI F. No. 4 from the customs office

copy of the Import Duty paid receipt and Customs Declaration Form REGULAR/CASE TO CASE BASIS
(Pragyapan Patra)
legal vetting approval by Chief Executive Officer or as delegated by CEO from
time to time. REGULAR/CASE TO CASE BASIS

CHECKS & CONTROL FREQUENCY

Dual Use Goods-Industrial Ceramics or Composite Materials
Applicant is overly keen to waive discrepancies
Pre-accepted discrepancy's by the applicant
Undefined charges over xx% of the total value (e.g. 25%)
Price of the goods manifestly unusual
Request for proceeds of the transaction to be paid to an unrelated or unusual
party REGULAR/CASE TO CASE BASIS

Goods involved are AML high risk, e.g. Sugar, Cement, Precious gemstones,
Liquor, Scrap Metals
Beneficiary Name indicates potential military involvement (e.g. Ministry of
Defence)
Unusal Transactions, One time Transactions
Firm/company registration certificate (renewed copy where renewal is
applicable)
Income Tax (VAT/PAN) Certificate (Tax Clearance Certificate)
Board Minute of company specifying the authorized person (s) for operating
all the related transactions
Copy of citizenship of the authorized signatory (ies)

REGULAR/CASE TO CASE BASIS

If the proprietor of a sole proprietorship/partnership firm appoints another
person on behalf of the firm/company, an authority letter authorizing the
designated person needs to be obtained. Along with the letter, a copy of the
Citizenship Certificate of the said person is also to be obtained
REGULAR/CASE TO CASE BASIS

If the import of goods is on other than CIF basis, separate Invoice showing
name of goods, price per unit, freight cost and insurance premium must be
attached with the documents

In case of import of goods from third countries transit via Kolkata Port, an
approval of Government of Nepal, Department of Commerce is necessary and
this must be compulsorily intimated in writing while intimating the importer
about arrival of documents under DAP and DAA.

Approval from Higher Management

REGULAR/CASE TO CASE BASIS
Screening against a blacklist database comprising organizations, individuals,
goods, vessels and countries compiled by regulatory-competent authorities REGULAR/CASE TO CASE BASIS

REGULAR/CASE TO CASE BASIS

CHECKS & CONTROL FREQUENCY

Excessive insistence of the customer to complete the transaction quickly.

Transactions which involve front or shell companies.
Transactions which are between parties controlled by the same business
entity.
Transactions which are inconsistent with the customer’s business and
transaction history.

Transacting parties who share the same address or lack a valid address.
Clear disregard to apparent discrepancies by the customer.

Inability of the customer to produce invoices, bills of lading, or other

appropriate documentation, to support a requested bank transaction.
A shipment to or from a jurisdiction designated as high risk for money
laundering activities (i.e. OFAC sanctioned countries).

Trans-shipment of the trade goods through one or more jurisdictions for no

apparent economic reason (or any other justifiable reason).
Receipt of cash or other payments from third party entities that have no
apparent connection to the transaction.
A significant discrepancy between the product/commodity’s value as
reported on the invoice and its fair market value. CASE TO CASE BASIS

Trade goods that are designated as dual-use technologies or products.

Trade goods that are designated as high-risk for money laundering activities.
An important discrepancy between the description of the trade goods on the
invoice and the bill of lading/actual goods shipped.

Unexpected changes to payment orders.

Unusual use of intermediaries during the transaction process.

“Unnecessarily complex” and confusing transaction structures. These

structures potentially aim to obscure a transaction’s true purpose and nature.
A payment method that does not match the risk characteristics of the
transaction.
A transaction that involves the use of repeatedly amended or frequently
extended terms (e.g. letters of credit).
Requests by exporters to take back and replace trade and shipping
documents, notably if the new documents provided have been altered or
issued by a different entity.
Abnormal markings on monetary instruments.
Modifications to third party documents, such as Customs forms.
CHECKS & CONTROL FREQUENCY
1.Nature of the goods ordered(not aligned with the expected activity of the
buyer,origins,quantities,etc.)
2.Country and name of supplier on sanctions/terrorist listing
3.Risks associated with the LC structure
REGULAR/CASE TO CASE BASIS
i.Payment instructions amended several times
ii.Complexity of the financial products used
4.Country and name of Advising Bank and reputation
5.False payment information
Due diligence should include gathering sufficient information on Applicants
and Beneficiaries as well as information on the goods traded and the REGULAR/CASE TO CASE BASIS
methods of transportation (i.e. vessels).

Intercept and obstruct Terrorism

Financial Institutions, including nonbank financial institutions and U.S.

subsidiaries of foreign financial institutions

Support U.S. national security

Banks in the United States, including foreign branches and foreign

subsidiaries of U.S. banks
Financial institutions in the United States Detect and prevent money laundering

Due diligence should include gathering sufficient information on Applicants

and Beneficiaries as well as information on the goods traded and the
methods of transportation (i.e. vessels).

Transaction Monitoring Program should monitor and alert transactions for

potential violations of Anti-Money Laundering Laws and Sanctions Programs.

1.Establish the identity of the customer;

2.Understand the nature of the customer’s activities; and
3.Assess the customer money laundering risks to establish the necessary level
of monitoring

Is the nature of each trade consistent with the customer's business?

Is the buyer, seller, vessel or bank involved in the trade on a sanctions list?
Is there potential for tax avoidance or money laundering?

Is there complete, accurate and precise documentation for each trade?

REGULATION UNIT STANDARD
UNIFIED CIRCULAR 2074 CENTRAL TRADE To import Food items
To import Copper, Brass, Bronze, Aluminium,
UNIFIED CIRCULAR 2074 CENTRAL TRADE and Zinc Scrapes

CENTRAL TRADE To
UNIFIED CIRCULAR 2074
Import old clothes, metals, plastic goods,
second hand machines by the trading firms

CENTRAL TRADE To
UNIFIED CIRCULAR 2074
Import poppy seed. (Restriction of
Quantity)
UNIFIED CIRCULAR 2074 CENTRAL TRADE To import/Export of alcohols

UNIFIED CIRCULAR 2074 CENTRAL TRADE To import Raw Wool

UNIFIED CIRCULAR 2074 CENTRAL TRADE To import Chemical Fertilizer thru LC

CENTRAL TRADE To
UNIFIED CIRCULAR 2074
import of fabrics (raw materials) from
India against convertible FCY
To import of drug if in case of import of
UNIFIED CIRCULAR 2074 CENTRAL TRADE medicine through LC for a pharmaceutical
unit

CENTRAL TRADE Rquirements

UNIFIED CIRCULAR 2074
of Business Credibility
Information
UNIFIED CIRCULAR 2074 CENTRAL TRADE Reporting of LC details to NRB

CENTRAL TRADE BBN

UNIFIED CIRCULAR 2074
Form No 3 to NRB, Department of
Customs

REGULATION UNIT STANDARD

Hard copies of BIBINI F. No. 4 (all convertible

UNIFIED CIRCULAR 2074 CENTRAL TRADE FCY L/Cs paid) to NRB

CENTRAL TRADE BBN

UNIFIED CIRCULAR 2074
Form No 4 and 4 Ga not returned within
90 Days from Customs Office

UNIFIED CIRCULAR 2074 CENTRAL TRADE Details of all non-utilization of NRB cheque

Compliance Manual &

Policies and procedures CENTRAL TRADE Implement AML Policies and Procedures
implemented globally

NRB UNIFIED DIRECTIVES CENTRAL TRADE Financial guarantee

URDG 758 & DOI CENTRAL TRADE Requirements for demand

Customs Regulation 2064

(Rule No. 17) CENTRAL TRADE Claim under BG by Customs Office
NRB Unified Directives
2072 CENTRAL TRADE Invocation of Bank Guarantee

Receipt of Documents after 45 days from the

NRB Unified Circular 2074 CENTRAL TRADE date of transport documents (Stale Bill of
Lading)

CENTRAL TRADE Unreturned

NRB Unified Circular 2074
Import payment Certificate (BBN
Form 4 & 4 Ga)
REGULATION UNIT STANDARD
NRB Unified Circular 2074 CENTRAL TRADE Usance Period

NRB Unified Circular 2074 CENTRAL TRADE NRB Security Margin

ICC UCP 600 CENTRAL TRADE Settlement of LC documents

NRB Unified Circular 2074 CENTRAL TRADE Advance Payment under LC

CENTRAL TRADE Enhanced risk-based approach to additional

shipping checks

CENTRAL TRADE Identify potential additional keywords for use

in screening relating to dual-use goods
CHECKS & CONTROL FREQUENCY
Approval from Department of Food and Technology and Quality Control Case to case to basis

Approval from Ministry of Environment, Science, & Technology Case to case to basis

Approval from Ministry of Environment, Science and Technology Case to case to basis

Approval from Ministry of Commerce and Supplies, Department of

Commerce Case to case to basis

Import/Export Permit from Ministry of Finance, Department of Inland

Revenue Case to case to basis
Approval from Ministry of Commerce and Supplies, Department of
Commerce (Trade and Export Promotion Centre) Case to case to basis

Prior to issue of LC: Equivalent to 2 PCT CASH MARGIN OR BOND OR DEV

BOND OR Acceptable Security as Collateral.
In case of under shipment of fertilizer, reporting to be done to NRB holding Case to case to basis
Security deposit kept.

In case of import of fertilizer against Bank Gtee, approval of NRB is required.

Import Permit from Nepal Readymade Garment Association Case to case to basis

Approval of Department of Drug Administration Case to case to basis

Equivalent to USD 50K or above LC value payble at Sight Case to case to basis
LC Open, Amendment, Payment Daily Basis/Case to Case Basis

Hard Copies of BBN 3 Form of LC Issuance and Amendment

Daily: Inside Valley Branches and Weekly:
Outside Valley Based Branches

CHECKS & CONTROL FREQUENCY

Reporting to NRB
Daily: Inside Valley Branches and Weekly:
Outside Valley Based Branches

Reporting to NRB Weekly 7 days after 90 days deadline

Reporting to NRB 90 after issuance of Cheq

First Week after crossing 90 Days or 120
Days

Using red flags to identify Suspicious transactions Case to case to basis

Ristriction to issue Financial Guarantee Case to case to basis

Supporting documents as specified in the guarantee and written statement

in what respect the applicant is in breach of its obligations under the
underlying relationship.

A demand under the counter-guarantee shall in any event be supported by Case to case to basis
a statement, by the party, to whom the counter-guarantee was issued,
indicating that such party has received a complying demand under the
guarantee or counter-guarantee issued by that party.

To pay the amount within 15 days from the date of claim by the Custom
Office (As Per NRB, to pay within 7 days). Case to case to basis
If any bank guarantee issued by a bank or financial institution, fulfilling all
procedures, is invoked, the bank shall decide within 7 days whether to pay Case to case to basis
or decline the invocation.

To be reported to NRB Case to case to basis

To be reported to NRB 7 days after 90 days deadline

CHECKS & CONTROL FREQUENCY
LC can be issued Upto 120 days Credit period for Trading Firm and Case to case to basis
no restrictions for Industry.
2 PCT and 10 PCT for Industry and Trading Firm Respectively Case to case to basis
Documents must be settled/accepted within five banking days
following the day of receipt of complying documents. Case to case to basis

Advance Payment Guarantee equivalent to Advance Amount or

Upto Limit of TT/Draft (USD 50 K) may be released as advance Case to case to basis
payment under LC. However, additional 10 PCT of LC value to be
hold if in case of advance payment above USD 50 K not crossing 50
PCT of LC value.

List of goods introduced into screening system

REGULATION UNIT STANDARD CHECKS & CONTROL FREQUENCY
UNIFIED CIRCULAR CENTRAL TRADE To import Food items; Approval from Department of Food and Prior to issuance of LC; Prior to Release of Case to case basis
2074 Technology and Quality Control must be obtained. Documents under DAP/DAA

UNIFIED CIRCULAR CENTRAL TRADE To import Copper, Brass, Bronze, Aluminium, and Zinc Scrapes; Prior to issuance of LC; Prior to Release of Case to case basis
2074 Approval from Ministry of Environment, Science, & Technology Documents under DAP/DAA

UNIFIED CIRCULAR CENTRAL TRADE To Import old clothes, metals, plastic goods, second hand Prior to issuance of LC; Prior to Release of
machines by the trading firms; Approval from Ministry of Case to case basis
2074 Documents under DAP/DAA
Environment, Science and Technology

UNIFIED CIRCULAR CENTRAL TRADE To Import poppy seed. (Restriction of Quantity); Approval from Prior to issuance of LC; Prior to Release of Case to case basis
2074 Ministry of Commerce and Supplies, Department of Commerce Documents under DAP/DAA

UNIFIED CIRCULAR CENTRAL TRADE To import/Export of alcohols; Import/Export Permit from Prior to issuance of LC; Prior to Release of Case to case basis
2074 Ministry of Finance, Department of Inland Revenue Documents under DAP/DAA

UNIFIED CIRCULAR CENTRAL TRADE To import Raw Wool; Approval from Ministry of Commerce and Prior to issuance of LC; Prior to Release of
Supplies, Department of Commerce (Trade and Export Case to case basis
2074 Documents under DAP/DAA
Promotion Centre)
To import Chemical Fertilizer thru LC: Case to case basis
Equivalent to 2 PCT CASH MARGIN OR BOND OR DEV BOND OR CTD to make sure Cash Margin is kept Prior to Case to case basis
Acceptable Security as Collateral to be kept. issuance of LC
UNIFIED CIRCULAR CENTRAL TRADE
2074 CTD shall Report to NRB holding Security deposit
In case of under shipment of fertilizer Case to case basis
kept in such case.
Approval of NRB is required prior to issuance of
In case of import of fertilizer against Bank Gtee Case to case basis
Credit.
UNIFIED CIRCULAR CENTRAL TRADE To import of fabrics (raw materials) from India against Permit is required prior to issuance of LC; Must be
convertible FCY; Import Permit from Nepal Readymade Case to case basis
2074 kept in File
Garment Association
UNIFIED CIRCULAR To import of drug if in case of import of medicine through LC Approval of Department of Drug Administration to
CENTRAL TRADE for a pharmaceutical unit Case to case basis
2074 be obtained by CTD prior to issue such LC.
UNIFIED CIRCULAR CENTRAL TRADE Rquirements of Business Credibility Information report for Credibility Report of Beneficiary must be obtained Case to case basis
2074 issuance of LC Equivalent to USD 50K or above payble at Sight. by CTD and kept in File, Prior to Transmission of LC
CTD shall be responsible for all internal and external
UNIFIED CIRCULAR CENTRAL TRADE Reporting of LC details to NRB reporting of LC Open, Amendment, Payment to NRB Daily Basis/Case to Case
2074 and Concerned Authority as per requirement of NRB Basis
FCY Circular 2074.
REGULATION UNIT STANDARD CHECKS & CONTROL FREQUENCY
 Daily: Inside Valley
Hard Copies of BBN 3 Form of LC Issuance and Branches and Weekly:
UNIFIED CIRCULAR Amendment shall be done by CTD after issuance of Outside Valley Based
2074 CENTRAL TRADE BBN Form No 3 to NRB, Department of Customs LC. Branches
Daily: Inside Valley
After Settlement of Import Bills and upon Issuance
UNIFIED CIRCULAR CENTRAL TRADE Hard copies of BIBINI F. No. 4 (all convertible FCY L/Cs paid) to Branches and Weekly:
of BBN Form, Reporting to NRB shall be done by
2074 NRB Outside Valley Based
CTD. Branches
UNIFIED CIRCULAR CENTRAL TRADE BBN Form No 4 and 4 Ga not returned within 90 Days from In case of Non return of such documents, CTD shall Weekly 7 days after 90
2074 Customs Office report to NRB days deadline
In case of Non utilization of NRB Cheque issued by First Week after crossing
UNIFIED CIRCULAR CENTRAL TRADE Details of all non-utilization of NRB cheque Bank, CTD shall report to NRB 90 days after issuance 90 Days or 120 Days
2074 of such Cheque
NRB UNIFIED CTD shall not accept any request to issue financial
DIRECTIVES CENTRAL TRADE Ristriction to issue Financial Guarantee guarantee of the customer Case to case basis

Supporting documents as specified in the guarantee

and written statement in what respect the applicant Case to case basis
is in breach of its obligations under the underlying
relationship.

CENTRAL TRADE What are the Requirements for demand for payment under
URDG 758 & DOI A demand under the counter-guarantee shall in any
Guarantee issued by MBL?
event be supported by a statement, by the party, to
whom the counter-guarantee was issued, indicating Case to case basis
that such party has received a complying demand
under the guarantee or counter-guarantee issued by
that party.

To pay the amount within 15 days from the date of

Customs Regulation CENTRAL TRADE How to handle a Claim under BG by Customs Office? claim by the Custom Office (As Per NRB, to pay Case to case basis
2064 (Rule No. 17) within 7 days).
If any bank guarantee issued by a bank or financial
NRB Unified institution, fulfilling all procedures, is invoked, the Case to case basis
CENTRAL TRADE Invocation of Bank Guarantee
Directives 2072 bank shall decide within 7 days whether to pay or
decline the invocation.
NRB Unified Circular CENTRAL TRADE Receipt of Documents after 45 days from the date of transport CTD shall report to NRB Case to case basis
2074 documents (Stale Bill of Lading)
NRB Unified Circular CENTRAL TRADE Unreturned Import payment Certificate (BBN Form 4 & 4 Ga) 7 days after 90 days
CTD shall report to NRB
2074 deadline
REGULATION UNIT STANDARD CHECKS & CONTROL FREQUENCY
NRB Unified Circular CENTRAL TRADE How long a Credit/Usance Period be issued under LC? LC can be issued Upto 120 days Credit period for Case to case basis
2074 Trading Firm and no restrictions for Industry.
NRB Unified Circular 2 PCT and 10 PCT for Industry and Trading Firm
2074 CENTRAL TRADE NRB Security Margin Respectively Case to case basis

Documents must be settled/accepted within five

ICC UCP 600 CENTRAL TRADE Timeline for Settlement of LC documents (Clean) banking days following the day of receipt of Case to case basis
complying documents.
Advance Payment Guarantee equivalent to Advance Case to case basis
Amount or

NRB Unified Circular CENTRAL TRADE Requirement for an Advance Payment under LC Upto Limit of TT/Draft (USD 50 K) may be released
2074 as advance payment under LC. However, additional
10 PCT of LC value to be hold if in case of advance Case to case basis
payment above USD 50 K not crossing 50 PCT of LC
value.

CENTRAL TRADE Enhanced risk-based approach to additional shipping checks

CENTRAL TRADE Identify potential additional keywords for use in screening List of goods introduced into screening system
relating to dual-use goods
 REGULATION UNIT STANDARD

Documents
DOI Central Trade/NRB requirements
CENTRAL TRADE
Unified Circular prior to Issuance
of L/C

DOI Central Trade CENTRAL TRADE Issuance of LC

with Charter
List ofClause
Party all
discrepant
DOI Central Trade CENTRAL TRADE documents not
retired within 10
days after
receipt
Documents
requirement for
DOI Central Trade/NRB Export
CENTRAL TRADE documents
Unified Circular
under
Collections/Neg
otiation
Documents
required under
DOI Central Trade/NRB Cash incentive
CENTRAL TRADE
Unified Circular on Export
PRIOR TO
RELEASE OF
DOI Central Trade CENTRAL TRADE CUSTOMS
MARGIN
DOI Central Trade CENTRAL TRADE DELETION OF
FORCE MAJEURE
REGULATION UNIT CLAUSE
STANDARD
(UNCONDITIONA
L)

OTHER INTERNATIONAL
REGULATORY COMPETENT CENTRAL TRADE Red Flags -
AUTHORITY

REGULATORY
DOI Central Trade CENTRAL TRADE REQUIREMENTS
FOR DAP/DAA
 Issuance of Bank
Credit Policy Guidelines CENTRAL TRADE Guarantees
tenure above
One Year
Screening Hits
COMPLIANCE related to
MANUAL/OTHER Sanctions or
INTERNATIONAL CENTRAL TRADE Terrorist
REGULATORY COMPETENT Financing
AUTHORITY

The Wolfsberg Trade Finance CENTRAL TRADE Financial Crime

Principles Riks

REGULATION UNIT STANDARD

Customer

Countries

Anti-TBML Best Practices – CENTRAL TRADE

Red Flag Identification

Transactions and
Goods

Documentation
and Products

REGULATION UNIT STANDARD

Identification of
Anti-TBML Best Practices – risks and red
Red Flag Identification flags At the time
of issuance of LC

Compliance Manual/The TRADE Based

Wolfsberg Trade Finance CENTRAL TRADE -Due Dilligence
Principles
 FREQUE
CHECKS & CONTROL NCY
Proforma Invoice
BBN Form No 3 (Convertible CCY)
Income Tax Certifice
Firm/Company Registration Certificate
REGULAR
Board Minute of Company Specifying the Authorised Person /CASE TO
CASE
Authority Letter-To carry out transactions (Government Offices) BASIS
VAT Certificate-To import Liquors & Cigarettes
Indemnity-For calling One Bill of Lading directly by Applicant
Insurance Policy if applicable (prior to transmit)
REGULAR
Approval from Higher Management & Indemnity from applicant /CASE TO
CASE
BASIS
Weekly
to COO
Reporting to senior management and Compliance Department through
Head-
CTD
Customs Declaration Form (pragyapan patra/Yellow paper),
NRB Export Declaration Form (Bi.Bi.Ni. Form No. 1, 3 rd and 4th copy), REGULAR
/CASE TO
L/C copy duly endorsed by customs office and CASE
BASIS
Request in writing by the authorised signatory of the Exporter to negotiate or send the Documentary
Bills on collection basis
Documents certifying export of goods via Nepal.
REGULAR
Document from Department of Industry determining value added percentage. /CASE TO
CASE
Bank statement /document certifying date and receipt of amount in foreign currency against export BASIS
payment and deposit of the same in exporter’s account. REGULAR
BIBINI F. No. 4 from the customs office
/CASE TO
copy of the Import Duty paid receipt and Customs Declaration Form (Pragyapan Patra) CASE
REGULAR
BASIS
legal vetting approval by Chief Executive Officer or as delegated by CEO from time to time. /CASE TO
CASE
FREQUE
BASIS
CHECKS & CONTROL NCY
Dual Use Goods-Industrial Ceramics or Composite Materials
Applicant is overly keen to waive discrepancies
Pre-accepted discrepancy's by the applicant
Undefined charges over xx% of the total value (e.g. 25%)
REGULAR
Price of the goods manifestly unusual /CASE TO
CASE
Request for proceeds of the transaction to be paid to an unrelated or unusual party BASIS
Goods involved are AML high risk, e.g. Sugar, Cement, Precious gemstones, Liquor, Scrap Metals
Beneficiary Name indicates potential military involvement (e.g. Ministry of Defence)
Unusal Transactions, One time Transactions
Firm/company registration certificate (renewed copy where renewal is applicable)
Income Tax (VAT/PAN) Certificate (Tax Clearance Certificate)
Board Minute of company specifying the authorized person (s) for operating all the related
transactions REGULAR
Copy of citizenship of the authorized signatory (ies) /CASE TO
CASE
If the proprietor of a sole proprietorship/partnership firm appoints another person on behalf of the BASIS
firm/company, an authority letter authorizing the designated person needs to be obtained. Along with
If
thethe import
letter, of goods
a copy of theisCitizenship
on other than CIF basis,
Certificate of separate Invoiceisshowing
the said person name
also to be of goods, price per
obtained
unit, freight cost and insurance premium must be attached with the documents
In case of import of goods from third countries transit via Kolkata Port, an approval of Government of
Nepal, Department of Commerce is necessary and this must be compulsorily intimated in writing
while intimating the importer about arrival of documents under DAP and DAA.
Approval from Higher Management REGULAR
/CASE TO
CASE
BASIS
Screening against a blacklist database comprising organizations, individuals, goods, vessels and
countries compiled by regulatory-competent authorities REGULAR
/CASE TO
CASE
BASIS
REGULAR
/CASE TO
CASE
BASIS
FREQUE
CHECKS & CONTROL NCY
Excessive insistence of the customer to complete the transaction quickly.
Transactions which involve front or shell companies.
Transactions which are between parties controlled by the same business entity.
Transactions which are inconsistent with the customer’s business and transaction history.
Transacting parties who share the same address or lack a valid address.
Clear disregard to apparent discrepancies by the customer.
Inability of the customer to produce invoices, bills of lading, or other appropriate documentation, to
support a requested bank transaction.
A shipment to or from a jurisdiction designated as high risk for money laundering activities (i.e. OFAC
sanctioned countries).
Trans-shipment of the trade goods through one or more jurisdictions for no apparent economic
reason (or any other justifiable reason).
Receipt of cash or other payments from third party entities that have no apparent connection to the
transaction.
A significant discrepancy between the product/commodity’s value as reported on the invoice and its
fair market value. CASE TO
CASE
Trade goods that are designated as dual-use technologies or products. BASIS
Trade goods that are designated as high-risk for money laundering activities.
An important discrepancy between the description of the trade goods on the invoice and the bill of
lading/actual goods shipped.
Unexpected changes to payment orders.
Unusual use of intermediaries during the transaction process.
“Unnecessarily complex” and confusing transaction structures. These structures potentially aim to
obscure a transaction’s true purpose and nature.
A payment method that does not match the risk characteristics of the transaction.
A transaction that involves the use of repeatedly amended or frequently extended terms (e.g. letters
of credit).
Requests by exporters to take back and replace trade and shipping documents, notably if the new
documents provided have been altered or issued by a different entity.
Abnormal markings on monetary instruments.
Modifications to third party documents, such as Customs forms.
FREQUE
CHECKS & CONTROL NCY
1.Nature of the goods ordered(not aligned with the expected activity of the
buyer,origins,quantities,etc.)
2.Country and name of supplier on sanctions/terrorist listing
3.Risks associated with the LC structure REGULAR
/CASE TO
i.Payment instructions amended several times CASE
BASIS
ii.Complexity of the financial products used
4.Country and name of Advising Bank and reputation
5.False payment information
REGULAR
/CASE TO
CASE
Due diligence should include gathering sufficient information on Applicants and Beneficiaries as well BASIS
as information on the goods traded and the methods of transportation (i.e. vessels).