Nepal remains under increased financial monitoring by the Financial Action Task Force (FATF), failing to demonstrate sufficient progress in combating terrorist and proliferation financing. The FATF recently shared its review report, indicating Nepal has not adequately addressed technical deficiencies in its targeted financial sanctions regime. Despite efforts to improve, the country has not met the necessary standards for compliance. This “grey list” status subjects Nepal to increased scrutiny and can hinder international financial transactions and investment. The FATF requires Nepal to strengthen its systems to prevent illicit funds from supporting terrorism or weapons proliferation. Continued failure to comply could lead to further sanctions and economic repercussions. The report’s findings highlight ongoing vulnerabilities within Nepal’s financial framework.