KATHMANDU: The Nepali Army has initiated steps to open a Letter of Credit (LC) with Himalayan Bank to acquire weaponry from China.
However, the bank has remained hesitant to proceed with the transaction and transfer funds in US Dollars concerns about possible breaches of U.S. sanctions.
The NA is acquiring weaponry including Armored Personnel Carriers (APCs) meant for NA peacekeepers in Sudan, worth Rs 6 billion from China North Industries Group Corporation Limited (Norinco), a Chinese arms manufacturer.
This decision has been made despite Norinco being sanctioned by the United States Treasury Department.
Meanwhile, sources said that the Nepali Army is exploring alternative methods to facilitate the acquisition of weapons and is considering routing the payment through a different country.
The NA has already asked the Ministry of Defense that it would not cancel the weaponry deal unless an official letter was submitted.
However, Defense Minister Purna Bahadur Khadka, also a Nepali Congress leader, has not sent the letter as demanded by the NA to stop the acquisition of the weapons.
Sources, meanwhile, claimed that this may carry consequences, including the potential imposition of financial sanctions, and even the initiation of criminal proceedings.
“There is also a risk that economic sanctions could be targeted towards Nepal’s Central Bank as a result of the NA’s actions,” the source said.
It may be noted that several relatives of Nepali Congress leaders, including Lokendra Karki, the brother of NC leader Gyanendra Karki are actively involved to settle the financial transaction.
It should be recalled that the US had imposed sanctions on two individuals of Myanmar– Tun Min Latt and Tun Min Latt’s wife, Win Min Soe, who is co-owner with her husband of the three business entities: Star Sapphire group of companies, Star Sapphire Trading Company Ltd, and Singapore-based Star Sapphire Group PTE Ltd, whom the US Treasury Department had imposed sanctions for enabling the regime’s continuing atrocities.
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