U.S. Department of State Country Reports on Terrorism 2004 - Nepal

In April 2003, Nepal signed an agreement with the US Government establishing an antiterrorism assistance program. The Government continued its strong support of the global coalition against terrorism in 2004, and was responsive to both US and multilateral efforts to police international terrorism. Nepal's primary focus, however, remained the Maoist insurgency, active in Nepal since February 1996.

After unilaterally withdrawing from a seven-month ceasefire in August 2003, the Maoists resumed full-scale hostilities. In 2004 alone, Maoists were responsible for the deaths of at least 383 civilians and 214 Government security forces, with some estimates running as high as 831 victims. The Government has stated that Nepalese security forces have arrested thousands of suspected Maoists and killed more than 1,555 during the year.

Repeated anti-US rhetoric suggests the Maoists view US support for Kathmandu as a key obstacle to their goal of establishing a communist dictatorship in Nepal. Maoist supreme commander Prachanda issued a press statement in July 2004 threatening to use "more violent means" if peace talks with the Government of Nepal were not forthcoming or were unsuccessful. In August and September, Maoists threatened almost 50 companies and forced them to shut down operations. In August, a Maoist-affiliated group stated that it had decided to close down all multinational corporations in Nepal with US investment permanently. All companies reopened in mid-September after an agreement was reached between the Maoist-affiliated group and the Government of Nepal.

In addition to the threats against American-affiliated business enterprises, Maoists have threatened attacks against US and international NGOs, including those associated with Peace Corps programs. In September, Maoists attacked an American NGO worker in midwestern Nepal. They sought to extort money from Nepalis and foreigners to raise funds for their insurgency. The Maoists' public statements have criticized the United States, the United Kingdom, and India for providing security assistance to Nepal. On September 10, Maoists bombed the American Center in Kathmandu. The attack occurred during non-duty hours and there were no injuries, but the blast damaged the facility.

Security remains weak at many public facilities, including Tribhuvan International Airport in Kathmandu. The United States and other donor countries are actively working to improve this situation, but limited Government finances, weak border controls, and poor security infrastructure could make Nepal a convenient logistic and transit point for outside militants and international terrorists.