Financial Action Task Force (FATF)
Context: The Financial Action Task Force (FATF) said that India’s anti-money laundering and counter-terrorist financing (AML/CFT) regime is achieving “good results”
More in news:
FATF has placed India in its ‘regular follow-up category’ after an evaluation during 2023-24. It is a distinction shared by only four G20 countries.
Steps taken by India:
- Non-financial sectors such as real estate agents, dealers in precious metals and stones, professional accountants, Virtual asset service providers (VASPs) were brought under Prevention of Money Laundering Act (PMLA)
- Actions on NGOs – Seizing assets of NGO like Indians for Amnesty International Trust & Greenpeace India for violating FCRA norms.
- Transition from a cash-based to a digital economy and the implementation of the Jan Dhan, Aadhaar, Mobile (JAM) trinity.
- International cooperation, access to basic and beneficial ownership information, use of financial intelligence, and depriving criminals of their assets,
Improvements needed
- India needs to address delays relating to concluding money laundering (ML) and terrorist financing (TF) prosecutions and
- Ensure that counter-terrorism laws are not misused to target NGOs and policy think tanks, including Amnesty International and Greenpeace.
- Improvements are needed to strengthen the supervision and implementation of preventive measures in some of the non-financial sectors.
About FATF
Origin: FATF is an intergovernmental body established in 1989 by the G7
Headquarters: Paris, France.
FATF Secretariat: is located at the OECD headquarters in Paris.
Member countries :39 countries including two regional organisations the European Commission, and the Gulf Cooperation Council .
- India became a member of FATF in 2010.
- FATF suspended membership of the Russian Federation on 24 February 2023
Objective :
- To examine and develop measures to combat money laundering.
- In 2001, expanded its mandate to also combat terrorist financing.
- In April 2012, it added efforts to counter the financing of proliferation of Weapons of Mass Destruction (WMD)
- The FATF holds countries to account that do not comply with the FATF Standards by placing them under grey and black list.
Grey List:- Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list.
- This inclusion serves as a warning to the country that it may enter the blacklist.
Black List:- Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist.
- These countries support terror funding and money laundering activities.
- Three countries North Korea, Iran, and Myanmar are currently in FATF’s blacklist.