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FATF

About FATF

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What is FATF

The Financial Action Task Force (FATF) is an inter-governmental body decision-making body. It was established in 1989 during the G7 Summit in Paris to develop policies against money laundering. It is a “policy-making body” which works to generate the political will to bring about national legislative and regulatory reforms in money laundering. It has also started dealing with virtual currencies. The FATF Secretariat is located in Paris.
 
What is the objective of FATF?
 
FATF sets standards and promotes effective implementation of:
 
a. legal, regulatory and operational measures for combating money laundering.
 
b. The FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse. 
 
How many members are there in FATF?
 
As of 2019, FATF consists of thirty-seven member jurisdictions.
 
Is India a member of the Financial Action Task Force?
 
India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership. On June 25, 2010 India was taken in as the 34th country member of FATF.
 
FATF on terror financing
 
FATF's role in combating terror financing became prominent after the 9/11 terror attacks in the US. In 2001 its mandate expanded to include terrorism financing. Financing of terrorism involves providing money or financial support to terrorists. As of 2019, FATF has blacklisted North Korea and Iran over terror financing. Twelve countries are in the grey list, namely: Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
 
What as FATF 'grey list' and 'blacklist'?
 
FATF has 2 types of lists:
 
a.  Black List: Countries knowns as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
 
b. 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.
 
FATF & Pakistan
 
Pakistan has been in the FATF grey list since June 2018 and has been asked to implement the FATF Action Plan fully by September 2019. It was in the same category from 2012 to 2015 too. Pakistan's inclusion in the grey list can be attributed to the fact that the country's anti-terror laws are still not in line with FATF standards and also with the latest UN resolution 2462 that pitches for criminalising terrorist financing. What Pakistan has mostly done in the past is detain both Masood Azhar and Hafiz Saeed for 'apprehension' of breach of peace. The FATF seeks freezing of funds, denial of weapons access and travel ban.
 
While there were some arrests of LeT, JeM, JuD cadres, they were all apprehended under the country's Maintenance of Public Order Act and not the Anti-Terrorism Act, 1997.
 
Consequences of being in the FATF grey list:
 
Considered in the grey list may face
 
1. Economic sanctions from IMF, World Bank, ADB 
 
2. Problem in getting loans from IMF, World Bank, ADB and other countries
 
3. Reduction in international trade
 
4. International boycott
 

Latest Updates on FATF

India has assured support to Iran on sharing technical knowledge and expert advice through the EAG, he said.

Updated On: 26 Nov 2024 | 7:46 PM IST

The global anti-money laundering watchdog noted that the impact of illicit financial flows is felt most strongly by the least developed nations

Updated On: 18 Oct 2024 | 9:45 AM IST

If the FATF includes the sector within the AML/CFT framework, gaming platforms would need to adhere to KYC norms and report suspicious transactions, including identifying their beneficial owners

Updated On: 24 Sep 2024 | 11:05 AM IST

The report said there were approximately 1,75,000 DPMS (dealers of precious metals and stones) in the country

Updated On: 20 Sep 2024 | 10:23 AM IST

As regards the abuse of NPOs for terror financing, Agarwal said the scope for NPOs being misused is very less in India because there is a cap on cash donations

Updated On: 19 Sep 2024 | 11:12 PM IST

Global body says non-profit sector requires protection from terror

Updated On: 19 Sep 2024 | 11:06 PM IST

A team of FATF experts drawn from agencies belonging to Russia, UAE, USA, Brazil, United Kingdom, South Africa and Japan conducted the 'on-site' review as they were in India between Nov 6-24, 2023

Updated On: 19 Sep 2024 | 10:21 PM IST

The report said India implemented such an anti-money laundering (AML) and combating financing of terror (CFT) system that was effective in many respects

Updated On: 19 Sep 2024 | 5:37 PM IST

At present, under the Travel Rules of FATF, data relating to the name of the sender, recipient, and the country of origin is recorded in any cross-border financial transactions

Updated On: 10 Sep 2024 | 11:32 PM IST

Currently, the Travel Rules of Financial Action Task Force under which data relating to name of sender and recipient and the country of origin is recorded in any cross-border financial transactions

Updated On: 10 Sep 2024 | 6:40 PM IST

Financial Action Task Force had in June adopted the mutual evaluation report on India and placed the country in the "regular follow-up" category -- the highest rating given by the global watchdog

Updated On: 10 Sep 2024 | 5:22 PM IST

Raast is Pakistan's first instant payment system, which operates similarly to India's flagship project: Unified Payments Interface (UPI)

Updated On: 22 Aug 2024 | 6:09 PM IST

The recommendation is part of a FATF review of India's anti-money laundering systems that began in 2023

Updated On: 09 Aug 2024 | 1:17 PM IST

The new threshold for due diligence checks was among the measures laid out in Singapore's updated National Strategy for Countering the Financing of Terrorism

Updated On: 01 Jul 2024 | 1:48 PM IST

The global crime watchdog, FATF on Friday adopted mutual evaluation report on India and placed the country in "regular follow-up" category

Updated On: 28 Jun 2024 | 9:01 PM IST

Finmin says it demonstrates the overall stability and integrity of the financial system

Updated On: 28 Jun 2024 | 11:51 PM IST

The UAE is expected to come off the list on Feb. 23, which is the final day of the FATF plenary in Paris, the people said. No final decisions have been made

Updated On: 19 Feb 2024 | 11:30 PM IST

They are individuals entrusted with prominent public functions by a foreign country, including the heads of states or governments

Updated On: 05 Jan 2024 | 11:47 PM IST

In its review published on October 27, FATF has added Bulgaria to the grey list

Updated On: 29 Oct 2023 | 6:55 PM IST

In a comprehensive analysis of black money, R Vaidyanathan's book explores the intricacies of its generation, the impact of tax havens, and the role of global initiatives

Updated On: 24 Oct 2023 | 10:07 PM IST