FATF adopts India’s mutual evaluation report, but flags ‘delays’ in terrorist financing, money laundering

The Financial Action Task force(FATF) adopted a mutual evaluation report that examines India’s effectiveness in anti money laundering, and countering terrorist financing, on June 28. The government has hailed this move as a “significant milestone," as per PTI report.

The session was held from June 26 to June 28, 2024 at Singapore placed India in the ‘regular follow-up’ category, a distinction shared by only four other G20 countries. At the end of the meeting, the global body noted that India was  “achieving good results”, and has reached a “high level of technical compliance,” that matches FATF requirements, said PTI.

India’s performance on the FATF Mutual Evaluation means significant advantages to the country's growing economy. It indicates a healthy overall stability and integrity of the financial system, said the finance ministry.

India however, has to address “delays” in connection with money laundering and terrorist financing prosecutions, flagged FATF.

Headquartered in Paris, the FATF leads global actions for tackling with money laundering, and terrorist financing. Additional secretary in the Union finance ministry and Financial Intelligence Unit (FIU) in-charge Director Vivek Aggarwal, represented the Indian side at the plenary.

India’s mutual evaluation of FATF guidelines, which checks a country’s efficacy in framing laws and policy and its implementation to keep financial crimes in check, was last done in 2010.

This year, the FATF peer review of India ended early after a team of international delegates made an ‘on site’ visit to New Delhi. They further met officials from across all investigative agencies, financial regulators, and judiciary at the state and central levels.

At the conclusion, the statement mentioned India’s need of “improvement” in the supervision and implementation of preventive policies in certain non-financial sectors.

“India also needs to address delays relating to concluding money laundering and terrorist financing prosecutions, and to ensure that CFT measures aimed at preventing the non-profit sector from being abused for terrorist financing are implemented in line with the risk-based approach, including by conducting outreach to non-profit organisations on their terrorist financing risks,” reported the statement.

(With Inputs from PTI)