Singapore PM and others present during the FATF meeting in Singapore (file photo)
– Photo: @FATFNews
Expansion
Global anti-money laundering and anti-terrorism financing body FATF on Thursday released its much-awaited mutual evaluation report on India. It said the country’s systems are “effective” but “major improvements” are needed to strengthen prosecution in these cases.
This 368-page report was released by the Paris-headquartered organization FATF (Financial Action Task Force) after the adoption of the said evaluation in the plenary meeting in June. The last review of India’s system to combat money laundering and terrorist financing was published in 2010.
The report, which comes after FATF experts visited India in November last year, has placed the country in the “regular follow-up” category, a position held by only four other G20 countries. India’s next assessment will be in 2031. The report says India has implemented anti-money laundering (AML) and countering the financing of terrorism (CFT) systems that are effective in many respects.
However, it said “major reforms” were needed to strengthen prosecutions in cases of money laundering and terrorism financing. It said the system also needed to be improved to protect the non-profit sector from terrorist abuse.
“The main source of money laundering in India is generated from illicit activities within the country,” the report said. It also said the country faces a variety of terrorist threats, the most prominent of which is ISIL (Islamic State or ISIS) or al-Qaeda-linked groups operating in and around Jammu and Kashmir.
The report analyses the level of compliance with the 40 FATF recommendations and the effectiveness of India’s AML/CFT system. The report makes recommendations on how the system can be strengthened.