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FATF evaluation of India’s anti-money laundering norms put off

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    20th Jul, 2021


An evaluation, by the Financial Action Task Force (FATF), to analyze the effectiveness of India’s anti-money laundering and countering terrorist financing regime has been postponed again, for the second time, because of the pandemic.

About the Financial Action Task Force (FATF) Review

  • The FATF conducts “peer reviews of each member to assess levels of implementation of the FATF recommendations.
  • It provides an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.”
  • The last such review of India was held in June 2010 and it is usually taken up again after 10 years.

Initiatives by the Indian government against money laundering

  • Guidelines and rules under the Prevention of Money Laundering Act (PMLA), 2001
  • Know Your Customer (KYC) procedures
  • Fugitive Economic Offenders Act in 2018
  • Anti-black money Act, 2015
  • Foreign Exchange Regulation Act (FERA), 1973
  • Foreign Exchange Management Act (FEMA) in 1999
  • Indian Customs Act, 1962
  • Smugglers and Foreign Exchange Manipulators Forfeiture of Property Act, 1975
  • Foreign Contribution (Regulation) Act, 1976
  • The promulgation of the Prevention of Terrorism Act (POTA), 2002
  • India is a signatory to the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna Convention).

Financial Action Task Force (FATF)

  • The Financial Action Task Force (FATF) is aninter-governmental financial watchdog.
  • It develops and promotes policies to combat money laundering and financing of terrorism.
  • It is consisting of 39 countries with major financial centers in Europe, North and South America, and Asia and two international organizations have proposed a set of 40 recommendations to combat money laundering.
  • FATF has developed the FATF Recommendationsor FATF Standards, which ensure a coordinated global response to prevent organized crime, corruption, and terrorism.
  • On June 25, 2010, India became the 34th country member of FATF.