India's financial safeguards against money laundering, terror financing win FATF approval
The FATF's brief outcome statement praised India's legal framework in effectively addressing money laundering and terrorist financing. However, it noted the need for the country to expedite the prosecution process for these crimes.
FollowIn a major achievement, the Financial Action Task Force (FATF) has adopted India's Mutual Evaluation Report during its June 2024 Plenary session held in Singapore. The report highlighted New Delhi's significant contributions to combating money laundering and terrorist financing, securing India's place among the top countries with robust safeguards against these financial crimes.
The FATF's brief outcome statement praised India's legal framework in effectively addressing money laundering and terrorist financing. However, it noted the need for the country to expedite the prosecution process for these crimes.
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The Paris-headquartered FATF is a global body dedicated to tackling money laundering, terrorist financing, and proliferation financing.
India has been placed in the 'regular follow-up' category, a distinction shared by only four other G20 countries. The Ministry of Finance highlighted that this recognition would boost investor confidence in India's financial system, enhancing the overall stability and integrity of the economy.
The Ministry attributed this success to a collaborative effort involving multiple stakeholders, including the National Security Coordination Secretariat (NSCS) under the National Security Advisor (NSA).
The adoption of the Mutual Evaluation Report is a significant milestone for India, reflecting its commitment to combating financial crimes and contributing to its economic growth. India's last mutual evaluation of FATF guidelines, which assess the effectiveness of laws and policies to counter financial crimes, was conducted in 2010.
The FATF acknowledged India's efforts in mitigating the risks associated with money laundering and terror financing, including corruption, fraud, and organized crime. It also appreciated India's transition from a cash-based to a digital economy, which has reduced the risks of financial crimes.
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The implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity and stringent regulations on cash transactions have significantly increased financial inclusion and digital transactions, making them more traceable and reducing money laundering and terror financing risks.
"This recognition from the FATF is a testament to the rigorous and effective measures implemented by India over the last 10 years to safeguard its financial system from money laundering and terrorist financing threats," stated the Ministry of Finance in its release.
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