New Delhi: In a significant milestone, the Financial Action Task Force has adopted its Mutual Evaluation Report in its June 2024 Plenary session held in Singapore, recognising New Delhi's contributions to combat money laundering and terrorist financing. This is a significant achievement for India that ensures its place in the top category of countries on safeguards against money laundering and terror financing.
In its brief outcome statement, the global body said that India's legal regime in these two domains was achieving good results. However, it said the country needs to address delays relating to concluding money laundering and terrorist financing prosecutions. The Paris-headquartered body leads global action to tackle money laundering, terrorist and proliferation financing.
India has been placed in the 'regular follow-up' category, which is a distinction shared by only four other G20 countries. The Ministry of Finance said this will accrue several benefits to the economy due to investor confidence in India’s overall stability and integrity of the financial system. The Ministry called it a team effort and an example of whole of government approach to issues of national security involving multiple stakeholders including the National Security Coordination Secretariat (NSCS) under the National Security Advisor (NSA).
The adoption of the report marks a significant milestone for India and is greatly advantageous for the economy due to increased investor confidence. India has been included in FATF's 'regular follow-up' category, a distinction shared by only four other G20 countries.
FATF recognises India's contributions in anti-money laundering
India's mutual evaluation of FATF guidelines, a measure that checks a country's efficacy in making effective laws and policies and implementing them to check financial crimes, was last done in 2010. The adoption of its mutual report is a significant milestone in combating money laundering and terror financing as well as contributing to India's growing economy.
The FATF recognised India's efforts in mitigating the risks arising from money laundering and terror financing, including the laundering of proceeds from corruption, fraud, and organised crime. It also appreciated effective measures implemented by India to transition from a cash-based to a digital economy to reduce the risks of such crime.
It also recognised the implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent regulations on cash transactions, has led to a significant increase in financial inclusion and digital transactions; these measures have made transactions more traceable, thereby mitigating money laundering and terror financing risks and enhancing financial inclusion.
"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 ML/TF threats. It underscores the country’s commitment to international standards and its proactive stance in the global fight against financial crimes," said the Ministry of Finance in its release.
How India has dismantled terror networks?
Since 2014, India has enacted a series of legislative changes and bolstered enforcement efforts to tackle money laundering, terror financing and black money. Indian authorities have had success in dismantling the terror funding network using actionable intelligence inputs, stopping the flow of terror funding, black money and narcotics
Over a two-year period, the Department of Revenue (DoR) spearheaded India's engagement with FATF during the mutual evaluation process. An FATF peer review of India ended early this year after the team made an 'on-site' or a physical visit to New Delhi and met officials from various intelligence and investigative agencies.
"This sets a benchmark for countries in our region to effectively implement international standards on terrorist financing. India’s excellent rating will enhance the capacity of our country to lead the global effort on countering cross-border terror financing and money laundering," it added.
(with PTI inputs)
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