New Delhi: The Financial Action Task Force (FATF) on Thursday its report on India's mutual evaluation on combating terror financing and anti-money laundering regime. The report, titled- "India's measures to combat money laundering and terrorist financing"- praised India's action and underscored New Delhi has implemented an anti-money laundering and combating terror financing system that is effective in many respects.
"A joint FATF-APG-EAG assessment of the country’s measures to tackle illicit Finance concludes that India has implemented an anti-money laundering and counter-terrorist financing (AML/CFT) framework that is achieving good results, including on risk understanding, access to beneficial ownership information and depriving criminals of their assets. Authorities make good use of financial intelligence and co-operate effectively, both domestically and internationally," according to the report.
However, it stressed that major improvements are needed to strengthen prosecution in the money-laundering and terror financing cases. The FATF, the global financial crime watchdog, said India's improvements are required to protect the non-profit sector from terror abuse. The observation was made in a ‘mutual evaluation report’ released by FATF on combating terror financing and anti-money laundering regimes. "India's main sources of money laundering originate from within, from illegal activities committed within the country," the FATF report said.
Al-Qaeda-linked groups active in J-K: FATF
It highlights that the country is facing serious terrorism and terrorist financing threats, including those related to ISIL or Al Qaeda. The report, especially, stressed the Al-Qaeda-linked groups active in Jammu and Kashmir. The significant report came at a time when several regions of Jammu that were earlier marked as safe areas, witnessed multiple attacks in the past few months.
"India has a strong emphasis on disruption and prevention and has demonstrated its ability to conduct complex financial investigations. However, India needs to focus on concluding the prosecutions and convict and appropriately sanction terrorist financiers," it said.
The report noted the risks relate primarily to fraud, including cyber-enabled fraud, corruption and drug trafficking. The global watchdog underscored that India pursues money laundering related to fraud and forgery in line with predicate crime risks to a large extent, but "less so with some other offences such as human trafficking and drug trafficking". It suggested New Delhi address the backlog of money laundering cases pending the conclusion of court processes.
Significant improvement in financial inclusion: FATF
The FATF, in its latest report published on September 19, noted that the country has made significant steps in financial inclusion, more than doubling the proportion of the population with bank accounts, encouraging greater reliance on digital payment systems, and making use of simplified due diligence for small accounts. "These efforts have supported financial transparency, which in turn contribute to AML/CFT efforts," read the report.
Later in the report, it acknowledged that India, being the most populous country, and has institutional complexity, the authorities cooperate and coordinate effectively on matters dealing with illicit financial flows, including the use of financial intelligence. "India also achieved positive results in international cooperation, asset recovery and implementing targeted financial sanctions for proliferation financing," it said.
Also Read: FATF adopts India's mutual evaluation report, lauds efforts in tackling money laundering
