Financial Action Task Force (FATF)

• 18 Nov 2023

Recently, a Financial Action Task Force (FATF) team arrived in India to evaluate the implementation of the required legal framework against money-laundering and terrorist financing.

Key Points

• The Financial Action Task Force (FATF) is an intergovernmental organization which leads global action to tackle money laundering, terrorist and proliferation financing.
• FATF was established in 1989 by the G7 to examine and develop measures to combat money laundering. It originally included the G7 countries, the European Commission and eight other countries. In 2001, the FATF expanded its mandate to also combat terrorist financing.
• FATF has 40 members including India. Indonesia has become a recent member of FATF.
• It has the authority to issue warnings and sanctions against countries that fail to comply with its standards, such as suspension of membership and blacklisting.
• FATF Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put on the Blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
• As of October 2023 North Korea,Iran and Myanmar are in the Blacklist.
• FATF Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering are put in the FATF Grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
• As of October 2023 there are 23 countries in the list including Türkiye, United Arab Emirates and South Africa.