FATF Praises India's Measures To Combat Money Laundering, Terror Financing System

The report, which comes after an on-site visit of FATF experts to India last November, has placed the country in the regular follow-up category.

FATF has placed India in the regular follow-up category.

Source : LinkedIn/FATF

The Financial Action Task Force (FATF) on Thursday launched its evaluation report on India, saying that the country has achieved a high-level of technical compliance across the FATF Recommendations and has taken significant steps to to tackle illicit finance.

It added that New Delhi needs to improve its system as its economy and financial system continue to grow.

The 368-page report was released after the assessment was adopted by the Paris-headquartered body at its June plenary meeting. 

"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," the global watchdog said. 

"Authorities make good use of financial intelligence and co-operate effectively, both domestically and internationally," it added.

The report said that the main money laundering risks in India originate from illegal activities within the country, relating to fraud, like cyber-enabled fraud, corruption and drug trafficking.  

"India faces serious terrorism and terrorist financing threats, including related to ISIL or Al Qaeda. India as a strong emphasis on disruption and prevention and has demonstrated its ability to conduct complex financial investigations," the report said.

The report, which comes after an on-site visit of FATF experts to India last November, has placed the country in the regular follow-up category. It added that the country faced disparate range of terror threats, most significantly from ISIL (Islamic State or ISIS) or AQ-linked groups (Al Qaeda) active in and around Jammu and Kashmir.

It said a sudden rise in terrorist-financing investigations was seen in 2023 and this was attributed to events arising out of incidents in Manipur that led to such probes in more than 50 cases. The FATF said India has suffered from the effects of terrorism consistently since the country achieved independence in 1947.

The last such review of India's combating of money laundering and terror financing regime was published in 2010, while the next evaluation is scheduled in 2031.