FATF likely to carry out evaluation of India’s mechanism to deal with financial crimes this year

The FATF, the global body against money laundering and terror financing, is likely to carry out an evaluation of India’s established mechanism to deal with such financial crimes later this year.

The mutual evaluation of country specific anti-money laundering and terror-financing mechanism by the Financial Action Task Force (FATF) is a routine ongoing process and is being conducted on all member countries of the global body on a rotational basis.

The routine process of evaluation of India’s established mechanism against financial crimes by the FATF is likely to be carried out later this year, a government official privy to the matter said.

The Centre has also written to Jammu and Kashmir and Punjab to nominate one IGP-rank officer each, and Gujarat has been asked to nominate a DIG-rank officer to prepare the ground work for the proposed evaluation of the country’s anti-money laundering regime and legal measures to check financial crimes.

The selected officers, belonging to the Indian Police Service (IPS), should have expertise on the subject.

The Department of Revenue, under the Ministry of Finance, and the Intelligence Bureau, under the Ministry of Home Affairs, will coordinate the whole process, which is expected to take several months.

The officers nominated by the states will be required to undergo training, participate in interviews, aid the FATF during on-site visits and demonstrate the effectiveness of India’s fight against terror.

Officers from the Enforcement Directorate (ED) and the National Investigation Agency (NIA) will also be part of the Indian team.

The mutual evaluation of India’s anti-money laundering and terror-financing mechanism was slated to start last year but got delayed due to the COVID-19 pandemic.

The mutual evaluation will be conducted by the FATF’s Asia Pacific Group.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terror financing and other related threats to the integrity of the international financial system.

It currently has 39 members, including two regional organisations — the European Commission and the Gulf Cooperation Council.

India is a member of the FATF consultations and its Asia Pacific Group.

Pakistan continues to remain on the “Grey List” of the FATF as the global body has found “serious deficiencies” on the part of the neighbouring country in checking terror financing and also that “it lacks an effective system” to deal with it.

Pakistan has been on the “Grey List” of the FATF since 2018.