Paris: The global Financial Action Task Force (FATF) commended Indian authorities on Thursday for demonstrating a “good understanding” of current and emerging Terrorist Financing (TF) threats and risks in the country’s various risk theatres and for conducting investigations in accordance with the risks that were identified.
“Case studies provided reflect India’s ability, in particular the National Investigative Agency (NIA) and ED, to conduct complex financial investigation and identify money trails to support the investigation and prosecution of terrorist activity and TF,” the independent inter-governmental body said on Thursday while releasing its Mutual Evaluation Report.
The FATF develops and promotes policies to protect the global financial system against money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. The FATF recommendations are recognised as the global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) standard.
The Mutual Evaluation Report commended India for achieving a “high level of technical compliance” across its recommendations and taking “significant steps” to implement measures to tackle illicit finance.
The joint FATF-APG-EAG assessment of India’s measures to tackle illicit finance concludes that India has implemented an AML/CFT framework that is achieving good results. This includes a strong understanding of risk, access to beneficial ownership information, and effective asset deprivation. The report also acknowledges India’s effective financial intelligence usage and international cooperation, reinforcing India’s global standing in the fight against illicit finance.
The report summarises the AML/CFT measures in place in India. It analyses the level of compliance with the 40 FATF recommendations and the effectiveness of India’s AML/CFT system and provides recommendations on how the system could be strengthened.
The FATF admitted that India faces serious terrorism and terrorist financing threats, “including related to ISIL or Al Qaeda,” acknowledging that terrorist financing risks are generally closely linked with terrorism risks, with flows of funds or provision of other assets constrained to within India or surrounding countries.
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“India faces a disparate range of terrorism threats, categorised into six different theatres. These can be summarised as theatres associated with ISIL or AQ-linked extremist groups active in and around Jammu and Kashmir, whether directly or via proxies or affiliates, as well as other separatist movements in the region; other ISIL and AQ cells, their affiliates, or radicalised individuals in India; regional insurgencies in the Northeast and North of India; and left-wing extremist groups seeking to overthrow the government,” the report detailed.
The most significant terrorism threats, it mentioned, appear to relate to ISIL or AQ-linked groups active in and around Jammu and Kashmir.
At the same time, the FATF acknowledges India’s significant steps in financial inclusion. By 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, India has made significant strides in promoting financial inclusion. This progress should instill a sense of optimism about India’s future in the financial sector.
The report underlines the importance of India’s ongoing commitment to improving its AML/CFT system. As India’s economy and financial system continue to grow, it is critical to ensure that money laundering and terrorist financing trials are completed and offenders are subject to appropriate sanctions. This call to action should motivate all stakeholders to continue their efforts in combating financial crimes.
“India’s main money laundering risks originate from illegal activities within the country, these risks relate primarily to fraud, including cyber-enabled fraud, corruption and drug trafficking. 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. The country needs to address the backlog of money laundering cases pending the conclusion of court processes,” the report stated.
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–IANS
