All About FATF
About:
- The Financial Action Task Force is the international organisation in charge of keeping an eye on money laundering and terrorism financing (FATF).
- The intergovernmental organisation establishes international standards with the goal of halting these illegal behaviours and the harm they do to society.
- In its function as a policy-making body, the FATF attempts to develop the necessary political will to bring about these kinds of national legislative and regulatory reforms.
- In order to ensure a coordinated international response to combat terrorism, organised crime, and corruption, the FATF has developed the FATF Recommendations, often known as FATF Standards.
- They assist law enforcement in finding the money that criminals use to commit crimes including selling illegal narcotics and human trafficking.
- The FATF works to stop the funding of WMDs, including nuclear weapons.
Among FATF’s obligations:
- The FATF is constantly revising its regulations to address new dangers, such as the regulation of virtual assets, which has become more important as cryptocurrencies become more popular. The FATF also examines techniques for financing terrorism and money laundering.
- By checking on the full and effective application of the FATF Standards, the FATF holds non-compliant countries accountable.
There is a long history behind the Financial Action Task Force (FATF):
- In response to growing concerns about the practise, the G-7 Summit in Paris in 1989 established the Financial Action Task Force on Money Laundering.
- After realising the threat to the banking system and financial institutions, the G-7 Heads of State or Government and the President of the European Commission convened a meeting to create the Task Force, which included representatives from the G-7 member states, the European Commission, and eight additional countries.
Members:
- Between 1991 and 1992, the FATF’s membership rose from its original 16 to 28 members. When the FATF was founded in 2000, there were 31 members; as of today, there are 39.
- The FATF expanded its mandate to include activities to combat both money laundering and terrorism financing after the 9/11 attacks in October 2001.
- In April 2012, it stepped up its attempts to halt the financing of the proliferation of WMDs.
The FATF has the following objectives:
- In order to combat money laundering, funding of terrorism, and other threats to the integrity of the international financial system, it is necessary to give guidance and encourage the effective application of legal, administrative, and operational procedures.
Implementing the FATF Recommendations:
- Examines countermeasures and techniques for preventing money laundering and terrorism funding; promotes global adoption and implementation of FATF recommendations.
- The FATF’s governing body, the FATF Plenary, meets three times annually.
- The majority of the major financial centres throughout the world are represented by the FATF’s 37 member nations and its two regional organisations (the GCC and the European Commission).
- India has been a member of the FATF since 2010.
- India belongs to both the Asia Pacific Group (APG) and the Eurasian Group (EG), two of its regional allies (EAG).
Pakistan:
- Pakistan was initially included in the grey list in 2008 before being removed. After that, it was once more listed from 2012 to 2015.
- Since 2018, it has not been taken from the list.
- The FATF placed Pakistan on its “Grey List” in June 2018, which prompted the publication of the 27-point action plan.
- The action plan attempts to stop money laundering and terrorism financing. A similar action plan was announced in 2019 by the FATF’s regional affiliate, the Asia Pacific Group (APG).
- Effects on the economies of the countries listed by the Financial Action Task Force.
- When the Financial Action Task Force (FATF) places a jurisdiction under heightened surveillance, it means the country has committed to addressing any discovered strategic flaws as soon as possible and within a set time frame.
- Additionally, more surveillance is being used in this nation.
- The nation’s imports, exports, and remittances suffer as a result of greylisting, which also limits its access to international financing.
- The IMF and World Bank are affiliated with FATF as observers, and nations who are on the grey list have difficulty accessing international credit instruments.
