India’s progress on Anti Money Laundering and combating Financing of Terrorism

Source: indiainfoline

India Infoline News Service / 12:52 , Feb 28, 2011

The Financial Action Task Force (FATF)  is an  inter‐governmental policy making  body, comprised of over 30 countries, that has a ministerial mandate to establish international standards for combating money laundering and terrorist financing.  Over 180 jurisdictions have joined the FATF or an FATF‐style regional body, and  committed at the ministerial level to implementing the FATF standards and having  their anti‐money laundering (AML)/counter‐terrorist financing (CFT) systems assessed. The FATF sets international standards to combat money laundering and terrorist financing. It assesses and monitors compliance with the FATF standards, conducts typologies studies of money laundering and terrorist financing methods, trends  and techniques and responds to new and emerging threats, such as proliferation  financing.   India became FATF’s 34 th Member in June 2010. As per the FATF procedure, every  country has to give an Action Plan to bring their AML/CFT regime close to the compliance zone of the FATF. India also gave an Action Plan in June 2010 and  followed up with Action Taken Report in October 2010 and in February 2011. The 2 nd review of India’s Action Taken Report was discussed by the FATF Plenary  on 23 rd February in Paris. The FATF Plenary appreciated the strong commitment demonstrated by India to the international drive against money laundering and  financing of terrorism.  During the meeting, India reiterated its commitments to adopt, enforce and  contribute to international best practices in AML and CFT. India also highlighted  the implementation of the 2010-11 budget announcement relating to the  establishment of a Financial Stability and Development Council that would interalia  review the effective implementation of India’s multilateral commitments including  FATF priorities. In addition, India informed the plenary of the steps taken for the  fulfillment of another budget announcement of 2010-11 relating to the creation of  the high powered Financial Sector Legislative Reforms Commission to look at all the financial sector legislations, regulations and rules with a view to making them synchronous with each other; that would also help India implement its FATF  action plan more effectively.an more effectively.  During the plenary, it was observed that India is on track on fulfilling its  commitment and it was recognized that India is taking all efforts in securing a  more transparent and stable financial system by ensuring that financial institutions  are not vulnerable to infiltration or abuse by organized crime groups. The Union Finance Minister, Shri. Pranab Mukherjee, today approved India taking  over as the co-chair of the Asia Pacific Regional Review Group of the FATF. It is  one of the four FATF International Co-operation Review Groups. The others are:  Europe/Eurasia, Americas, Middle East / Africa. India replaces Australia and the other co-chair is Macau. Through this position, India would send an important  signal of its interest in and commitment to countering  money laundering and  financing of terror both in the region, as well as in terms of the nation’s overall  membership of FATF.  The Asia Pacific Regional Review Group of FATF is tasked with the responsibility of reviewing the  compliance and  actions taken by countries  in this region to meet FATF standards.  The Indian delegation to the FATF Plenary was led by Dr. Thomas Mathew, JS, Capital Markets, Department of Economic Affairs.