Background and Establishment
The Financial Action Task Force (FATF) was established in 1989 at the initiative of the G-7 summit in Paris as a global watchdog for financial integrity. Originally focused on combating money laundering, its mandate expanded over the years:
- 2001: Inclusion of terrorist financing
- 2012: Addition of financing of Weapons of Mass Destruction (WMD) proliferation
Governance Structure
- Membership: FATF has 40 members
- Global Reach: More than 200 jurisdictions are committed to FATF recommendations through FATF-style regional bodies (FSRBs)
- Meetings: The FATF Plenary meets three times a year
- Enforcement Powers: Can place non-compliant countries under:
- Grey List: Increased monitoring
- Black List: High-risk jurisdictions
India's FATF Journey
| Year | Milestone |
|---|---|
| 2006 | Became Observer at FATF |
| June 2010 | Admitted as 34th member |
| 2026-2027 | First Vice-Presidency term |
India's Legislative Framework
India has implemented robust risk-based legislative frameworks:
- Prevention of Money Laundering Act (PMLA), 2002
- Unlawful Activities (Prevention) Act (UAPA), 1967
Significance of India's Vice-Presidency
- Landmark recognition of India's credibility in global financial integrity
- Strengthens prospects for assuming FATF Presidency in the future
- Vice-President assists President in steering the organisation's work
- FATF Presidency runs for a two-year term
Key Terms
- FATF: Inter-governmental body setting international standards for combating money laundering and terror financing
- Grey List: Countries under increased monitoring for strategic deficiencies
- Black List: High-risk jurisdictions requiring enhanced due diligence
- FSRBs: FATF-Style Regional Bodies that promote FATF standards globally