Financial Action Task Force
Why in News?
The Financial Action Task Force (FATF) is in the news because India has been elected to assume the Vice-Presidency of the FATF for the first time in history. Indian official Vivek Aggarwal (Union Culture Secretary) will serve in this highly coveted governance role for the July 2026 to June 2027 term.
Basic Information & Origin
- Establishment: Founded in 1989 during the G7 Summit held in Paris, France.
- Headquarters: Located at the OECD headquarters in Paris, France.
- Nature: An autonomous, intergovernmental standard-setting body.
- The Global Watchdog: Functions as the premier international watchdog for financial integrity.
Mandate & Objectives
- Initial Focus: Launched strictly to study and combat Money Laundering (AML).
- Mandate Expansion (2001): Expanded to tackle Terrorist Financing (CFT) following the 9/11 attacks.
- Mandate Expansion (2012): Added efforts to counter the financing of Weapons of Mass Destruction (WMD) proliferation.
- Policy Making: Creates national-level legislative frameworks to safeguard the global financial system.
FATF Lists (The Monitoring Mechanism)
- The Grey List: Officially known as Jurisdictions under Increased Monitoring.
- Grey List Meaning: Countries actively working with FATF to fix strategic deficiencies in their financial system.
- The Black List: Officially known as High-Risk Jurisdictions subject to a Call for Action.
- Black List Meaning: Countries with severe strategic gaps that face economic countermeasures and strict financial sanctions.
- Plenary Sessions: The decision-making body meets three times a year to review and update these lists.
Structure & Membership
- Total Members: Comprises 40 members, including 38 countries and 2 regional organizations.
- Regional Bodies: The two member blocs are the European Commission and the Gulf Cooperation Council.
- Global Footprint: Over 200 jurisdictions globally are committed to implementing FATF standards.
- The 40 Recommendations: Operates based on a foundational list of 40 specific standards to fight financial crimes.
India and the FATF
- Observer Status: India initially joined the network as an observer country in 2006.
- Full Membership: Admitted as the 34th full member of the FATF in June 2010.
- Regional Alliances: India is also a part of FATF-style regional groups, including the Asia-Pacific Group (APG).
- Domestic Laws: India enforces FATF compliance using the Prevention of Money Laundering Act (PMLA), 2002 and the Unlawful Activities (Prevention) Act (UAPA), 1967.
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