About Financial Action Task Force (FATF):

• It is an intergovernmental organization that designs and promotes policies and standards to combat financial crime.
• Recommendations of created by the FATF target
  • Money laundering
  • Terrorist financing
  • Other threats to the global financial system
• The FATF was created in 1989 by the G7 countries, and is headquartered in Paris.
• There are 37 members, including India and two regional organisations – European Commission and the Gulf Cooperation Council.

Grey list FATF:

• Member countries that have deficiencies in their anti-money laundering and counter terrorist financing (AML/CTF) regimes but they commit to an action plan to address these loopholes.
• Currently, there are 18 countries on the grey list, including Mauritius and Pakistan.

Black list FATF:

• Member countries that have deficiencies in their anti-money laundering and counter terrorist financing (AML/CTF) regimes and do not end up doing enough.
• As of now there are only two countries in the blacklist — Iran and North Korea.
• While greylist includes countries which are considered as safe havens for supporting terror funding and money laundering, blacklisting will mean severe strictures on the countries banks and credit rating, as well as access to loans and foreign investments.
• Pakistan has been under the FATF’s scanner since 2018, when it was put on the greylist for terror financing and money laundering risks.

Why in News?

• Pakistan received another extension on the “greylist”, as the FATF plenary session decided to continue all countries under scrutiny for Terror Financing and Money Laundering until October 2020, owing to the Coronavirus pandemic.
• At the FATF plenary, held through video conferencing, Pakistan was due for a decision on whether it would be kept on the “greylist” or downgraded to the blacklist for failing to meet the FATF’s 27-point action plan on anti-money laundering and counter terrorist financing (AML/CTF) measures.

Money Laundering and the Illegal Wildlife Trade Report

• FATF has released its first global report on the illegal wildlife trade titled “Money Laundering and the Illegal Wildlife Trade”. 

Highlights of the report

• In its report, the FATF has described illegal wildlife trade as a “global threat”, which also has links with other organised crimes like modern slavery, drug trafficking and arms trade.
• The illegal trade is estimated to generate revenues of up to $23 billion a year. The report says a financial probe is key to dismantling the syndicates involved, which can in turn significantly impact the associated criminal activities.
• The study has highlighted the growing role of online marketplaces and mobile and social media-based payments to facilitate movement of proceeds warranting a coordinated response from government bodies, the private sector and the civil society.
• According to the 2016 UN World Wildlife Crime report, criminals are illegally trading products derived from over 7,000 species of wild animals and plants across the world.