Financial Action Task Force
About Financial Action Task Force (FATF)
- It is an intergovernmental organization that designs and promotes policies and standards to combat financial crime.
- Recommendations of 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 more than 15 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, keen to exit from the grey list of the FATF, is set to introduce new rules relating to anti-money laundering cases and change the prosecution process to meet its remaining tough conditions.
- Pakistan was put on the grey list by the Financial Action Task Force in 2018 and the country has been struggling to come out of it.
View all comments