FATF clears India during mutual evaluation; no red flags: Officials

FATF clears India during mutual evaluation; no red flags: Officials

The Financial Action Task Force (FATF), in its plenary currently being held in Singapore, is learnt to have adopted the mutual evaluation report on India while finding it “compliant” on money laundering and terror funding measures, people familiar with the development said on Friday.

“The intergovernmental organisation, that sets international anti-money laundering standards and counter-terrorist financing measures, has not found any red flags in India’s processes,” said an officer, who didn’t want to be named.

The decision comes after a year-long process, during which a FATF team had visited New Delhi for an on site evaluation of the country’s measures and met senior officials.

As reported by HT, an Indian delegation also visited Singapore in April to apprise the FATF about steps taken to counter money laundering and terror financing over the past decade.

The Indian team comprising officials from the Enforcement Directorate (ED), income-tax department, Central Bureau of Investigation (CBI), Directorate of Revenue Intelligence (DRI), and the finance and external affairs ministries visited Singapore in April for face-to-face consultations on the evaluation.

The mutual evaluation report will be released on Friday evening, said officials. New Delhi underwent such a review last in 2010 and is already in the compliant category.

The mutual evaluation of India was scheduled for September 2020, but was delayed because of the pandemic.

Officials said that Indian government had apprised the FATF and peers about notable amendments in the Prevention of Money Laundering Act (PMLA), registration of more than 5,000 money laundering cases in the past 10 years, the arrest of 755 individuals and attachment of properties worth more than ₹1.21 lakh crore.

A key change since the last review has been defining a “politically exposed person” under the PMLA, which was recommended by the FATF.

Besides, the Indian government has widened the ambit of PMLA to bring non-government organisations and crypto currencies under it, so that illicit financial transactions through virtual digital assets (VDAs) can be monitored.

The Reserve Bank of India (RBI) has also stepped up scrutiny of fintech firms to ensure they are following the provisions of the anti-money laundering law, and it is keeping tabs on suspicious transactions, officials said.

The government also enacted a new law in 2018 to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of local courts.

The Fugitive Economic Offenders Act, 2018, empowers authorities for non-conviction-based attachment and confiscation of assets and proceeds of crime abroad in cases involving amounts above ₹100 crore.

The FATF conducts peer reviews of each member country to assess the implementation of its recommendations and provides an in-depth description and analysis of each country’s system.

In 2019, the Indian government set up a joint working group comprising 22 central investigation, intelligence and regulatory agencies to make presentations, hold discussions with, and brief the FATF experts.

The agencies involved in the process include the ED, the income-tax department, DRI, CBI, Financial Intelligence Unit, Customs, market regulator Securities and Exchange Board of India, banking regulator RBI and Insurance Regulatory and Development Authority of India.

Over the past few years, the ED has aggressively gone after businessmen, politicians and companies involved in money laundering by violating the rules laid down by the government and regulatory authorities, even as provisions of the PMLA have been described by many political parties, lawyers and businessman as “draconian”.

The courts have, however, upheld most of its arrests and prosecution complaints that are equivalent to charge sheets.

Read more news like this on HindustanTimes.com