© IE Online Media Services Pvt Ltd
Tags:
Journalism of Courage
Take a look at the essential concepts, terms, and phenomena from the static and current parts of the UPSC-CSE.
Word: FATF
Subject: Important International institutions, agencies, their structure and mandates.
(Relevance: Essential for prelims. High-value point for Indo-Sino-Pakistan relation, terrorism and related issues in GS II and III)
Why is FATF in news?
China is working to get Pakistan off FATF ‘grey list’.
What is the Financial Action Task Force?
The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. It was established in 1989 during the G7 Summit in Paris.
What FATF does?
The FATF has developed the FATF Recommendations, or FATF Standards, which ensure a coordinated global response to prevent organized crime, corruption and terrorism. They help authorities go after the money of criminals dealing with illegal drugs, human trafficking, and other crimes. The FATF also works to stop funding for weapons of mass destruction. It also assesses the strength of a country’s anti-money laundering and anti-terror financing frameworks. It does not go by individual cases.
Where is its headquarters?
Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
Which are the member countries of FATF?
The FATF currently has 39 members including two regional organisations – the European Commission and Gulf Cooperation Council. India is a member of the FATF.
What are the various lists under FATF?
Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. Inclusion in this list means a warning to the country that it may enter the blacklist.
Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly. Iran and Democratic People’s Republic of Korea (DPRK) are under High-risk Jurisdiction or black list.
Why Pakistan is in news due to FATF?
— Pakistan has not implemented the FATF Action Plan fully by September 2019. It is believed that the country’s anti-terror laws are still not in line with FATF standards. Also, Pakistan has failed to adhere to the latest UN resolution 2462 that directs to criminalise terrorist financing.
— It has been on the FATF grey list since June 2018. It was in the same category from 2012 to 2015 too. The FATF seeks freezing of funds, denial of weapons access and travel ban. Consequences of being in the FATF grey list may include- economic sanctions from IMF, World Bank, ADB ; reduction in international trade and international boycott.
Point to ponder: What do you understand by Money Laundering?
( Source: fatf-gafi.org)
