About the Financial Action Task Force (FATF):
- FATF is an inter-governmental policy-making and standard-setting body dedicated to combating money laundering and terrorist financing.
- Objective: To establish international standards and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism.
- It makes recommendations for combating financial crime, reviews members' policies and procedures, and seeks to increase acceptance of anti-money laundering regulations across the globe.
- Formation:
- It was established in 1989 during the G7 Summit in Paris to develop policies against money laundering.
- In 2001, its mandate expanded to include terrorism financing.
- Headquarters: Paris, France.
- Membership:
- FATF members include 39 countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the EU as such.
- India became a member of FATF in 2010.
- FATF, as part of its efforts, maintains two types of lists - the greylist and the blacklist.
- Black List:
- Countries known as Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist.
- These countries support terror funding and money laundering activities.
- The FATF revises the blacklist regularly, adding or deleting entries.
- Grey List:
- Countries that are considered a safe haven for supporting terror funding and money laundering are put on the FATF grey list.
- This inclusion serves as a warning to the country that it may enter the blacklist.
- Three countries, North Korea, Iran, and Myanmar, are currently on FATF’s blacklist.
- Consequences of being on the FATF blacklist:
- No financial aid is given to them by the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB) and the European Union (EU).
- They also face a number of international economic and financial restrictions and sanctions.
