India’s Financial Evaluation Report by FATF to be Released on September 19
The Financial Action Task Force (FATF) will release India’s Mutual Evaluation Report (MER) on September 19. India, which became a member of FATF in 2010, underwent its evaluation in June 2024. The evaluation concluded that India has achieved a high level of technical compliance with FATF requirements.
FATF, established in 1989, is a global watchdog for money laundering and terrorist financing. India’s positive evaluation will enhance its credibility and reputation as a financially stable and secure nation, making it more attractive for investment. It will also improve access to international markets, lower borrowing costs, and foster better cooperation with other countries in areas like countering terrorist financing, asset recovery, and law enforcement.
To be placed in the ‘regular follow-up’ category, a country needs to achieve higher ratings in at least 33 out of 40 recommendations and 5 out of 11 immediate outcomes. India joined the ‘regular follow-up’ category in June, alongside countries like the UK, France, and Italy.
FATF currently has 39 members, with Russia’s membership suspended in February 2023. As of June 2024, FATF has reviewed 133 countries and publicly identified 108 of them. Of these, 84 have made necessary reforms to address their AML/CFT weaknesses. Currently, North Korea, Iran, and Myanmar are blacklisted, while 21 countries, including Bulgaria, Kenya, and Vietnam, are on the grey list.
Doubts Revealed
FATF -: FATF stands for Financial Action Task Force. It is an international organization that works to combat money laundering and terrorism financing.
Mutual Evaluation Report (MER) -: A Mutual Evaluation Report (MER) is a detailed review of a country’s efforts to combat money laundering and terrorism financing. It checks how well the country follows international standards.
Technical compliance -: Technical compliance means following specific rules and standards. In this context, it means India is following the rules set by FATF very well.
Credibility -: Credibility means being trusted and believed in. When India has high credibility, other countries and investors trust it more.
Investment -: Investment is when people or companies put money into something to make a profit. High credibility can attract more people to invest in India.
International cooperation -: International cooperation means countries working together. High compliance with FATF standards helps India work better with other countries.
1989 -: 1989 is the year when FATF was formed. It has been working since then to fight financial crimes.
39 members -: FATF has 39 member countries. These countries work together to follow and enforce financial rules.
Russia’s membership suspended -: Suspended means temporarily stopped. Russia’s membership in FATF is currently paused.
Blacklisted -: Blacklisted means being put on a list of countries that are not following important rules. North Korea, Iran, and Myanmar are on this list for not following FATF rules.
Grey list -: The grey list is for countries that need to improve their efforts to follow FATF rules. 21 countries are on this list, meaning they have some issues to fix.