What is the Financial Action Task Force(FATF)?

About:

• It is an inter-governmental body established in 1989 during the G7 Summit in Paris.
• Assesses the strength of a country’s anti-money laundering and anti-terror financing frameworks, however, it does not go by individual cases.
• It added efforts to counter the financing of the proliferation of weapons of mass destruction.

Objectives:

• To set standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.

Headquarters:

• Its Secretariat is located at the Organisation for Economic Cooperation and Development(OECD) headquarters in Paris.

Member Countries:

• The FATF currently has 39 membersincluding two regional organisations – the European Commission and Gulf Cooperation Council. India is a member of the FATF.

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.
  • This inclusion serves as 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, adding or deleting entries.
  • Currently, Iran and Democratic People’s Republic of Korea (DPRK) are under High-risk Jurisdiction or black list.

Sessions:

• The FATF Plenary is the decision making bodyof the FATF. It meets three times per year.