What Is FATF

What is FATF
The Financial Action Task Force (FATF) is an inter-governmental body decision-making body. It was
established in 1989 during the G7 Summit in Paris to develop policies against money laundering. It is a
“policy-making body” which works to generate the political will to bring about national legislative and
regulatory reforms in money laundering. It has also started dealing with virtual currencies. The FATF
Secretariat is located in Paris.
What is the objective of FATF?
FATF sets standards and promotes effective implementation of:
a. legal, regulatory and operational measures for combating money laundering.
b. The FATF works to identify national-level vulnerabilities with the aim of protecting the international
financial system from misuse.
How many members are there in FATF?
As of 2019, FATF consists of thirty-seven member jurisdictions.
Is India a member of the Financial Action Task Force?
India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership.
On June 25, 2010 India was taken in as the 34th country member of FATF.
FATF on terror financing
FATF's role in combating terror financing became prominent after the 9/11 terror attacks in the US. In 2001
its mandate expanded to include terrorism financing. Financing of terrorism involves providing money or
financial support to terrorists. As of 2019, FATF has blacklisted North Korea and Iran over terror financing.
Twelve countries are in the grey list, namely: Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan,
Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
What as FATF 'grey list' and 'blacklist'?
FATF has 2 types of lists:
a. Black List: Countries knowns 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.
b. 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.
FATF & Pakistan
Pakistan has been in the FATF grey list since June 2018 and has been asked to implement the FATF Action
Plan fully by September 2019. It was in the same category from 2012 to 2015 too. Pakistan's inclusion in the
grey list can be attributed to the fact that the country's anti-terror laws are still not in line with FATF
standards and also with the latest UN resolution 2462 that pitches for criminalising terrorist financing. What
Pakistan has mostly done in the past is detain both Masood Azhar and Hafiz Saeed for 'apprehension' of
breach of peace. The FATF seeks freezing of funds, denial of weapons access and travel ban.
While there were some arrests of LeT, JeM, JuD cadres, they were all apprehended under the country's
Maintenance of Public Order Act and not the Anti-Terrorism Act, 1997.
Consequences of being in the FATF grey list:
Considered in the grey list may face
1. Economic sanctions from IMF, World Bank, ADB
2. Problem in getting loans from IMF, World Bank, ADB and other countries
3. Reduction in international trade
4. International boycott
FATF President address:
In a statement issued after the plenary session concluded, the financial watchdog said: "To date, Pakistan has
made progress across all action plan items and has now largely addressed 21 of the 27 action items. As all
action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by
February 2021."
The statement added that Pakistan needed to work on four areas to "address its strategic deficiencies".
These include:
 demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest
range of terror financing activity, which target designated persons and entities, and those who act on
the behalf/direction of the designated persons or entities
 demonstrating that terror financing prosecutions result in effective, proportionate and dissuasive
sanctions
 demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373
designated terrorists and those acting for or on their behalf; preventing the raising and moving of
funds including in relation to non-profit organisations; identifying and freezing assets; and
prohibiting access to funds and financial services
 demonstrating enforcement against violation of terror financing sanctions, including in relation to
NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on
enforcement cases
“We urge Pakistan to implement remaining six items out of 27 action plan, then our onsite team will visit to
verify progress on ground before excluding Pakistan from grey list,” he added
Foreign Minister Shah Mehmood Qureshi

Foreign Minister Shah Mehmood Qureshi on Friday said India's plans to "push Pakistan into the blacklist" of
the FATF will fail because of the steps the country has taken to meet the requirements of the global money
laundering and terrorist financing watchdog.
He was speaking to reporters in Islamabad, hours before the FATF announced its decision.
"I can say this with confidence, India will fail in its designs to push Pakistan into the blacklist," Qureshi said,
adding that the world had "acknowledged" today that the incumbent government and parliament had taken
"concrete steps" regarding the FATF action plan.

What Is FATF

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What Is FATF

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What is FATF

What is the objective of FATF?

FATF sets standards and promotes effective implementation of:

a. legal, regulatory and operational measures for combating money laundering.

How many members are there in FATF?

As of 2019, FATF consists of thirty-seven member jurisdictions.

Is India a member of the Financial Action Task Force?

FATF on terror financing

What as FATF 'grey list' and 'blacklist'?

FATF has 2 types of lists:

FATF & Pakistan

Consequences of being in the FATF grey list:

Considered in the grey list may face

1. Economic sanctions from IMF, World Bank, ADB

3. Reduction in international trade

FATF President address:

Foreign Minister Shah Mehmood Qureshi

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