FM endorse the Paris-based Financial Action Task Force’s strategic priorities for the years 2022-24

FM endorse the Paris-based Financial Action Task Force’s strategic priorities for the years 2022-24

Subject: International Relations

Section: IR

Context:

The Strategic Priorities for the FATF for 2022-24 are:

• Strengthen the FATF Global Network, FATF systems of Mutual Evaluations, Enhance International Beneficial Ownership Transparency, Increase Capabilities to more effectively recover Criminal assets, Leverage Digital Transformation, Ensure Sustainable Funding for FATF Strategic priorities
• FATF on Beneficial Ownership Transparency, the role of FATF global network in safeguarding global financial system.
• The Spring Meetings of the International Monetary Fund (IMF) and the Boards of Governors of the World Bank Group (WBG) bring together central bankers, ministers of finance and development, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness

Concept:

Financial Action Task Force

• It is an inter-governmental body established in 1989 during the G7 Summit in Paris.
• The FATF assesses the strength of a country’s anti-money laundering and anti-terror financing frameworks, however it does not go by individual cases.
• The FATF Plenary is the decision making body of the FATF. It meets three times per year.
• Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
• The FATF currently has 39 members including two regional organisations — the European Commission and Gulf Cooperation Council. India is a member of the FATF.

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.

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.

The Paris-based FATF has placed Pakistan on its grey list since June 2018 for failing to check money laundering, leading to terror financing, and was given a plan of action to complete it by October 2019. Since then, Pakistan continues to be on the FATF’s list due to its failure to comply with the FATF mandates.