India passes anti-money laundering review despite concerns

A GLOBAL anti-money laundering watchdog said India largely complied with its rules, although the country needs to do more to beef up its supervision of preventative measures in some non-financial sectors.

The Financial Action Task Force (FATF) adopted a mutual evaluation report on India, which assesses the “effectiveness of India’s measures to combat money laundering, terrorist financing and proliferation financing”, the agency said on Friday (Jun 28).

India has reached a “high level of technical compliance” with the FATF’s requirements, the Paris-based agency said. The nation is achieving good results when it comes to money laundering and terrorism financial risk understanding, international cooperation and depriving criminals of their assets and counter-proliferation financing measures, it added.

The assessment comes against the backdrop of criticism from non-governmental organisations (NGOs), who say Prime Minister Narendra Modi’s government has misused counter-terrorism laws over the years to target them and policy think tanks such as Amnesty International and Greenpeace.

The FATF said India needs to ensure it is implementing counter-terrorism financing measures in the non-profit sector using a “risk-based approach”.

A team from the FATF visited India in November and met with representatives from several non-profit organisations to understand their concerns. The FATF said on Friday it will release a detailed report on India after it completes its quality and consistency review.

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India’s Ministry of Finance said the FATF’s assessment provides “significant advantages” for the economy. “Good ratings will lead to better access to global financial markets and institutions and increase investor confidence,” it said. 

The FATF places countries with weak terrorist financing and money laundering provisions on their “gray” or “black” list – which can restrict a country’s international borrowing capabilities. India is a member of the FATF, comprising major economies such as the US, Japan, France, the European Union and China.