India Confronts Serious Terrorism and Terrorist Financing Threats from Al Qaeda, Highlights FATF
The Financial Action Task Force (FATF), the global watchdog for money laundering and terrorist financing, recently spotlighted India’s substantial efforts to combat illicit finances. Despite this praise, the FATF raised alarms about the significant threats India faces from terrorism and terrorist financing, including dangers stemming from ISIL or Al Qaeda.
In a statement, the FATF appreciated India for its high level of technical compliance with its recommendations and recognized the significant steps India has taken to implement measures against illicit finance. “India achieved a high level of technical compliance across the FATF Recommendations and has taken significant steps to implement measures to tackle illicit finance. Nevertheless, India needs to continue to improve its system as its economy & financial system continue to grow,” the FATF expressed.
The joint report by FATF with the Asia/Pacific Group on Money Laundering (APG) and the Eurasian Group (EAG) further commended India for its effective anti-money laundering and counter-terrorist financing (AML/CFT) framework, which has yielded good outcomes in risk understanding, access to beneficial ownership information, and depriving criminals of their assets.
Moreover, the report highlighted the proficient use of financial intelligence by Indian authorities and their effective cooperation both domestically and internationally. Nevertheless, the FATF underscored the necessity for India to enhance its focus on concluding prosecutions and imposing suitable sanctions on terrorist financiers.
“India faces serious terrorism and terrorist financing threats, including related to ISIL or Al Qaeda. India has a strong emphasis on disruption and prevention and has demonstrated its ability to conduct complex financial investigations. Still, the country must continue to improve its system as its economy and financial system grow, ensuring that money laundering and terrorist financing trials are completed and offenders are subject to appropriate sanctions,” the FATF report elaborated.
Addressing the complexities of India’s rapidly growing economy and financial system, the FATF pointed out the need for India to manage the risks related to money laundering emanating from illegal activities within its borders. These risks primarily concern fraud, including cyber-enabled fraud, corruption, and drug trafficking.
The FATF report also lauded India’s strides in financial inclusion, highlighting the doubling in the proportion of the population holding bank accounts, the promotion of digital payment systems, and the application of simplified due diligence for small accounts. Such efforts have enhanced financial transparency, contributing significantly to AML/CFT activities.
Despite the challenges the FATF report outlines, it notes that Indian authorities exhibit effective cooperation and coordination on issues relating to illicit financial flows. Furthermore, India has achieved notable successes in international cooperation, asset recovery, and the implementation of targeted financial sanctions for proliferation financing.
The report concludes with the acknowledgment that while India possesses a comprehensive understanding of money laundering, terrorism, and proliferation financing risks, there is a need for broader sharing of insights on these risks among all relevant stakeholders.
In response to the assessment, India is placed in “regular follow-up” and, in accordance with procedures, will report back to the Plenary in three years, indicating ongoing engagement with FATF protocols and an enduring commitment to addressing and mitigating the threats of money laundering and terrorist financing.
