Financial Action Task Force

IN NEWS:

• The FATF's virtual plenary meet will be held on June 24, which will also be attended by the officials from India.

ABOUT THE FINANCIAL ACTION TASK FORCE:

• Formation: The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 during the G7 Summit in Paris.
• 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.
• Secretariat: Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
• Member Countries: The FATF currently has 39 members including 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.
• The recommendation by the ICRG is a precursor to the final decision at the FATF plenary session, and is usually not overturned.
• The FATF Plenary is the decision-making body of the FATF. It meets three times per year.

PRELIMS QUESTION:

Q. Consider the following statements regarding Financial action task force (FATF):

1. It was established under the leadership of G7 countries.
2. India is a member of FATF.

Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer to Prelims question