Context:
The Financial Action Task Force (FATF) has released a new “Asset Recovery Guidance and Best Practices” framework. It strengthens global mechanisms for the recovery of assets derived from financial crimes such as money laundering and corruption.
UPSC Relevance:
International Organisation
UPSC PYQ:
Q. Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels. (2021)
About FATF:
- The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society.
- As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
- The FATF was established in 1989 and is based in Paris.
The 40-member body sets international standards to ensure national authorities can effectively go after illicit funds linked to drugs trafficking, the illicit arms trade, cyber fraud and other serious crimes.
- The FATF’s decision-making body, the FATF Plenary, meets three times per year and holds countries to account if they do not comply with the Standards.
- If a country repeatedly fails to implement FATF Standards then it can be named a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction. These are often externally referred to as “the grey and black lists”.
* FATF suspended membership of the Russian Federation on 24 February 2023.
Members:
Grey and Black Lists of the FATF?
- Grey List: The Grey List includes countries that are considered safe haven for supporting terror funding and money laundering.
- Black List: The Black List includes Non-Cooperative Countries or Territories (NCCTs) that support terror funding and money laundering activities.
- As of now, Iran, North Korea and Myanmar are the three black listed countries.
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