Terrorism and Challenges Related To It

Back in news: Financial Action Task Force (FATF)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FATF

Mains level : Money laundering and terror financing

Ahead of the crucial FATF meetings in October, Indian agencies plan to highlight its inaction in the Pulwama, 26/11 Mumbai attack and Daniel Pearl murder cases.

Practice question for mains:

Q.What is FATF? Discuss its role in combating global financial crimes and terror financing.

What is the FATF?

  • FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
  • The FATF Secretariat is housed at the OECD headquarters in Paris.
  • It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.

Why is Pakistan under its scanner?

  • Pakistan has been under the FATF’s scanner since June 2018, when it was put on the Grey List for terror financing and money laundering risks.
  • FATF and its partners such as the Asia Pacific Group (APG) are reviewing Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
  • In June 2018, Pakistan gave a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime, and to address its strategic counter-terrorism financing-related deficiencies.
  • Pakistan and the FATF then agreed on the monitoring of 27 indicators under a 10-point action plan, with specific deadlines.
  • The understanding was that the successful implementation of the action plan, and its physical verification by the APG, would lead the FATF to move Pakistan out of the Grey List.
  • However, Islamabad managed to satisfy the global watchdog over just five of them.
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