🔆 India & FATF: Securing Finances, Combating Terror Networks

📍 India’s evolving role in the Financial Action Task Force (FATF) highlights its commitment to combating money laundering, terror financing & proliferation risks.

✅ FATF Membership: India became a full FATF member in 2010, enhancing its global credibility in financial security and anti-terror frameworks.
✅ 2024 Mutual Evaluation Report: Recognizes India’s robust framework for investigating terror finance, but flags challenges in proliferation financing (PF) & sanction evasion.
✅ National Risk Assessment (NRA): Periodic NRA exercises help assess ML/TF vulnerabilities and guide reforms in financial & enforcement sectors.
✅ Focus Areas:
• Better detection of PF-related sanction evasion schemes
• Strengthening of FIU-India, regulatory bodies, and cross-border intelligence sharing
✅ Good Practices:
• Use of AI-driven suspicious transaction reporting
• Tighter Know Your Customer (KYC) norms and cross-institution collaboration
✅ International Coordination: India contributes to FATF typology reports and pushes for blacklisting non-compliant jurisdictions.
✅ Strategic Goals: Financial integrity, economic stability, and geopolitical security.

📘 Source: FATF MER 2024, PIB

📝 Prelims MCQ:
With reference to the FATF, consider the following statements:
1. It is a legally binding UN body that enforces financial sanctions globally.
2. India is a full member of FATF and participates in Mutual Evaluations.
3. FATF also tracks financing of weapons proliferation.

Which of the above are correct?
A) 2 and 3 only
B) 1 and 2 only
C) 1 and 3 only
D) All of the above
Answer: A

📝 Mains GS3 Question:
FATF has emerged as a key global watchdog on illicit finance. Evaluate India’s performance in implementing FATF recommendations and its challenges in curbing proliferation financing.

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