FINANCIAL ACTION TASK FORCE (FATF)

Why in News?

FATF meetings in Paris are set to discuss state sponsorship of terrorism, focusing on Pakistan-based entities like LeT and Jaish-e-Mohammed, which allegedly receive government support for funding, logistics, and reconstruction under misleading pretexts.

Description:

• Type: Intergovernmental policy-making & standard-setting body
• Objective: To set global standards and promote policies to combat
  • Money Laundering (ML)
  • Terrorism Financing (TF)
• Established: 1989, during the G7 Summit in Paris
• Expanded Mandate: 2001 – to include combating terrorist financing
• Headquarters: Paris, France

Membership

• Members: 39 countries + European Union (Includes India, USA, UK, China, France, Germany, Saudi Arabia, etc.)
• Affiliated countries: 180+ via FATF-style Regional Bodies (FSRBs)
• India’s Membership: Joined in 2010
  • Member of APG (Asia Pacific Group)
  • Member of EAG (Eurasian Group on ML & TF)

Functions & Role:

• Develops and monitors AML/CFT (Anti–Money Laundering & Counter–Terror Financing) policies
• Evaluates member compliance through Mutual Evaluation Reports
• Publishes reports on new ML/TF risks and trends
• Issues Recommendations – the global standard for AML/CFT
• Can label non-compliant nations as “jurisdictions under increased monitoring” (Grey List) or “high-risk jurisdictions” (Black List).

Black List (NCCTs):

• Countries supporting terror funding or money laundering
• Face economic & financial sanctions
• Denied financial aid from IMF, World Bank, ADB, EU, etc.
• Current (2025): North Korea, Iran, Myanmar

Grey List:

• Nations offering safe havens for ML/TF activities
• Warning stage before possible blacklisting

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