FINANCIAL ACTION TASK FORCE

Financial action task force is an inter-governmental body responsible for setting global standards on anti-money laundering and combating financing of terrorism. The FATF Secretariat is housed at the headquarters of the OECD in Paris and after long wait, India has finally become a full-fledged member of the FATF. History of the FATF In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989.  Recognising the threat posed to the banking system and to financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries. Objective The objectives of the FATF are 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.  The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms. Starting with its own members, the FATF monitors countries' progress in implementing the FATF Recommendations; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the FATF Recommendations globally. The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.  In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse. Benefits to INDIA With its induction as the 34thmember country of the global body that chalks out policies to counter financial frauds, India will have access to information on suspicious financial transactions in Switzerland, China, U.S and the U.K. The development marks a significant step towards tracing the source of terror financing and black money stashed away in tax heavens abroad. India and its tax enforcement authorities—the Financial intelligence unit, the Enforcement directorate, the central economic intelligence bureau and the Directorate of revenue intelligence would be able to exchange vital information from member countries on money laundering and terrorist financing activities. Current In February 2012, the FATF completed a thorough review of its standards and published the revised FATF Recommendations. This revision is intended to strengthen global safeguards and further protect the integrity of the financial system by providing governments with stronger tools to take action against financial crime. They have been expanded to deal with new threats such as the financing of proliferation of weapons of mass destruction, and to be clearer on transparency and tougher on corruption. The FATF currently comprises 34 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.