India Faces Serious Terrorism, Terrorist Financing Threats From Al Qaeda: FATF
Paris: The Financial Action Task Force (FATF) on Thursday praised
India's efforts to tackle illicit finance, however, warned the country of
serious terrorism and terrorist financing threats, including those related to
ISIL or Al Qaeda.
"India achieved a high-level of technical compliance across the FATF
Recommendations and has taken significant steps to implement measures to
tackle illicit finance. Nevertheless, India needs to continue to improve its
system as its economy & financial system continue to grow," posted FATF on
X.
Lauding India's measures to tackle illicit finance, the joint FATF-APG-EAG
report added, "India has implemented an anti-money laundering and
counter-terrorist financing (AML/CFT) framework that is achieving good
results, including on risk understanding, access to beneficial ownership
information and depriving criminals of their assets."
It also praised Indian authorities for making good use of financial
intelligence and co-operate effectively, both domestically and
internationally.
Meanwhile, the global body to combat money laundering and terrorist financing
warned India to focus on concluding the prosecutions and convicting and
appropriately sanctioning terrorist financiers.
"India faces serious terrorism and terrorist financing threats, including
related to ISIL or Al Qaeda. India as a strong emphasis on disruption and
prevention and has demonstrated its ability to conduct complex financial
investigations. Nevertheless, the country must continue to improve its system
as its economy and financial system continue to grow, in particular ensuring
that money laundering and terrorist financing trials are completed and
offenders are subject to appropriate sanctions; and taking a risk-based and
educative approach with non-profit organisations. The country needs to ensure
that measures aimed at preventing the non-profit sector from being abused for
terrorist financing are implemented in line with the risk-based approach,
including by conducting outreach to non-profit organisations on their
terrorist financing risks," added the report.
India is the largest country in the world by population and has the largest
diaspora. It is a lower-middle income country with one of the world's
fastest-growing economies that is currently the world's fifth largest economy.
India's main money laundering risks originate from illegal activities within
the country, these risks relate primarily to fraud, including cyber-enabled
fraud, corruption and drug trafficking.
India pursues money laundering related to fraud and forgery in line with
predicate crime risks to a large extent, but less so with some other offences
such as human trafficking and drug trafficking. The country needs to address
the backlog of money laundering cases pending conclusion of court processes,
added the report.
Praising India's efforts to combat money laundering and terrorist financing,
the report said, "India has made significant steps in financial inclusion,
more than doubling the proportion of the population with bank accounts,
encouraging greater reliance on digital payment systems, and making use of
simplified due diligence for small accounts. These efforts have supported
financial transparency, which in turn contribute to AML/CFT efforts."
Despite the size and institutional complexity of the Indian system, Indian
authorities cooperate and coordinate effectively on matters dealing with
illicit financial flows, including the use of financial intelligence. India
also achieved positive results in international co-operation, asset recovery
and implementing targeted financial sanctions for proliferation financing, the
report added.
Indian authorities also have a comprehensive understanding of the money
laundering, terrorism and proliferation financing risks but need to do more to
share insights on these risk across all relevant stakeholders.
There is a good understanding of risk and application of preventative measures
in the financial sector, especially by commercial banks, although less so by
some other smaller financial institutions.
Financial Institutions are taking steps to apply enhanced measures to
politically exposed persons (PEPs), however, India needs to address the issue
of lack of coverage of domestic PEPs from a technical compliance perspective
and ensure reporting entities fully implement these requirements.
Implementation of preventative measures by the non-financial sector and
virtual asset service providers, and supervision of those sectors, is at an
early stage. India needs to improve implementation of cash restrictions by
dealers in precious metals and stones as a priority given the materiality of
the sector.
Following the assessment, India is placed in "regular follow-up" and in line
with procedures, will report back to the Plenary in three years.
This report is auto-generated from a syndicated feed
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