Financial Action Task Force

‘Financial Action Task Force” refers to the practices of inter-governmental policies towards the development of international standards for reducing terrorism financing and money laundering across Indian society. India has become an observer in the membership of FATF for allocating the required policies on the financial regulations. The set of international standards is recommended for proliferation financing and money laundering. This also includes the composition of financial activities in order to promote the financial action task force. 

Concept of Financial Action Task Force 

The “financial action task force” deals with the inter-governmental policies towards the set of international standards and promotes the financial policies that reduce money laundering and terror financing. In other words, the implementation of regulatory, operational, and legal measures of financial activities that helps to prevent various financial threats that have been evaluated from the overview of the Financial Action Task Force. The integration of financial policies is required for reducing terror financing not only across India but also across World. 

Composition, functionality, and the fight to suppress terror financing activity 

The FATF helps to implement financial regulations that reduces terror financing and money laundering. The goals of the financial activity task force are associated with the stability and integrity of the “International Financial System” which makes it more difficult for the people who are engaged with criminal activities. This also includes the concealment of all the sources from which the funding activities are undertaken. The responsibilities and powers of Indian law enforcement allow establishing more strengthened relations with international standards. The appropriate maintenance of legal regulations related to financial activities is most important to prevent terror financing activities across society. 

Members of FATF 

The combined membership of the financial action task force comprises India, China, Russia, Kyrgyzstan, Kazakhstan, Belarus, Turkmenistan, Tajikistan, Uzbekistan, etc. The risk-based approaches are applied to the members of FATF in order to clarify the elaborated international standards. This also allows the members to adopt the appropriate and effective responses that are used to prevent financial risks. 

Concept of the black list as well as gray list related to FATF 

The black list countries in FATF are considered as which supports money laundering and terror funding activities whereas, the gray-listed countries are considered as safe havens for supporting terror funding and money laundering. The boards of the financial action task force revise all the blacklists in a regular manner for deleting or entering the entries. This also includes that the FATF serves a notice to the countries which may enter into the blacklist. The maintenance of the “Anti-Terrorism Act” is most important for reducing money laundering across Indian society. 

Consequences to be in the gray list of FATF 

The gray-listed countries under the financial action task force include the appropriate maintenance of the “Public Order Act” to consider the necessary regulations and policies. The considered consequences to be in the gray list of FATF are followed by the economic sanctions from the ADB, World Bank, and IMF. The most important consequence is related to the problems faced during getting financial loans from the World Bank, IMF, and ADB. The “reduction in international trade” is also considered as the prime concern to be in the gray list of the financial action task force. Apart from this, the “International boycott” is another consequence that involves the conditions for being the gray-listed country in the FATF.

Conclusion 

The financial action task force is considered for developing the financial activities by the inter-governmental policies across the society. The prime concern towards the FATF is associated with the development of inter-governmental agencies for reducing money laundering to the global level with international standards. On the other hand, in order to stop financial crimes, the Indian government is required to adopt all the essential regulations and policies across society. This also includes the consequences of black-listed and gray-listed countries.