Govt seeking FATF membership to check terror funding

The government today informed the Rajya Sabha that it is seeking membership of the global Financial Action Task Force (FATF) as it would strengthen the nation's capacity to track terror funding from across the borders and fight organised crime.

FATF, set up as an international organisation to combat money laundering way back in 1989, will take a decision on India's membership at its plenary scheduled in June, minister of state for finance Namo Narain Meena said in a written reply in the Upper House. At present, the global body has 33 member-countries.

India, which was identified as a strategically important nation by the FATF, was admitted to it as an observer in November 2008, the minister said. The FATF membership, Meena said, will enable the country to "ensure that financial institutions are not vulnerable to infiltration or abuse by organised crimes; (and) build capacity to fight terrorism and trace terrorist money."

Set up by the G-7 summit in Paris, FATF aims at generating necessary political will to bring about national legislative and regulatory reforms to combat money laundering. Besides, it establishes global standards and measures for countering money laundering and terrorist financing and fosters and monitors implementation of these standards by the member-countries.
       
FATF had issued 49 recommendations since 1990 with a view to prevent and suppress financing of terrorism and terrorist acts.
       
As regards India's membership, Meena said, the FATF mutual evaluation assessment team had visited India from November 30-December 11, 2009 and had examined the effectiveness of the Prevention of Money Laundering Act of 2002 and Unlawful Activities Prevention Act of 1967 and the rules made under these laws.
     
Based on consultations, the FATF secretariat forwarded its first draft of the mutual evaluation report on India to the government for comments, Meena said, adding thereafter, a second draft was prepared which would be discussed at the Sydney at meeting between the Indian officials and FATF evaluation team.
   
A final report, which will be prepared by FATF, "will be placed before the FATF plenary in June which will decide on India's membership".