PT POINTERS

FINANCIAL ACTION TASK FORCE (FATF)

THE CONTEXT: Recently, the global anti-money laundering watchdog, the Financial Action
Task Force (FATF), has suspended Russia's membership over the Ukraine war.
About FATF:
 The Financial Action Task Force (FATF) leads global action to tackle money
laundering, terrorist and proliferation financing.
 It was established in 1989 at the behest of the G7 and is headquartered in Paris.
 Currently, it has 39 Members. Out of 39 members, there are two regional
organisations: the European Commission, and the Gulf Cooperation Council.
 On June 25, 2010, India was entered as the 34th country member of FATF.
FUNCTIONS:
 The FATF researches how money is laundered and terrorism is funded, promotes
global standards to mitigate the risks, and assesses whether countries are taking
effective action.
 It maintains a list of countries that are non-compliant to the rules of the
organisation.
 It holds countries to account that do not comply with the FATF Standards. If a
country repeatedly fails to implement FATF Standards then it can be named a
Jurisdiction under Increased Monitoring or a High Risk Jurisdiction. These are often
externally referred to as “the grey and black lists”.
Black List:
 It is issued to list countries which are found to be non-cooperative in the global fight
against money laundering and terrorist financing.
 For example Iran, Democratic People's Republic of Korea and Myanmar are
blacklisted countries.
Grey List:
 It serves as a warning for countries to be compliant to the directions else face risk of
blacklisting.
 For example Democratic Republic of Congo, Syria, Türkiye are grey listed countries.