Jul. 6 – India is now a member of the Financial Action Task Force (FATF), an inter-governmental body that aims to develop national and international policies to prevent money laundering and terrorist financing.
India was able to comply with the FATF’s 40+9 Recommendations and was admitted as its 34th Country Member in June. The membership will help India establish its goal of becoming a finance hub. Prior to full membership, India had Observer status since 2006.
India’s commitment to the FATF will allow for better tools to manage the risks of terrorist activity and clamp down on terrorist funding.
India’s anti-money laundering and combating terrorist financing system is comparatively new. It was only in 2005 that the government enforced its Prevention of Money Laundering Act while the Unlawful Activities (Prevention) Act, 1967 only criminalized terrorist financing in 2004.
One of the FATF’s recommendations to India involved making improvements on the reliability of identification documents, the use of pooled accounts, non-face-to-face business and ensuring that the India Post effectively implements anti-money laundering and combating terrorist financing system requirements.
India’s membership could mean increased vigilance for corporate auditors to determine possible abuse that could indirectly effect financial statements.
