India Commended by FATF for Anti-Money Laundering Progress

The Financial Action Task Force (FATF) announced on Thursday that India has reached “a high level of technical compliance across the FATF Recommendations

The Financial Action Task Force (FATF) has commended India for achieving “a high level of technical compliance across the FATF Recommendations” and taking “significant steps to implement measures to tackle illicit finance.” The commendation follows a joint assessment with the Asia-Pacific Group on Money Laundering (APG) and the Eurasian Group (EAG).

The assessment, which was presented in Paris on Thursday, also highlighted areas where further improvement is needed. These include ensuring that money laundering and terrorist financing cases are completed with appropriate sanctions and adopting a risk-based approach to protect non-profit organizations from misuse in terrorist financing.

“India has achieved a high level of technical compliance across the FATF Recommendations and has taken significant steps to implement measures to tackle illicit finance. This is the result of a whole-of-government approach and sustained efforts by the country,” the FATF said in a statement.

“The report notes that as India’s economy and financial system continue to expand, the country should ensure that money laundering and terrorist financing cases are completed with appropriate sanctions and to adopt a risk-based approach to protect non-profit organizations from misuse in terrorist financing.”

The statement further noted that despite strong progress in building an anti-money laundering and counter-terrorism financing (AML/CFT) framework, some sectors are still in the early stages of development.

“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,” it said.

The FATF also praised India's financial authorities for their coordination and international cooperation, adding that the country must address delays in prosecutions.

“Overall, the assessment found that India has made significant progress in strengthening its AML/CFT regime. However, some sectors are still in the early stages of development and require further attention. India is placed in ‘regular follow-up’ and in line with procedures, will report back to the Plenary in three years,” the FATF concluded.