India to join war on terror financing

It seems India very soon, can find a place at the important inter-governmental body set up for creating global policies and framework to combat money laundering and terror financing — the Financial Action Task Force (FATF). New Delhi had recently tightened its anti-money laundering laws. Membership of this body would allow India to gain easy access to real-time exchange of information on money laundering and terror financing.

FATF is an inter-governmental body founded by the G-7 countries in 1989 for developing and promoting national and international policies to combat money laundering and terrorist financing.

India has already allowed overseas payment gateways such as Visa and Master, brought money changers and money transfer service providers under the ambit of PMLA, imposing mandatory disclosures on these entities. Insider trading and market manipulation, human trafficking, smuggling of migrants, piracy and environmental crimes, over invoicing and under invoicing under customs have also become an offence under that PMLA, inviting stricter punishment. These changes would also make the country a more attractive destination for foreign investments as well as allow easier market access for India’s financial institutions in the industrialised world.

By gaining membership of this FATF, India will get freedom to directly stop the funds of these terrorists in India and in surrounding areas which will stop their one source of income. This step will go a long way in changing India’s perception in the eyes of global investors as well as promote bilateral co-operation on information exchange among regulator. This membership will come with its challenges. India will have to improve the pace of implementing statutes to remain compliant.