August 9, 2020

FATF overview of India’s anti-money laundering & terror financing regime pushed to 2021 resulting from COVID



The much-awaited Monetary Motion Activity Drive (FATF) mutual analysis of India’s anti-money laundering regime and authorized measures framed to verify monetary crimes, scheduled for this 12 months, has been postponed until early subsequent 12 months in view of the coronavirus pandemic, officers stated.

They stated the on-site overview to be performed by consultants of the worldwide physique was scheduled to start in September-October however the FATF secretariat in Paris has conveyed to India that the overview is being tentatively pushed to January-February subsequent 12 months.

The FATF is a world cash laundering and terrorist financing watchdog that units worldwide requirements to stop unlawful actions within the financial and monetary channels of a rustic and its inter-connected linkages internationally.

It conducts “peer opinions of every member on an ongoing foundation to evaluate ranges of implementation of the FATF suggestions and offers an in-depth description and evaluation of every nation’s system for stopping felony abuse of the monetary system.”

The overview of India’s anti-money laundering and terrorist financing regime was scheduled for this 12 months as a part of an everyday overview cycle after 10 years. The final such overview was completed in June 2010, a senior officer in an anti-money laundering company stated.

The FATF, submit this overview, had stated in 2013 that “India had made vital progress in addressing deficiencies recognized in its mutual analysis report and (the FATF) determined that the nation ought to be faraway from the common follow-up course of.”

India has arrange a joint working group comprising 22 central investigation, intelligence gathering and regulatory businesses to make displays and temporary the FATF consultants, drawn from varied international locations, this time.

A few of the outstanding businesses on this grouping supervised by the Division of Income underneath the finance ministry embrace the CBI, ED, Revenue Tax Division, Directorate of Income Intelligence, Monetary Intelligence Unit (FIU), Customs, market regulator SEBI, banking regulator RBI and insurance coverage regulator IRDAI.

The Union authorities had additionally deputed Rahul Navin, a 1993-batch Indian Income Service officer of the Revenue Tax Division, to work as an officer on particular responsibility (OSD) with the Enforcement Directorate (ED) to take these processes ahead.

Navin has authored a e-book, ‘Data Change and Tax Transparency: Tackling World Tax Evasion and Avoidance’, and served within the worldwide taxation wing of the tax division and labored carefully with the OECD, one other reputed world financial physique.

The ED is the nodal company to undertake investigations underneath the Prevention of Cash Laundering Act (PMLA) within the nation.

A senior Union finance ministry official stated all preparations to temporary the FATF reviewing group have been nearing completion when the COVID-19 outbreak occurred.

“We’ve been knowledgeable by the FATF that it has postponed the mutual analysis of many jurisdictions scheduled this 12 months together with that of India as a result of ongoing COVID-19 restrictions. It’s anticipated that the brand new dates can be for early subsequent 12 months,” the officer instructed .

The FATF too made a public declaration on this context.

“The gravity of the COVID-19 scenario globally and the ensuing COVID-19 associated measures that international locations have adopted, corresponding to confinement and journey restrictions, are making it unimaginable for assessed jurisdictions and assessors alike to conduct on-site visits and in-person conferences. This example has considerably impacted international locations’ capability to actively take part in mutual analysis and associated follow-up processes.”

“The FATF Plenary has subsequently agreed to quickly postpone all remaining FATF mutual evaluations and follow-up deadlines,” the FATF stated.

It stated India’s potential on-site interval is “tbc (to be thought-about)”.

In the course of the go to of FATF evaluators, the finance ministry officer stated, India has ready to current a number of dossiers of the motion undertaken by it underneath the anti-money laundering regulation, felony tax evasion probes and for strengthening the CFT (combating financing of terrorism) regime by the monetary intelligence unit (FIU) and different businesses.

The enactment of the Fugitive Financial Offenders Act in 2018, the anti-black cash Act of 2015, amendments introduced within the PMLA over time, curbing tax evasion underneath oblique taxes by bringing within the GST (items and providers tax), new protocols to higher regulate suspect transactions in banks and monetary intermediaries and the 2016 demonetisation of two giant currencies are a part of the Indian presentation, one other officer in a probe company stated.

The excessive variety of home and worldwide attachment of belongings underneath the PMLA and cost sheets filed by varied probe businesses underneath felony sections of the regulation towards monetary crimes and terror funding are additionally a part of India’s presentation to the FATF overview crew, he stated.

The brand new compliance regime introduced in by the FIU for banks and different monetary establishments to report suspect money and counterfeit transactions may also be a part of the presentation, he stated.

The overview takes a couple of 12 months to complete and if all timelines are adhered to, the FATF will talk about the Indian authorized system towards monetary crimes at its Plenary assembly in February, 2022 and subsequently challenge an announcement and suggestions in regards to the nation, the officer stated.