FATF launched Mutual Evaluation Report (MER) for India

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MER on ‘Anti-money laundering (AML) and counter-terrorist financing (CFT) measures’ placed India in the ‘regular follow-up’ category.

This recognises India’s effective compliance with FATF standards in AML/CFT efforts.

Key highlights

Key areas of improvement: Understanding Money laundering and terror financing (ML/TF) risk, national coordination and cooperation, use of financial intelligence for ML, predicate offences and TF investigations.
Main sources of ML: Illegal activities committed within country including fraud including cyber-enabled fraud, corruption and drug trafficking.
Security Threats: Islamic State or al-Qaeda linked groups active in and around Jammu and Kashmir are the most significant terror threats.
- India also faces terrorism threats from regional insurgencies in the Northeast and North, and Left-Wing Extremist groups
Issues in Implementation of PMLA: Despite rising investigations under the Prevention of Money Laundering Act (PMLA), the number of prosecution complaints and concluded trials did not show a proportionate increase.

Implementing targeted financial sanctions to ensure freezing of funds and assets without delay.
Define domestic PEPs (politically exposed persons) under the PMLA.
- Currently, foreign PEPs are defined under PMLA.
Protect the NPOs from terror abuse through risk-based enhanced measures.

MER is an assessment of a country’s measures to combat ML & TF and the proliferation of weapons of mass destruction.
India, along with four other G20 countries (UK, France, Italy, and suspended Russia), is in the top "regular follow-up" category.
Most developing countries fall under the “enhanced follow-up” category, requiring annual reports, compared to every three years for "regular follow-up" countries.