Online Desk: SO far, India’s 2023-24 mutual evaluation by the Financial Action Task Force (FATF) has placed it under the “regular follow-up” category, alongside only four other G-20 countries. While maintaining this status, FATF should not overlook the concerns raised by the Five Eyes Intelligence Alliance (FVEY), which focuses on identifying and combating international terrorist financing networks. FVEY has often highlighted vulnerabilities in various countries’ counter-terrorism financing frameworks, including India’s. These concerns primarily relate to financial irregularities in India, which could be linked to money laundering and terrorist financing in the region, particularly supporting terrorist networks in Pakistan and Afghanistan.
The Financial Action Task Force (FATF) evaluates India’s measures to combat financial corruption and money laundering through regular assessments. A joint FATF-APG-EAG assessment noted that while India has made progress in implementing anti-money laundering (AML) and counter-terrorist financing (CTF) standards, there are calls for faster prosecutions and improved efficiency in handling financial crimes. The FATF Recommendations serve as a benchmark for global efforts to tackle financial crimes and India’s adherence to these guidelines is closely monitored.
Moreover, India’s current challenges include addressing financing that may be linked to groups like ISIL or Al Qaeda, as reported in recent assessments of its anti-money laundering and counter-terrorism financing (AML/CFT) framework. Notably, the FATF can also take its input from the Five Eyes Intelligence (an intelligence alliance comprising the US, UK, Australia, Canada and New Zeeland).The intelligence forum expresses concern about India’s lack of effective regulation and oversight of its financial sector, being exploited by terrorist group to launder money and finance their activities. According to various reports, India’s financial system has been identified as potential target for terrorist financing, as the intelligence group has noted that India’s hawala and cashed-based economy make it challenging to track and prevent illicit financial transactions.
Additionally, India’s NGOs sector is also alleged of committing the crimes of money-laundering and terrorist financing. This involves utilizing systems that could facilitate money laundering and terrorist financing, undermining international financial integrity standards set by the FATF. It’s suggested that these groups exploit weaknesses in financial regulations and oversight to fund their operations. The dossiers that Pakistan’s Permanent Envoy to the UN handed over to the UN secretary General in 2017, 2020 significantly contain the information regarding India’s terrorist role.
Thus, given India’s history of espionage in the neighbouring countries via RAW’s terrorist proxies in Afghanistan, Bangladesh, Bhutan, China, Nepal, Myanmar and Sri Lanka, the FATF must unravel the links of India’s terror financing in these countries. Arguably, India needs to improve its international cooperation and information sharing with other countries. In this regard, the FATF is expected to conduct a neutral examination of India’s measures against terror financing, particularly focusing on how these measures affect the security of South Asian countries.
