Financial Action Task Force (FATF)

Definition

An intergovernmental body that sets global standards to combat money laundering, terrorist financing, and the financing of proliferation of weapons of mass destruction, and that monitors countries' compliance.

Key points

• It was established in 1989 by the G7, with its secretariat housed at the OECD in Paris; India became a full member in 2010.
• It issues the FATF Recommendations, the international standard for anti-money-laundering and counter-terror-financing (AML/CFT) measures.
• It maintains a "grey list" (jurisdictions under increased monitoring) and a "black list" (high-risk jurisdictions called on for counter-measures); placement on these lists has significant economic consequences.
• It is a policy-making body, not a court or a bank; it relies on peer review and mutual evaluation of member countries.
• It is highly relevant to India's security diplomacy, as India has pressed for action against States that fail to curb terror financing.

Why it matters for CAPF

Terror financing is a direct internal-security and current-affairs concern; the FATF's role, its 1989 origin, the grey and black lists, and India's 2010 membership are commonly tested.

Common confusion

The FATF sets standards and monitors compliance against money laundering and terror financing; it is not a UN body and not a lender like the IMF or World Bank. The grey list means increased monitoring, while the black list means high risk and possible counter-measures.

Related concepts

concept uapa, concept nia, concept comprehensive test ban treaty, concept missile technology control regime

Parent note

international organisations and india