FATF Releases Crucial Evaluation Report on India

The Financial Action Task Force (FATF) is set to release India's Mutual Evaluation Report (MER) on September 19. India has achieved high technical compliance, enhancing its credibility and investment appeal. FATF's evaluations impact international cooperation, trade, and borrowing costs.

By Shailesh Yadav The Financial Action Task Force (FATF) will release the Mutual Evaluation Report (MER) on India on September 19, according to government sources.

The mutual evaluation, conducted every 10 years, marks a significant milestone since India joined FATF in 2010. Formed in 1989, FATF is the global authority on combating money laundering and terrorist financing. India's MER, adopted in Singapore's June 2024 plenary, confirms India's high level of technical compliance with FATF standards.

In June, India joined an elite group of G20 nations including the UK, France, and Italy, being placed in the 'regular follow-up' category by FATF. This recognition boosts India's financial credibility and attractiveness for foreign investment, government sources highlighted. It also enhances access to international markets and reduces borrowing costs.

The evaluation strengthens India's cooperation with other countries in counter-terrorism, asset recovery, and law enforcement. A favorable rating improves India's trade finance instruments' trust, furthering international trade opportunities. Achieving high ratings in FATF's 40 recommendations and 11 immediate outcomes is stringent, requiring meeting criteria in at least 33 recommendations and 5 immediate outcomes for regular follow-up placement.

The FATF currently has 39 members, with Russia's membership suspended since February 2023. By June 2024, FATF assessed 133 jurisdictions and publicly identified 108. Out of these, 84 jurisdictions implemented necessary reforms to rectify AML/CFT deficiencies and exited the process. Currently, North Korea, Iran, and Myanmar are blacklisted by FATF. The grey list includes countries like Bulgaria, Burkina Faso, and Kenya.

(With inputs from agencies.)