FATF Urges India to Expedite Financial Fraud Prosecutions

The Financial Action Task Force (FATF) has called on India to accelerate its prosecutions in financial fraud cases. A recent report rated India 'moderately' effective in money laundering investigations and prosecutions, highlighting the need for more timely resolutions amid court backlogs and constitutional challenges.

The global anti-money laundering watchdog Financial Action Task Force (FATF) has called on India to expedite its prosecutions in financial fraud cases.

Established in 1989, the 40-member FATF recently rated India as 'moderately effective' in its money laundering investigations and prosecutions, while noting the country is largely compliant in most other areas. The task force sets global standards for national authorities in combating illicit funds generated through various serious crimes.

India, a member since 2010, was found to be compliant or largely compliant on 37 out of 40 parameters evaluated. However, the number of money laundering convictions over the past five years has been hampered by constitutional challenges and an overloaded court system, according to the report released on Thursday. India's courts are burdened with substantial backlogs, leaving many cases pending for years.

The Enforcement Directorate, India's anti-money laundering agency, has seized assets worth 9.3 billion euros ($10.4 billion) from suspected financial criminals over the last five years, but only a fraction has been confiscated following convictions. The report stressed the importance of addressing these issues to ensure timely trials and prosecutions.

Partial compliance was noted in areas such as bank scrutiny of political figures' wealth, oversight of non-profit organizations, and non-financial businesses and professionals. Additionally, the watchdog pointed out India's threats from terrorist financing, particularly from groups in Jammu & Kashmir, and money laundering linked to corruption, drug trafficking, and cybercrime.

FATF emphasized the need for India to focus on concluding prosecutions and effectively sanctioning terrorist financiers.

(With inputs from agencies.)