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Financial Action Task Force on Money Laundering

  • Category
    India & world
  • Published
    1st Oct, 2019

Pakistan on Monday submitted detailed answers to 125 questions posed by the Financial Action Task Force (FATF) on moves taken by it to strengthen anti-money laundering and combat financing of terrorism, as Islamabad seeks to move out of the FATF Grey list.

Context

Pakistan on Monday submitted detailed answers to 125 questions posed by the Financial Action Task Force (FATF) on moves taken by it to strengthen anti-money laundering and combat financing of terrorism, as Islamabad seeks to move out of the FATF Grey list.

About

  • The FATF was created in 1989 at the behest of the G7 and is headquartered in Paris.
  • The Financial Action Task Force (FATF) is an intergovernmental organization that designs and promotes policies and standards to combat financial crime.
  • Recommendations created by the Financial Action Task Force (FATF) target money laundering, terrorist financing, and other threats to the global financial system.

Features

  • The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
  • There are 37 members of the Financial Action Task Force, including the European Commission and the Gulf Cooperation Council.
  • To become a member, a country must be considered strategically important (large population, large GDP, developed banking and insurance sector, etc.), must adhere to globally accepted financial standards, and be a participant in other important international organizations.
  • Once a member, a country or organization must endorse and support the most recent FATF recommendations, commit to being evaluated by (and evaluating) other members, and work with the FATF in the development of future recommendations.
  • A large number of international organizations participate in the FATF as observers, each of which has some involvement in anti-money laundering activities.
  • These organizations include Interpol, the International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), and World Bank.

    Grey List: Those countries which are considered as the safe heaven for supporting terror funding and money laundering are included in this list. The inclusion in this list is not as severe as black listed. Grey list is a warning given to the country that it might come in Black list.

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