Context:
Financial Action Task Force (FATF) considers a set of binding rules to bring fugitive economic offenders across countries to justice.
About FATF:
- A watchdog body dedicated to global money laundering and terrorist financing.
- Establishment – During the G7 Summit in Paris (1989)
- Headquarters: Paris, France
- Objectives –
- Initial objective was to combat money laundering but after the 9/11 attacks on the US, it expanded its mandate to combat terrorist financing.
- Later added efforts to counter the financing of proliferation of Weapons of Mass Destruction (WMD).
- Functions –
- Establishes international standards and develop policies at national and international levels.
- Combats financial crime, reviews members’ policies and procedures
- Membership: 39 countries (India became a member of FATF in 2010)
- Observers: Indonesia (only observer country)
- FATF Sessions – FATF Plenary (decision making body) meets 3 times per year.
- 2 types of lists –
- Grey List (jurisdictions under increased monitoring):
- Countries that are considered a safe haven for supporting terror funding and money laundering.
- Serves as a warning to the country that it may enter the blacklist.
- Black List (high-risk jurisdictions):
- Countries known as Non-Cooperative Countries or Territories (NCCTs) that support terror funding and money laundering activities.
- At present – North Korea, Iran, and Myanmar – FATF’s blacklist countries
- Grey List (jurisdictions under increased monitoring):
- Consequences –
- No financial aid is given to them by the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB) and the European Union (EU).
- Economic sanctions, Reductions in international trade, International boycott etc.
Source: Tribune India
Previous Year Question
With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements:
1. AIIB has more than 80 member nations.
2. India is the largest shareholder in AIIB.
3. AIIB does not have any members from outside Asia.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2019 Prelims]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a)
