The Financial Action Task Force said improvements in the system were required to protect the non-profit sector from terror abuse. File
| Photo Credit: Reuters

Global anti-money laundering and terror financing body, Financial Action Task Force (FATF), launched its much-awaited mutual evaluation report on India, saying the county’s systems were “effective” but “major improvements” were required to strengthen prosecution in these cases on Thursday (September 19, 2024).

The report said India implemented an Anti-Money Laundering (AML) and Combating Financing of Terror (CFT) system that was effective in many respects. It, however, said “major improvements” were required to strengthen the prosecution in money laundering and terror financing cases.

The 368-page report was released after the assessment was adopted by the Paris-headquartered body at its June plenary meeting. The last such review of India’s combating of money laundering and terror financing regime was published in 2010.

The report, which comes after an on-site visit of FATF experts to India last November, has placed the country in the “regular follow up” category, a distinction shared by only four other G20 countries.

India will undergo its next evaluation in 2031.

It said improvements in the system were also required to protect the non-profit sector from terror abuse.

“India’s main sources of money laundering originate from within, from illegal activities committed within country,” it said, adding the country faced “disparate” range of terror threats, most significantly from ISIL (Islamic State or ISIS) or AQ-linked groups (Al Qaeda) active in and around Jammu and Kashmir.

The report analyses the level of compliance with the FATF 40 recommendations and the level of effectiveness of India’s AML/CFT system, and provides recommendations on how the system can be strengthened.

Global anti-money laundering watchdog the Financial Action Task Force (FATF) said on June 28, 2024, it had added Monaco to a “grey list” of countries subject to increased monitoring. File
| Photo Credit: Reuters

Global anti-money laundering watchdog the Financial Action Task Force (FATF) said on June 28 it had added Monaco to a “grey list” of countries subject to increased monitoring.

The action comes despite Monaco having already taken a series of actions after being singled out by the Council of Europe’s anti-money laundering body following a series of unverified claims against figures close to Prince Albert II.

The FATF, a Paris-based organisation which monitors efforts by more than 200 countries and jurisdictions to prevent money laundering and the financing of terrorism, added Monaco and Venezuela to its grey list at a plenary meeting held in Singapore.

Grey list nations are considered to have “strategic deficiencies” in countering money laundering and terrorist financing, while however cooperating with the FATF to correct the problems.

‘Monaco needs to address strategic deficiencies’

Long known as a playground for the rich and famous, Monaco attracts rich residents due to an extremely favourable tax regime which include an absence of income and wealth taxes. “Despite significant progress achieved since 2022, Monaco needs to address strategic deficiencies,” said FATF president Raja Kumar.

Monaco’s government said it is committed to getting off the grey list. “The principality confirms its determination to implement the latest FATF recommendations set out in the declaration, in accordance with the planned deadlines,” the government of the Mediterranean tax haven said.

Measures already taken by Monaco

The FATF found that Monaco had not made enough efforts to stop laundering money from fraud committed abroad or moved aggressively enough to seize criminal assets. It also judged money-laundering penalties to be insufficient and investigators lacked sufficient resources.

In January 2023, the Council of Europe’s anti-money laundering body Moneyval urged Monaco to intensify its efforts in the investigation and prosecution of money laundering. It has since adopted nine laws to toughen its rules and boost its anti-money laundering body, the AMSF.

Local sources have said it has been difficult to apply the measures immediately due to a lack of qualified staff.

A 2023 census put the number of Monegasques at 9,720, which means that Monaco often needs to rely on foreign experts, which is not in conformity with FATF rules.

Monaco was briefly on a OECD blacklist of financial centres in 2009, which prompted it to undertake a series of transparency measures and put into place cooperation agreements to help crack down on tax evasion.

Monaco has been shaken since the end of 2021 by anonymous denunciations orchestrated by a website “Les Dossiers du Rocher” (“The Rock Files”).

The site accused several figures close to Prince Albert of being in cahoots in a money laundering scheme based on corruption in property deals, and forced the ouster in 2023 of crown assets chief administrator Claude Palmero.

Jamaica, Türkiye removed from grey list

The FATF also removed Jamaica and Türkiye from the grey list after they eliminated the identified deficiencies in their efforts to prevent money laundering and the financing of terrorism.

“Thanks to the good measures we’ve adopted, Türkiye has been removed from the grey list,” the economy ministry said following the decision.

FATF had placed Türkiye on the list in October 2021. A total of 21 nations are on the grey list, including Mali, Vietnam and Yemen.

The FATF also has a “black list” of nations which are considered high-risk jurisdictions. The body urged countries to apply countermeasures against Iran and North Korea and warned about the latter’s “illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing”.

It urged countries to end all business with North Korean banks and limit business with Pyongyang entities.

The FATF also urged countries to apply countermeasures to Iran, which it noted had not ratified the Palermo and Terrorist Financing Conventions.