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MER on ‘Anti-money laundering (AML) and counter-terrorist financing (CFT) measures’ placed India in the ‘regular follow-up’ category.
- This recognises India’s effective compliance with FATF standards in AML/CFT efforts.
Key highlights
- Key areas of improvement: Understanding Money laundering and terror financing (ML/TF) risk, national coordination and cooperation, use of financial intelligence for ML, predicate offences and TF investigations.
- Main sources of ML: Illegal activities committed within country including fraud including cyber-enabled fraud, corruption and drug trafficking.
- Security Threats: Islamic State or al-Qaeda linked groups active in and around Jammu and Kashmir are the most significant terror threats.
- India also faces terrorism threats from regional insurgencies in the Northeast and North, and Left-Wing Extremist groups
- Issues in Implementation of PMLA: Despite rising investigations under the Prevention of Money Laundering Act (PMLA), the number of prosecution complaints and concluded trials did not show a proportionate increase.
Key recommendations
- Implementing targeted financial sanctions to ensure freezing of funds and assets without delay.
- Define domestic PEPs (politically exposed persons) under the PMLA.
- Currently, foreign PEPs are defined under PMLA.
- Protect the NPOs from terror abuse through risk-based enhanced measures.
About MER
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