Why this matters now
FATF is tested for: the 40 Recommendations + 9 Special Recommendations, the Grey List and Black List, Pakistan’s grey-listing history (2018-22 exit), India’s FATF Mutual Evaluation Report 2024 (India placed in “regular follow-up” — the best category), and the PMLA + FEMA + UAPA framework.
Structure
FATF was created at the 15th G7 Summit, Paris, 14-16 July 1989. The original mandate was anti-drug-money laundering (Vienna Convention 1988); post-9/11 expanded to counter-terrorism financing. FATF has 39 full members (37 jurisdictions + 2 regional organisations) and 9 FATF-Style Regional Bodies (FSRBs). India belongs to the Asia-Pacific Group on Money Laundering (APG) — one of the FSRBs.
The FATF Plenary meets 3 times a year. President serves 1 year (extended to 2 years from 2020). Current President Elisa de Anda Madrazo (Mexico, 1 July 2024-30 June 2026). The Secretariat is at the OECD HQ Paris.
FATF Black List + Grey List
- Black List (High-risk jurisdictions subject to a call for action): as of October 2024 — Iran, North Korea, Myanmar.
- Grey List (Jurisdictions under increased monitoring): as of October 2024 — ~25 countries including Algeria, Angola, Bulgaria, Burkina Faso, Cameroon, Cote d’Ivoire, Croatia, Democratic Republic of the Congo, Haiti, Kenya, Lebanon, Mali, Monaco, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Venezuela, Vietnam, Yemen.
- Pakistan was on the Grey List June 2018 - October 2022 for terror-financing deficiencies (Lashkar-e-Taiba, Jaish-e-Mohammed). Exited after fully complying with 27 + 7 action items.
India @ FATF
India became an FATF observer in 2006 and a full member in June 2010 (during 21st FATF Plenary, Paris). India is currently a member of the Steering Group. India’s domestic AML/CFT architecture:
- Prevention of Money Laundering Act (PMLA) 2002 — amended 2009, 2012, 2019, 2024 to expand the scope of “reporting entities” (banks, FIs, brokers, virtual digital asset SPs).
- Financial Intelligence Unit-India (FIU-IND) — under Ministry of Finance; receives Suspicious Transaction Reports.
- Enforcement Directorate (ED) — investigates PMLA + FEMA offences.
- Foreign Exchange Management Act (FEMA) 1999, Unlawful Activities (Prevention) Act (UAPA) 1967, Black Money Act 2015.
The FATF Mutual Evaluation Report on India (September 2024) — published after FATF’s on-site visit of November 2023 — placed India in the “regular follow-up” category, the best possible rating. India joins UK and France among large economies in this top category. India scored “Compliant” or “Largely Compliant” on 37 of 40 FATF Recommendations.
UPSC angle
Know FATF (Financial Action Task Force) — global AML/CFT watchdog founded G7 15th Summit PARIS 14-16 July 1989, original mandate anti-drug-money laundering post Vienna Convention 1988, post-9/11 expanded to counter-terror financing; HQ at OECD Paris; 39 full members (37 jurisdictions + 2 regional orgs) + 9 FSRBs (India in Asia-Pacific Group APG); President Elisa de Anda Madrazo Mexico 1 July 2024-30 June 2026; INDIA observer 2006, FULL MEMBER June 2010 (21st Plenary Paris), member of Steering Group; 40 RECOMMENDATIONS + 9 Special; LISTS: Black List = Iran/N.Korea/Myanmar (Oct 2024); Grey List ~25 countries; PAKISTAN Grey List June 2018-Oct 2022; INDIA Mutual Evaluation Report Sept 2024 placed in “regular follow-up” BEST CATEGORY (with UK + France), Compliant/Largely Compliant on 37 of 40; India framework: PMLA 2002 + FIU-IND + ED + FEMA 1999 + UAPA 1967 + Black Money Act 2015.
Frequently asked questions
When was FATF founded?
At the 15th G7 Summit at Paris on 14-16 July 1989. Originally for anti-drug-money laundering, expanded to counter-terror financing after 9/11.
What is the FATF Grey List?
“Jurisdictions under increased monitoring” — countries with strategic AML/CFT deficiencies that have committed to addressing them within agreed timeframes. As of October 2024 ~25 countries.
When did Pakistan exit the FATF Grey List?
In October 2022, after staying on the Grey List from June 2018 for deficiencies linked to terror financing of LeT and JeM.
What was India’s FATF MER 2024 result?
India was placed in the “regular follow-up” category — the best possible rating. India joins UK and France in this top category for AML/CFT compliance.