What is the Financial Action Task Force (FATF)?

About Financial Action Task Force (FATF):

• FATF is an inter-governmental policy-making and standard-setting body dedicated to combating money laundering and terrorist financing.
• Objective: To establish international standards, and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism.
• It was established in 1989 during the G7 Summit in Paris to develop policies against money laundering.
• In 2001 its mandate expanded to include terrorism financing.
• Headquarters: Paris, France.
• FATF members include 39 countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the EU as such.
• India became a member of FATF in 2010.

• What are FATF 'grey list' and 'blacklist'? FATF has 2 types of lists:
• Black List:Countries knowns as Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
• Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering are put on the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
• Three countries North Korea, Iran, and Myanmar are currently in FATF’s blacklist.

• Consequences of being on the FATF blacklist:
• 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).
• They also face a number of international economic and financial restrictions and sanctions.