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 10-Jul-2025

The Financial Action Task Force (FATF)

Miscellaneous

Why in News? 

The Financial Action Task Force (FATF) has, for the first time, included a section on state-sponsored terrorism in its July 2025 report, reinforcing India’s stance against Pakistan’s role in terror financing. 

About FATF (Financial Action Task Force) 

  • FATF is an intergovernmental body that sets global standards to prevent money laundering and terrorist financing. 
  • It was established in 1989 at the G7 Summit in Paris. 
  • In 2001, its mandate was expanded to include counter-terrorism financing. 
  • Headquarters: Paris, France. 

Objectives of FATF 

  • To set and promote international standards to combat money laundering and terror financing. 
  • To ensure countries take effective action against financial crimes. 

Membership 

  • 39 members including India, USA, UK, France, China, and the EU. 
  • Over 180 countries are connected via FATF-style regional bodies (FSRBs). 
  • India became a member in 2010 and also belongs to, 
    • Asia Pacific Group (APG) 
    • Eurasian Group (EAG) 

FATF Grey List and Blacklist 

  • Grey List 
    • For countries that fail to curb terror financing/money laundering. 
    • It's a warning before being blacklisted. 
  • Blacklist 
    • For countries actively involved in such activities (e.g. North Korea, Iran, Myanmar). 
    • This leads to economic sanctions, denial of loans from bodies like IMF, World Bank, ADB. 

 

Preparing Through MCQ 

Q. Where is the headquarters of the Financial Action Task Force (FATF) located?

(1) Geneva, Switzerland 
(2) Paris, France 
(3) New York, USA 
(4) Brussels, Belgium 

Answer: (2) Paris, France