FATF Grey List & Other Lists
Context: India is considering pushing to bring Pakistan back onto the FATF grey list and curbing financial flows that aid terror activities following the Pahalgam attack on April 22.
Important Pointers:
Financial Action Task Force (FATF)
► Established: In 1989 at the G-7 Summit in Paris.
► Members: 38 countries + EU (India joined in 2010; Russia's membership is suspended).
Key Functions of FATF
► Watchdog Role: Global body combating money laundering, terrorist financing, and proliferation financing.
► Standard Setting: Issues binding recommendations for financial and non-financial institutions.
► Financial Inclusion Focus: Since the late 2000s, promoting formal financial access to curb illicit flows.
► Unintended Consequences Project: Addresses negative impacts like financial exclusion.
FATF Lists
► Grey List (Increased Monitoring): Countries with deficiencies but cooperating with FATF (e.g., previously Pakistan, now under watch again in some forums).
► Black List (High-Risk Jurisdictions): Countries with major deficiencies; subject to enhanced due diligence or counter-measures (e.g., North Korea, Iran).
Mutual Evaluation Report (MER)
► Assessment of a country's measures to combat money laundering the financing of terrorism and proliferation of weapons of mass destruction.