CONTENTS
- FATF Releases Mutual Evaluation Report on India
- Food Import Rejection Alert Portal
FATF Releases Mutual Evaluation Report on India
Context:
The Financial Action Task Force (FATF) recently published its Mutual Evaluation Report on India, recognizing the country’s substantial progress in combating illicit finance and strengthening its financial system.
Relevance:
GS II: International Relations
Dimensions of the Article:
- Key Highlights
- Financial Action Task Force (FATF)
Key Highlights:
- Partial Compliance: India was found partially compliant in three areas.
- Non-Profit Organisations (NPOs): Vulnerabilities related to NPOs registered as charitable organizations and benefiting from tax exemptions. These could potentially be used for terror funding.
- Politically Exposed Persons (PEPs): The report highlights ambiguities regarding the source of wealth, funds, and beneficial ownership for domestic PEPs.
- Designated Non-Financial Businesses and Professions (DNFBPs): There are gaps in regulation and supervision, especially regarding money laundering and terror financing.
- Illegal Activities: The primary sources of money laundering risks include fraud, cyber fraud, corruption, and drug trafficking.
- Precious Metals and Stones (PMS): Used for moving large amounts of funds without ownership trace, contributing to vulnerabilities.
- Terrorism Threats: Significant risks are posed by ISIL, Al-Qaeda, and regional insurgencies.
Recommendations:
- Expediting Money Laundering Trials: The report suggests expediting trials and improving the handling of crimes like human trafficking and drug-related offences.
- Improving the Freezing of Funds: Enhancements in the framework are needed to ensure timely freezing of funds and assets.
- Domestic PEPs: India needs to define domestic PEPs under its anti-money laundering laws and implement risk-based enhanced measures.
Financial Action Task Force (FATF)
- The Financial Action Task Force (on Money Laundering) (FATF) is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
- In 2001, its mandate was expanded to include terrorism financing.
- FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
- FATF monitors progress in implementing its Recommendations through “peer reviews” (“mutual evaluations”) of member countries.
- Since 2000, FATF has maintained the FATF blacklist (formally called the “Call for action”) and the FATF greylist (formally called the “Other monitored jurisdictions”).
- The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
FATF Greylists
- FATF greylist is officially referred to as Jurisdictions Under Increased Monitoring.
- FATF grey list represent a much higher risk of money laundering and terrorism financing but have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies.
- The countries on the grey list are subject to increased monitoring by the FATF, which either assesses them directly or uses FATF-style regional bodies (FSRBs) to report on the progress they are making towards their AML/CFT goals.
- While grey-list classification is not as negative as the blacklist, countries on the list may still face economic sanctions from institutions like the IMF and the World Bank and experience adverse effects on trade.
- Unlike the next level “blacklist”, greylisting carries no legal sanctions, but it attracts economic strictures and restricts a country’s access to international loans
FATF Blacklists
- FATF Blacklists is Officially known as High-Risk Jurisdictions subject to a Call for Action.
- FATF blacklist sets out the countries that are considered deficient in their anti-money laundering and counter-financing of terrorism regulatory regimes.
- The list is intended to serve not only as a way of negatively highlighting these countries on the world stage, but as a warning of the high money laundering and terror financing risk that they present.
- It is extremely likely that blacklisted countries will be subject to economic sanctions and other prohibitive measures by FATF member states and other international organizations.
Food Import Rejection Alert Portal
Context:
Recently, the Food Import Rejection Alerts (FIRA)- portal was launched during the second edition of the Global Food Regulators Summit 2024 hosted by FSSAI at Bharat Mandapam.
Relevance:
Facts for Prelims
Dimensions of the Article:
- Food Import Rejection Alert Portal
- Food Safety Standards Authority of India (FSSAI)
Food Import Rejection Alert Portal
- Purpose: An online portal for notifying food import rejections at Indian borders.
- Developer: Created by the Food Safety Standards Authority of India (FSSAI).
- Objective: To inform the public and relevant food safety authorities about rejected food imports.
Key Features
- Information Exchange:
- Facilitates rapid communication among global authorities regarding food safety and health risks from rejected food.
- Preventive Actions:
- Enables food authorities to take immediate action to prevent and control risks before they cause harm.
- Interactive Interface:
- Offers an online platform for quick information dissemination, enhancing traceability and transparency.
- Database Functionality:
- Acts as a valuable resource for tracking rejected food products and strengthening risk management systems.
Food Safety Standards Authority of India (FSSAI)
Background
- Establishment: An autonomous body under the Ministry of Health and Family Welfare, Government of India, established by the Food Safety and Standards Act, 2006.
- Purpose: Consolidates food safety regulations in India.
Mission
- Standards Setting: Establish globally benchmarked food safety standards.
- Compliance Promotion: Encourage food businesses to adhere to these standards and adopt good manufacturing and hygiene practices.
- Public Health: Enable citizens to access safe and healthy food.
Functions
- Public Health Protection: Regulates and supervises food safety to protect and promote public health.
- Standards and Guidelines: Lays down standards for food articles and provides licensing, registration, and accreditation for food business operators.
- Licensing Requirement: All food sellers and importers in India must obtain a food license from FSSAI.
- Import Controls: FSSAI officers oversee food import controls to ensure safety and compliance, including the accreditation of food testing laboratories across India.
