Major Threat From Islamic State, Al-Qaeda; Terror Funding Happening Through Money Laundering: FATF Report On India

In a significant disclosure, the Financial Action Task Force (FATF) announced on Thursday (19 September) that India faces a diverse array of terror threats, primarily from Islamic State and Al-Qaeda-linked groups.

These groups operate in and around Jammu and Kashmir and get funded by money laundering occurring in illegal activities inside the country.

The global watchdog noted that India has established an effective anti-money laundering and counter-terror financing framework in many areas.

However, it emphasised the need for substantial improvements in prosecuting money laundering and terror financing cases.

This assessment was part of a 'mutual evaluation report' published by FATF, which focuses on countering terror financing and strengthening anti-money laundering measures.

FATF also pointed out that further measures are required to protect the non-profit sector from being exploited by terrorist activities as India's primary sources of money laundering are within the country.

The fourth round of India's mutual evaluation by FATF took place in November 2023. During the FATF plenary held in Singapore from 26 to June the mutual evaluation report for India was adopted.

It highlighted that the country had achieved a "high level of technical compliance" with FATF's standards. India was placed in the "regular follow-up" category, a distinction shared by only four other G20 nations, including the UK, France, and Italy.

Countries in the 'regular follow-up' category are required to submit follow-up reports to the FATF every three years on a voluntary basis.