The Financial Action Task Force, an international money laundering watchdog, warned on Thursday that India faces a disparate range of terror threats, including from “the Islamic State or Al-Qaeda-linked groups active in and around Jammu and Kashmir”.
The task force also urged India to expedite prosecutions in cases of financial fraud.
The Financial Action Task Force creates standard guidelines for countries to take action against illicit funds generated through serious crimes including drug trafficking, illegal arms trade and cyber fraud. India became a member in 2010.
The task force has been criticised for giving “ammunition to authoritarian governments across the world to target their critics”, including India, under the pretext of investigating money laundering.
In its fourth Mutual Evaluation Report on India, the task force said the country had “achieved a high level of technical compliance across the FATF Recommendations and has taken significant steps to implement measures to tackle illicit finance”.
The report said: “India’s main money laundering risks originate from illegal activities within the country, these risks relate primarily to fraud, including cyber-enabled fraud, corruption and drug trafficking.”
On 37 of 40 parameters that were evaluated, India was “compliant” or “largely compliant”. However, it said that New Delhi needs to focus on concluding prosecutions of “terrorist financiers” and sanction them.
The report also emphasised a need for “preventing the non-profit sector from being abused for terrorist financing” in India.
According to the report, “India faces a disparate range of terrorism threats, categorised into six different theatres”.
The report adds: “These can be summarised as theatres associated with ISIL [Islamic State of Iraq and the Levant] or Al-Qaeda linked extremist groups active in and around Jammu and Kashmir, whether directly or via proxies or affiliates, as well as other separatist movements in the region; other ISIL and AQ cells, their affiliates, or radicalised individuals in India; regional insurgencies in the Northeast and North of India; and left-wing extremist groups seeking to overthrow the government.”
Under the report’s “Priority Actions” section, the task force suggested that India reduce its backlog of pending money laundering trials “both for new trials and for the backlog, addressing the low number of convictions” in such cases.
It also suggested “increasing conviction-based confiscation, by making major changes to increase the capacity of the court system, and potentially the capacity of the Enforcement Directorate”.
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