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Context
Money laundering
Author’s contention
India should make money laundering a standalone offence keeping in mind the on-site mutual evaluation by the Financial Action Task Force (FATF), which is due in November-December 2020
What is the legislation that deals with money laundering in India?
Prevention of Money laundering Act (PMLA)
Background
The first FATF mutual evaluation of India was done in 2010 when the body expressed satisfaction with the measures taken by the country. However, in the same breath, the FATF highlighted, in its 256-page report, a number of lacunae in the then legislation, for which it suggested changes. Since then, a range of laws have been amended
FATF
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989.
- Objective: The mandate of the FATF is to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. In collaboration with other international stakeholders, the FATF also works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse
- Recommendations: The FATF Recommendations set out the essential measures that countries should have in place to:
- Identify the risks, and develop policies and domestic coordination;
- Pursue money laundering, terrorist financing and the financing of proliferation
- Apply preventive measures for the financial sector and other designated sectors
- Establish powers and responsibilities for the competent authorities (e.g., investigative, law enforcement and supervisory authorities) and other institutional measures
- Enhance the transparency and availability of beneficial ownership information of legal persons and arrangements
- Facilitate international cooperation
