Source- This post on FATF Recommendations for India is based on the article “India should increase court system capacity, reduce pending trials: FATF” published in The Hindu on 20th September 2024.
Why in News?
Recently, Financial Action Task Force (FATF) mutual assessment report of India was published. FATF Recommendations for India
About FATF Recommendations for India
1. Need for Increased Court Capacity: The Financial Action Task Force (FATF) recommended that India must significantly increase the capacity of its court system to reduce the backlog of pending trials, particularly in money laundering cases. Strengthening the Enforcement Directorate’s (ED) capabilities was also suggested as a crucial step in improving the handling of such cases.
2. Addressing Delays in Terror Financing Prosecutions: FATF highlighted the importance of addressing delays in terror financing prosecutions by improving the speed and efficiency of trials. Changes to streamline the prosecution process for terror financing cases were deemed necessary.
3. Constitutional Challenges Slowing Prosecutions: A key reason for the low number of prosecutions in recent years was attributed to the constitutional challenge posed by 121 petitions against the Prevention of Money Laundering Act (PMLA) provisions.. Also, the Supreme Court ruling in the Vijay Madanlal Chowdhary vs. Union of India case in July 2022 resolved these challenges, allowing trials to proceed.
4. Investigation and Conviction Statistics: During the assessment period, the ED initiated 4,163 investigations, dropping 132 of them. Prosecution complaints were filed in 864 cases, leading to 28 convictions. Despite facing only one acquittal, the ED’s ability to prosecute was hampered by systemic issues.
5. Legal Challenges to ED Powers: Several legal challenges were raised against the ED’s powers under the PMLA, which affected the pace of investigations and prosecutions. The Supreme Court ruling in 2022 upheld the PMLA provisions, allowing prosecutions to continue unaffected since then, although some legal challenges remain.
6. Limited Resources Leading to Saturation: FATF noted that the limited number of specialised prosecutors and special court judges within the ED contributed to a saturation of the judicial system, hindering its ability to prosecute cases effectively.
7. High Technical Compliance: Despite the challenges, FATF recognised that India achieved a high level of technical compliance with FATF’s recommendations, demonstrating a robust legal framework.
8. Terrorism and Financing Threats: India faces serious terrorism and terror financing threats, including those linked to groups like Islamic State and al Qaeda, necessitating an effective legal and enforcement system to combat these risks.
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