What is FATF?

The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 at the G7 Summit in Paris to combat money laundering, terrorist financing, and the financing of weapons of mass destruction (WMD) proliferation. Its headquarters is in Paris, France, housed at the OECD.

FATF sets international standards through its 40 Recommendations, which serve as the global benchmark for anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks. It conducts Mutual Evaluation Reviews (MERs) of member countries and maintains two key lists: the "Grey List" (countries under increased monitoring) and the "Black List" (high-risk jurisdictions subject to counter-measures).

India became a FATF member in 2010 and is also a member of its regional affiliates — the Asia/Pacific Group on Money Laundering (APG) and the Eurasian Group (EAG). In its 2024 Mutual Evaluation, India was placed in the top "Regular Follow-up" category — a distinction held by only 5 G20 nations including France, Italy, Russia, and the UK.

Key Features

# Feature Details
1 Founded 1989 at G7 Summit, Paris
2 Headquarters Paris, France (at OECD)
3 Members 40 members — 38 jurisdictions + 2 regional organisations (EU Commission, GCC)
4 Core Standards 40 Recommendations covering AML, CFT, and WMD proliferation financing
5 Grey List Countries under "increased monitoring" — must address strategic deficiencies
6 Black List High-risk jurisdictions — subjected to counter-measures (currently: North Korea, Iran, Myanmar)
7 Mutual Evaluation Peer review of member countries' AML/CFT frameworks; India evaluated in 2024
8 India's Status "Regular Follow-up" category (highest rating) — next progress report due October 2027

Current Status / Latest Data

  • India's 2024 MER placed it in the "Regular Follow-up" category — the best possible outcome, indicating a robust AML/CFT framework.
  • India is not on the grey list and has never been on the grey or black list.
  • October 2025 Plenary: No countries added to grey list; four removed including Burkina Faso and South Africa.
  • India's next progress report to FATF is due by October 2027.
  • India's AML framework is anchored by the Prevention of Money Laundering Act (PMLA), 2002, enforced by the Enforcement Directorate (ED).
  • India also co-chairs the FATF-APG Joint Working Group on terrorist financing risks in the region.

UPSC Exam Corner

Prelims: Key Facts

  • FATF was founded in 1989 at the G7 Summit in Paris
  • Has 40 members (38 jurisdictions + EU Commission + GCC)
  • Issues 40 Recommendations as global AML/CFT standards
  • India joined FATF in 2010; placed in "Regular Follow-up" in 2024 MER
  • Grey List = increased monitoring; Black List = counter-measures (North Korea, Iran, Myanmar)

Mains: Probable Themes

  1. Evaluate India's AML/CFT framework in light of the 2024 FATF Mutual Evaluation
  2. Grey list implications — how being grey-listed affects a country's economy and global standing
  3. Role of FATF in combating terrorist financing — successes and limitations
  4. India's institutional mechanisms for FATF compliance (ED, FIU-IND, PMLA)
  5. Challenges of crypto-assets and virtual currencies for FATF's regulatory framework

Sources: FATF Official, FATF — India Country Page, Drishti IAS — FATF MER on India, PIB — India FATF Evaluation