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NEW DELHI: A national risk assessment (NRA) is currently under way in which central agencies, including the Reserve Bank of India, have been tasked with evaluating sectors that are vulnerable to money laundering and terror financing.
The exercise has begun just ahead of the India’s mutual evaluation of the Financial Action Task Force (FATF), the Paris-based inter-governmental body that had recently retained Pakistan on its ‘Grey List’ following its non-compliance in taking actions against banned terrorist outfits and UN-designated terrorists, denying them access to its financial institutions and banks.
India’s own FATF assessment has been pending since 2019 and postponed twice. An internal assessment earlier had found lack of convictions in a large number of cases related to money laundering. Following this, the government had asked the ED and CBI among other agencies to file chargesheets in a time-bound manner and ensure convictions in cases where prosecution complaints have been filed.
The Central Economic Intelligence Bureau (CEIB), an arm of the finance ministry, has been closely coordinating with all the intelligence and enforcement agencies, including the RBI, to further improve the inter-agency cooperation and boost actions against suspicious entities engaged in money laundering.
The real estate and gems & jewellery sectors in particular are more prone to money laundering and have been high on the government’s agenda to prevent organised crime syndicates using its financial institutions to launder money and endanger the economy. Lakhs of shell firms have been deregistered by the government in the last few years after they were found engaged in money laundering with no real business activity involved.
The department of revenue in the finance ministry is the designated department to conduct NRA on money laundering and terror financing. According to sources, India’s mutual evaluation of the FATF has been postponed to sometime around May 2022.
Another area of concern for the Centre is the access of some terror outfits to international finances coming through the non-profit organisations (NPOs), particularly in the northeastern states and J&K. Last year, the CEIB had alerted banks, financial institutions and RBI-authorised money changers to keep a close watch on small deposits in dormant bank accounts and huge financial flows linked to some of these NPOs operating from these jurisdictions.
The exercise has begun just ahead of the India’s mutual evaluation of the Financial Action Task Force (FATF), the Paris-based inter-governmental body that had recently retained Pakistan on its ‘Grey List’ following its non-compliance in taking actions against banned terrorist outfits and UN-designated terrorists, denying them access to its financial institutions and banks.
India’s own FATF assessment has been pending since 2019 and postponed twice. An internal assessment earlier had found lack of convictions in a large number of cases related to money laundering. Following this, the government had asked the ED and CBI among other agencies to file chargesheets in a time-bound manner and ensure convictions in cases where prosecution complaints have been filed.
The Central Economic Intelligence Bureau (CEIB), an arm of the finance ministry, has been closely coordinating with all the intelligence and enforcement agencies, including the RBI, to further improve the inter-agency cooperation and boost actions against suspicious entities engaged in money laundering.
The real estate and gems & jewellery sectors in particular are more prone to money laundering and have been high on the government’s agenda to prevent organised crime syndicates using its financial institutions to launder money and endanger the economy. Lakhs of shell firms have been deregistered by the government in the last few years after they were found engaged in money laundering with no real business activity involved.
The department of revenue in the finance ministry is the designated department to conduct NRA on money laundering and terror financing. According to sources, India’s mutual evaluation of the FATF has been postponed to sometime around May 2022.
Another area of concern for the Centre is the access of some terror outfits to international finances coming through the non-profit organisations (NPOs), particularly in the northeastern states and J&K. Last year, the CEIB had alerted banks, financial institutions and RBI-authorised money changers to keep a close watch on small deposits in dormant bank accounts and huge financial flows linked to some of these NPOs operating from these jurisdictions.
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