The Centre has nominated three senior IPS officers to make preparations ahead of India's evaluation by the Financial Action Task Force (FATF).
The Centre has written to the police departments of three states, asking them to nominate one officer each to oversee preparations for the Financial Action Task Force (FATF) evaluation of India. India had submitted to a mutual evaluation of the country's anti-money laundering regime and legal measures to check financial crimes by the FATF.
Slated to commence in 2020, this process was delayed owing to the Covid-19 pandemic. The mutual evaluation will be conducted by the Asia Pacific Group of the FATF.
India Today has learnt that at least three officers from different states have been selected to make preparations for the mutual evaluation for the year 2021-22. These officers are Himanshu Shukla, Deputy Inspector General of Police (ATS) from Gujarat, Ananya Gautam, Inspector General of Police (ATS) from Punjab and Mukesh Singh, IGP (Jammu).
The central government has now sought permission from the DGPs of Gujarat, Punjab and J&K to allow the three officers to assist in preparing framework for the FATF review.
In its letter to the DGPs of three states, the Centre has said that the Department of Revenue, Ministry of Finance in the Government of India is coordinating efforts ahead of India's mutual evaluation.
Sources say as a nodal agency, the Intelligence Bureau (IB) will play a key role in this regard.
The officers nominated by the states will be required to undergo training, participate in interviews, aid FATF during on-site visits and demonstrate the effectiveness of India's fight against terror. The whole process could take 14-18 months from beginning to end.
India may have to work on recommendations'
An official in North Block said, "All three officers have expertise on the subject. All have excellent knowledge and are articulate. While there were several states including Maharashtra and the North-East affected by left-wing extremism, the list has been constricted."
"There will be officials from agencies like ED and NIA as well. While India is not worried, it may have to work on at least two recommendations. Sources said news reports on various financial frauds involving terror financing and money laundering are the ones under the scanner," the official added.
The official told India Today on the condition of anonymity, "India will be asked about action-taken and cases being pursued. While IG Ananya Gautam has been the nodal officer in dealing with cases in Punjab, knowing the cases like the back of his hand, Mukesh Singh has intrinsic knowledge of FATF during his central deputation with the NIA."
Combating money laundering, terror financing, proliferation
An inter-governmental body with influence over 200 countries and jurisdictions, the FATF has 40 recommendations to fight money laundering and 11 immediate outcomes. In 2001, crippling terror financing was added to the FATF's agenda along with countering the proliferation of Weapons of Mass Destruction (WMDs).
During its mutual evaluation of India's legal framework relevant to the scope of inquiry, the FATF will inspect cases pertaining to money laundering, confiscation, terror financing, targeting financial sanctions related to terrorism. In addition, the FATF will also look at cases where terror financing has been linked to individuals with political influence and reporting of suspicious transactions
The FATF and India will then discuss measures to combat money laundering, terror financing and proliferation.
Headquartered in Sydney, the Asia/Pacific Group on Money Laundering (APG) is also likely to inspect whether enforcement agencies in India use FIU reports to probe money laundering and terror financing activities.
FIU compliance and STRs
In 2018, India's Financial Intelligence Unit (FIU) received more than 1.4 million STRs (Suspicious Transaction Reports).
FIU guidelines require financial institutions and intermediaries to file STRs to keep dirty money out of the financial system. The fact that more than a million STRs were filed in 2018 suggests the level of awareness among banking and other financial institutions in India.
Set up by the Government of India in 2004, the FIU conducts regular training to ensure compliance.
It is worth mentioning here that besides the United States, India is the only country in the world to have its own certification program with respect to laws pertaining to money laundering.
In 2008, an India-based agency introduced a Certified Anti-Money Laundering Expert program which enables Indian bankers to identify suspicious financial transactions. These certified members help financial institutions identify the legitimate source of money and analyse transactions that may seem suspicious.
The Enforcement Directorate (ED) has done significant work to counter money laundering operations in the country.
Pakistan's letter to FATF chief
In January of this year, Chairman of Pakistan's Senate Standing Committee on Interior Rehman Malik wrote to FATF President Dr Marcus Pleyer. In his letter, Rehman Malik, who has also served as Pakistan's interior minister, conveyed reservations on behalf of the country.
I would like to express my gratitude and appreciation that you, in your presser on 25th February 2021, committed that India is subject to [the] same rules as any other country and FATF will assess India as any other country when the time comes, which I have been urging in my previous letters that India should also be treated the same way," said Rehman Malik.
In February of this year, the FATF had decided to retain Pakistan in its grey list citing the country's failure to fulfill three key commitments made in its anti-terror-financing action plan.