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With reference to 'Financial Action Task Force (FATF)’, consider the following statements:
1. It is global money laundering and terrorist financing watchdog.
2. It is an inter-governmental organization established by G7 countries.
3. India is member of Financial Action Task Force.
Which of the statements given above is/are correct?
1. It is global money laundering and terrorist financing watchdog.
2. It is an inter-governmental organization established by G7 countries.
3. India is member of Financial Action Task Force.
Which of the statements given above is/are correct?
- a)1 only
- b)1 and 2 only
- c)2 and 3 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
With reference to Financial Action Task Force (FATF)’, consider ...
- The FATF is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. Hence statement 1 is correct.
- It was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering. Hence statement 2 is correct.
- It currently comprises 37 member countries (including India) and 2 regional organizations- European Commission and Gulf Co-operation Council. Hence statement 3 is correct.
- Role of FATF in combating terrorist financing:
- Setting global standards to combat terrorist financing.
- Evaluating countries’ ability to prevent, detect, investigate and prosecute the financing of terrorism: FATF issues two lists namely-
- Black list (officially known as High-Risk Jurisdictions subject to a Call for Action)
(i) It sets out the countries that are considered deficient in their anti-money laundering and counterfinancing of terrorism (AML/CFT) regulatory regimes,
(ii) These blacklisted countries are subjected to economic sanctions and other prohibitive measures by FATF member states and other international organizations,
(iii) The current FATF blacklist includes two countries: North Korea and Iran. - Grey list (officially referred to as Jurisdictions Under Increased Monitoring)
(i) Countries on the FATF grey list represent a much higher risk of money laundering and terrorism financing but have formally committed to working with the FATF to develop action plans that will address their AMF/CFT deficiencies,
(ii) These countries are subjected to increased monitoring by the FATF.
(ii) While grey-list classification is not as negative as the blacklist, countries on the list may still face economic sanctions from institutions like the IMF and the World Bank and experience adverse effects on trade. - Assisting jurisdictions in implementing financial provisions of the United Nations Security Council resolutions on terrorism
Most Upvoted Answer
With reference to Financial Action Task Force (FATF)’, consider ...
The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 to combat money laundering and the financing of terrorism. It sets international standards and promotes effective implementation of legal, regulatory, and operational measures to combat money laundering, terrorist financing, and other threats to the integrity of the international financial system.
FATF consists of 39 member countries and jurisdictions, including major financial centers and developing economies. It also collaborates with various international organizations and regional bodies. FATF's recommendations, known as the FATF Recommendations, provide a comprehensive framework for combating money laundering and terrorist financing.
The main objectives of FATF are:
1. Setting global standards: FATF develops and promotes global standards for anti-money laundering (AML) and combating the financing of terrorism (CFT). These standards are widely recognized and implemented by countries and jurisdictions around the world.
2. Evaluating and monitoring compliance: FATF conducts mutual evaluations of member countries' and jurisdictions' compliance with the FATF Recommendations. It assesses their legal and institutional frameworks, regulatory systems, and effectiveness in combating money laundering and terrorist financing.
3. Identifying and addressing emerging threats: FATF continuously monitors the evolving threats and vulnerabilities related to money laundering and terrorist financing. It issues guidance and recommendations to help member countries and jurisdictions address these threats effectively.
4. Promoting international cooperation: FATF encourages international cooperation among its member countries and jurisdictions, as well as with other relevant international organizations. It facilitates information exchange, technical assistance, and capacity building to enhance the effectiveness of AML/CFT measures worldwide.
The FATF has been successful in promoting international cooperation and improving the global AML/CFT framework. Its work has led to increased awareness, strengthened legal frameworks, and enhanced international cooperation in combating money laundering and terrorist financing. However, the evolving nature of financial crimes and emerging technologies pose ongoing challenges that FATF continues to address through its regular updates and guidance.
FATF consists of 39 member countries and jurisdictions, including major financial centers and developing economies. It also collaborates with various international organizations and regional bodies. FATF's recommendations, known as the FATF Recommendations, provide a comprehensive framework for combating money laundering and terrorist financing.
The main objectives of FATF are:
1. Setting global standards: FATF develops and promotes global standards for anti-money laundering (AML) and combating the financing of terrorism (CFT). These standards are widely recognized and implemented by countries and jurisdictions around the world.
2. Evaluating and monitoring compliance: FATF conducts mutual evaluations of member countries' and jurisdictions' compliance with the FATF Recommendations. It assesses their legal and institutional frameworks, regulatory systems, and effectiveness in combating money laundering and terrorist financing.
3. Identifying and addressing emerging threats: FATF continuously monitors the evolving threats and vulnerabilities related to money laundering and terrorist financing. It issues guidance and recommendations to help member countries and jurisdictions address these threats effectively.
4. Promoting international cooperation: FATF encourages international cooperation among its member countries and jurisdictions, as well as with other relevant international organizations. It facilitates information exchange, technical assistance, and capacity building to enhance the effectiveness of AML/CFT measures worldwide.
The FATF has been successful in promoting international cooperation and improving the global AML/CFT framework. Its work has led to increased awareness, strengthened legal frameworks, and enhanced international cooperation in combating money laundering and terrorist financing. However, the evolving nature of financial crimes and emerging technologies pose ongoing challenges that FATF continues to address through its regular updates and guidance.
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With reference to Financial Action Task Force (FATF)’, consider the following statements:1. It is global money laundering and terrorist financing watchdog.2. It is an inter-governmental organization established by G7 countries.3. India is member of Financial Action Task Force.Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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With reference to Financial Action Task Force (FATF)’, consider the following statements:1. It is global money laundering and terrorist financing watchdog.2. It is an inter-governmental organization established by G7 countries.3. India is member of Financial Action Task Force.Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Financial Action Task Force (FATF)’, consider the following statements:1. It is global money laundering and terrorist financing watchdog.2. It is an inter-governmental organization established by G7 countries.3. India is member of Financial Action Task Force.Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Financial Action Task Force (FATF)’, consider the following statements:1. It is global money laundering and terrorist financing watchdog.2. It is an inter-governmental organization established by G7 countries.3. India is member of Financial Action Task Force.Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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