NEW DELHI, Sept 19 (Askume) – Global anti-money laundering watchdog Financial Action Task Force (FATF) on Thursday urged India to speed up prosecution of financial fraud cases.
The 40-member FATF, established in 1989, in a report rated India’s effectiveness in “money laundering investigations and prosecutions” as “moderate”, while saying the country was compliant in most areas.
The report urged India to impose strict restrictions on cash transactions related to precious metals and gemstones as this could pose surveillance risks.
The task force sets global standards for national authorities to tackle illicit assets created through drug trafficking, illegal arms trade, cyber fraud and other serious crimes.
India became a member in 2010. The working group said in its report that the country was “compliant” and “largely compliant” on 37 of the 40 parameters assessed.
In a report on India released on Thursday, global regulators said the number of convictions in money laundering cases over the past five years has been affected by constitutional challenges and a saturated court system. Indian courts are facing a huge backlog of cases, many of which have been pending for years.
After the report was released, Treasury officials told reporters that the government was working to expedite prosecutions.
“The government now has a system of notifying special courts and we are engaging more prosecutors to expedite trials,” said Vivek Agarwal, deputy secretary in the finance ministry’s tax division.
He said that the steps taken by India in recent years have helped it achieve better ratings.
India’s anti-money laundering agency Enforcement Directorate has seized assets worth 9.3 billion euros ($10.4 billion) from suspected financial criminals in the past five years, but the amount seized ranges from $5 million to $1.5 million depending on the conviction, the report said.
“It is important for India to focus on these issues as the defendants await the findings of the trials and prosecutions in their cases,” the statement said.
Three areas of partial compliance include bank scrutiny of sources of funding for politicians and financial monitoring of nonprofits, non-financial businesses and professionals.
The report said countries should take steps to prevent the misuse of terrorist financing by the nonprofit sector and adopt a risk-based approach, including informing these organisations about potential risks.
The watchdog also said India faces threats of terrorist financing from activist groups in Jammu and Kashmir, as well as money laundering from illicit activities related to corruption, drug trafficking and cybercrime.
“India needs to end prosecutions and focus on convicting and imposing appropriate sanctions on those who finance terrorism,” the FATF statement said.
As part of its monitoring, the FATF conducted “regular tracking” of India, requiring it to submit progress reports every three years.
(1 USD = 0.8958 EUR)
