Russia’s membership suspended from the Financial Action Task Force (FATF)

Russia’s membership suspended from the Financial Action Task Force (FATF)

Recently, the global anti-money laundering watchdog Financial Action Task Force (FATF) suspended Russia’s membership on the one-year anniversary of its alleged invasion of Ukraine.

The Financial Action Task Force has said that the actions of the Russian Federation are not in line with the FATF’s core principles of promoting the safety, security and integrity of the global financial system.

However, the Paris-based FATF said Russia still remains accountable for its obligation to implement FATF standards.

South Africa and Nigeria included in the gray list

  • The FATF also announced the addition of South Africa and Nigeria to a “grey list” of countries under special scrutiny for implementing standards to prevent money laundering.
  • Inclusion in the gray list means that clients of financial institutions in these countries will be subject to intense monitoring by international banking and financial institutions.
  • Not only this, the countries included in this list will face difficulties in getting loans or borrowing from multilateral organizations and international financial institutions.
  • Gray listing of a country in the FATF list can spell havoc for a country’s economy as it discourages investment.

Financial Action Task Force (FATF)

  • FATF is the global money laundering and terrorist financing watchdog which was established in the year 1989 at the meeting held in Paris of G-7 countries.
  • FATF aims to combat threats such as money laundering, terrorist financing and promote the effective implementation of other legal, regulatory and operational measures for the integrity of the international financial system.
  • Its secretariat is located at the headquarters of the Organization for Economic Co-operation Development (OECD) in Paris.
  • Currently FATF consists of 39 member countries including India and 2 regional organizations (European Commission and Gulf Cooperation Council). India is a member of FATF since 2010.

FATF Lists:

  • Gray List: Countries that are considered safe havens for supporting Terror Funding and Money Laundering have been put on FATF’s Gray List. Inclusion in this list acts as a warning to the concerned country that it may be included in the blacklist.
  • Black List: Countries identified as Non-Cooperative Countries or Territories (NCCTs) are included in the Black List. These countries support terrorist funding and money laundering activities. The FATF revises this list regularly to add or remove countries.

Source – Indian Express

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