India has achieved a high level of technical compliance across the Financial Action Task Force (FATF) recommendations and has taken significant steps to implement measures to tackle illicit finance. Nevertheless, the intergovernmental agency’s report says it is critical that the country continues to improve its system as its economy and financial system continue to grow, in particular ensuring that money laundering and terrorist financing trials are completed and offenders are subject to appropriate sanctions; and taking a risk-based and educative approach with non-profit organisations.
India is the largest country in the world by population and has the largest diaspora. It is a lower-middle income country with one of the world’s fastest-growing economies that is currently the world’s fifth largest economy. India’s main money laundering risks originate from illegal activities within the country; these risks relate primarily to fraud, including cyber-enabled fraud, corruption and drug trafficking.
India pursues money laundering related to fraud and forgery in line with predicate crime risks to a large extent, but less so with some other offences such as human trafficking and drug trafficking. According to the report, the country needs to address the backlog of money laundering cases pending conclusion of court processes.
India faces serious terrorism and terrorist financing threats, including those related to ISIL or al-Qaeda. India has a strong emphasis on disruption and prevention and has demonstrated its ability to conduct complex financial investigations. However, the report says India needs to focus on concluding the prosecutions and convict and appropriately sanction terrorist financiers.
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