The FATF.
Credit: Reuters File Photo
New Delhi: Global anti-money laundering and terror financing watchdog Financial Action Task Force (FATF) has praised India's efforts in tackling illicit finance but warned the country of serious threats from Islamic State and Al-Qaeda-linked groups operating in and around Jammu and Kashmir.
In its latest edition of 'Mutual Evaluation Report' on combating money laundering and terror financing released on Thursday, the Paris-headquartered FATF said India has demonstrated its ability to conduct complex financial investigations but it needs to focus on concluding the prosecutions.
The global watchdog has placed India in the highest-ranked 'regular follow-up' category. Only a few major countries are in this category. "UK, France and Italy are among the only G20 countries which have been placed in this category apart from India," said Vivek Aggarwal, Additional Revenue Secretary in the Ministry of Finance.
The 368-page report also mentioned Manipur, which has been witnessing ethnic violence Since May 2023. The task force said a "sudden rise" in terrorist-financing investigations was seen in 2023, attributing it to events arising out of Manipur.
The report categorised the range of terrorism threats in India into six different theatres.
"These can be summarised as theatres associated with ISIL or Al-Qaeda-linked extremist groups active in and around Jammu and Kashmir, whether directly or via proxies or affiliates," it said.The report further said regional insurgencies in the northeast and north of India and left-wing extremist groups seeking to overthrow the government are the other terrorist threats for the country.
The report also mentioned terror-financing and money-laundering cases like the multi-agency probe against the now-banned Popular Front of India (PFI) and a 2017 case lodged by the NIA, involving the All Party Hurriyat Conference in Jammu and Kashmir.
It also described the investigation of agencies in some complex cases, including a bank-loan fraud involving fugitive diamantaire Nirav Modi and liquor baron Vijay Mallya, one against former Delhi minister and AAP leader Satyendar Jain and another involving the Mahadev online "illegal" betting app.
"India's main sources of money laundering originate from within India, from illegal activities committed within the country. These proceeds may be laundered within India, laundered abroad or laundered abroad and returned to India for re-integration into the licit economy," the FATF said.
(With PTI input)