In November 2023, India is set to undergo a mutual assessment by the Financial Action Task Force (FATF) to evaluate its adherence to the global standards for fighting money laundering and terrorism financing. The FATF is a worldwide organization that develops and oversees recommendations for its 39 member countries to disrupt illegal financial flows and prevent funding to terrorist groups. This audit will determine the extent to which India has adopted effective measures to combat money laundering and terrorism financing. Despite being a full member of the FATF since 2010, India’s implementation of its 40 guidelines and nine special recommendations has been called into question, with concerns raised over the country’s commitment to human rights and democratic values.
The FATF is a multinational organization that monitors and combats money laundering and terrorism financing. In November 2023, the FATF is scheduled to review India’s anti-money laundering and counter-terrorism funding policies to assess how well the country has implemented FATF recommendations in its laws and practices.
The Indian government’s actions have prompted worries about its inability to safeguard minority populations, particularly Muslims and Sikhs, against violence by BJP leaders and their supporters. These minorities are frequently labelled as anti-national and terrorist sympathizers, putting them at risk. In addition, the government has crushed peaceful rallies organized by Muslims against the discriminatory citizenship law and farmers against new agricultural restrictions. These demonstrators have been falsely accused of planning against national interests and of having links to separatist organizations.
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The government has put limitations on information and communication technologies, including internet and mobile phone access, in areas where these demonstrations have occurred, including Kashmir, Delhi, and Punjab. Furthermore, internet surveillance and censorship have been used to control information and ideas on social media platforms such as Twitter and Facebook. The government has put pressure on these platforms to delete or prevent anything critical of the government or its policies, as well as content that supports protesters or minority populations. These acts have sparked worries about the country’s freedom of expression and human rights. All these factors will influence the result of the FATF review.
The outcome of the evaluation could significantly affect India’s reputation and economic ties with other countries, particularly those who are members of FATF. A favorable decision could enhance India’s image and make it a more attractive partner for trade and investment. However, in case of an unfavorable verdict, India may face penalties or stricter monitoring from FATF and other global organizations.
The evaluation of India could be influenced by its relationship with Canada, which is also a member of FATF. Recently, the relationship between the two nations has been tense due to the assassination of Hardeep Singh Nijjar, a Canadian citizen and Sikh separatist leader. Canada has accused India of being complicit in his assassination, while India denies any involvement. This disagreement has led to diplomatic expulsions, visa bans, and protests by Sikh organizations in Canada.
The ongoing dispute between India and Canada could have serious consequences for India’s review at the FATF if Canada decides to raise the issue or influence other members to question India’s actions. Moreover, Canada could use its position as a major donor and ally of Afghanistan to pressure India on its support for the Afghan government, which is another area of concern for the FATF. However, India has the option to resolve the matter through dialogue and cooperation with Canada or seek support from other friendly countries such as the US, UK, France, and Germany at the FATF.
The dismissal of a Canadian diplomat by India and the ongoing diplomatic dispute over the deaths of Sikh leaders could have a significant impact on the FATF examination. Reports indicate that India is considering reporting Canada’s inactivity on terror funding to the FATF, claiming that Canada is providing a haven for Khalistani separatists who pose a threat to India’s security and sovereignty. India plans to submit a dossier of information to the FATF to pressure Canada to act against terrorism on its land.
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However, this strategy could potentially backfire on India as Canada may respond by raising concerns about India’s own compliance with FATF standards and recommendations. Canada could also use its influence and relationships with other FATF members, including the US, UK, France, Germany, and Australia, to challenge India’s performance and credibility during the review. Furthermore, Canada could leverage its position as a major donor and partner of Afghanistan to criticize India’s support for the Afghan government, which is another area of concern for the FATF. Overall, this issue will further escalate and the FATF review due in November will have implications for India, both regionally and globally.