In September 2023, Amnesty International published a scathing report titled “Weaponizing counter-terrorism: India’s exploitation of terrorism financing assessments to target civil society”, claiming Indian authorities of weaponizing Financial Action Task Force (FATF) recommendations to target civil society groups and activists, obstructing their work under the guise of combating terrorism. “Under the guise of combating terrorism, Indian government took advantage of the Financial Action Task Force’s recommendations to bolster its arsenal of financial and counter-terrorism laws, which are routinely misused to target and silence critics,” said Aakar Patel, Chair of the Board at Amnesty International India.
The FATF, founded in 1989 to combat money laundering and terrorist funding on a global level, is critical in creating standards and supporting the successful implementation of measures to protect the international financial system. However, it needs to be highlighted that the FATF’s mandate focuses primarily on preventing financial crimes, and any political consequences are frequently susceptible to interpretation. But there have been criticisms regarding its potential use as a political instrument. The issue here is that FATF’s standards and evaluations are being altered or selectively implemented by economic giants in order to penalise smaller economies. India, like any other country, is not immune to financial misconduct, with reports of tax evasion and large-sum transactions outside the legal system. In order to comply with FATF requirements, India allegedly made adjustments between 2010 and 2013. Following the sham adjustments, despite additional reports of human rights violations and legal violations, FATF granted India a good rating in 2013.
The current FATF on-site review of India is still going on, with results due in June 2024. Reports presented as part of the assessment by the Global NPO (non-profit organizations) Coalition provided FATF with a series of reports as part of the ongoing evaluation that shed spotlight on India’s crackdown drive on non-profit organizations and civil society activists. These reports are unfavourable to India as they explore India’s surge on the non-profit sector and civil society activists in the pretext of upholding legislation. The Amnesty International study emphasizes the ambiguity in implementing modifications passed between 2010 and 2013. Critical remarks include India’s inability to build a framework for reviewing its financial institutions and to perform a risk assessment of the non-profit sector for its vulnerability to terror funding, both of which were FATF recommendations from the 2010 evaluation reports.
Since 2013, over 20,000 NGOs have been shut down primarily on what Amnesty International deems “unproven” charges, and several examples of human rights violation have been documented. Activists from Jammu and Kashmir have been imprisoned on dubious terrorist allegations. These measures correspond with a tighter grip on dissent and human rights violations, which has been greatly exacerbated since the rise of the BJP, which already has a dismal record of human rights breaches and crimes against the journalist community.
International Isolation and Political Manipulation
The Amnesty International report not only throws light on India’s alleged abuse of FATF rules, but also reveals a complex geopolitical agenda. The report suggests that India is pursuing a dual strategy, pursuing permanent FATF membership while also intending to isolate Pakistan globally. This strategic approach complicates the assessment of India’s dedication to global anti-terrorism activities and calls into question the probable political objectives behind such initiatives. The report indicates that norms are selectively enforced, particularly when compatible with the goals of powerful states. This dynamic raises questions about legitimacy and efficacy of global organizations such as the FATF. Are norms applied consistently, or do they flex in response to geopolitical alignments? India’s purported dual strategy highlights the need for more openness and accountability at the global scale.
Additionally, India, which claims to be among world’s largest economies by 2027 with GDP is projected to reach $4.2 trillion by 2024, provides an intriguing dilemma in the context of global financial governance. As a rising superpower, India’s worldwide impact and economic prowess, particularly in comparison to second-world economic giants like China, appear to place it in a league of its own. However, India’s apparent absence from FATF’s radar raises alarm bells.
India’s Potential Areas of Scrutiny
As FATF reviews India, potential areas of investigation include India’s role as a betting and gambling hotspot, current assessments into the Adani Group, and the cross-border operations of the Rashtriya Swayamsevak Sangh (RSS) and its related mobilization of funds. This component adds a geopolitical dimension to the scrutiny, stressing the need of determining if such operations are in accordance with international standards and rules. Examining the financial flows related with the RSS’s cross-border operations will be critical in establishing how well these activities conform with global norms and expectations.
Amnesty International report calls for a more thorough investigation into India’s suspected abuse of FATF guidelines, putting light on the potentially political character of international organizations involved in countering money laundering and terror funding. By shining light on the alleged exploitation of these guidelines, it urges a critical examination of whether the implementation of global financial norms is susceptible to political manipulation. The report’s complexities highlight the need for an in-depth investigation of the motivations driving nations’ compliance with these norms, as well as the possible consequences for civil society and action in India.
To conclude, it can be asserted that FATF provisions should be applied indiscriminately towards all nations. Currently, it appears that provisions of FATF are applied in a selective manner. It is in fact used as a political instrument to coerce certain developing nations economically in pursuance of targeted objectives. Notwithstanding above, FATF’s wheeling dealing with heavy weights like India, must not get affected by the geopolitical heft of a country. Instead, FATF should exhibit same vehemence, without attempting to lessen the gravity of misappropriation. If global economic system has been managed/ hoodwinked, tax laws have been circumvented or money has been laundered by Indian Government or any of its business tycoons, FATF laws should bring those to fore. That is the essence of liberal economic order at the global level.
