by Sudhanshu Roy 1 February 2024
In the realm of global finance and counter-terrorism efforts, the recent revelations surrounding India’s conduct raise serious concerns about civil liberties within the country. As the Financial Action Task Force (FATF) undertakes its Mutual Evaluation Review (MER) of India, disturbing reports have emerged, suggesting a deliberate weaponization of laws against non-profit organizations (NPOs) and a blatant disregard for international standards. The FATF must take decisive action against India to hold it accountable for its alleged gross financial anomalies and violations of civil liberties.
The Global NPO Coalition on FATF unveils a troubling narrative in a comprehensive report submitted to the FATF. It suggests that India has exploited FATF recommendations under the guise of combating terrorism to stifle non-profit organizations. Draconian laws, such as the Foreign Contribution (Regulation) Act (FCRA), the Unlawful Activities (Prevention) Act (UAPA), and the Prevention of Money Laundering Act (PMLA), have been introduced or adapted, allegedly to combat corruption but, in reality, have been used to restrict civic space and curtail freedom of expression, association, and peaceful assembly. One of the key allegations is India’s failure to comply with the FATF standards outlined in the 2010 MER. The report highlights that India did not conduct a comprehensive assessment of its financial institutions, and despite recommendations, it has not undertaken a detailed risk assessment of the Non-Profit Organization (NPO) sector for terrorist financing. Instead, India has adopted a one-size-fits-all approach, targeting the entire NPO sector without a nuanced understanding of the associated risks.
Furthermore, the report claims that India has committed gross financial anomalies, amounting to approximately $674.9 million in terror financing from 2009 to 2018. These alleged actions not only defy FATF standards but also violate international human rights laws. The utilization of financial and counter-terrorism laws as a tool to suppress opposition leaders and civil society is particularly alarming. India’s banking institutions have been implicated in withholding funds from beneficiary organizations, citing government-flagged security concerns. This has affected numerous domestic NGOs, even those with full regulatory clearance, including FCRA certification. Central agencies like the Enforcement Directorate, the Central Bureau of Investigation, and the National Investigating Agency (NIA) are accused of being politically motivated and misused to target opposition leaders and civil society.
The statistics are staggering, with over 6,000 cases registered by the Enforcement Directorate, but only 25 have gone to trial. The exponential increase in cases handled by the Enforcement Directorate since the 2010 MER raises questions about the misuse of resources for political purposes, rather than a genuine commitment to combating financial irregularities. The upcoming plenary discussion in June 2024 is a critical moment for the FATF to address India’s actions. The MER should be more than a routine assessment; it should be an opportunity for the FATF to take a stand against the erosion of civil liberties in India. The global community cannot turn a blind eye to India’s alleged violations of both FATF standards and international human rights law.
The FATF has outlined specific areas where India must address shortcomings, including criminalization of money laundering and terrorist financing, Customer Due Diligence (CDD) obligations, reliability of identification documents, and effectiveness of the Suspicious Transaction Report (STR) reporting regime. India must be held accountable for its actions and be urged to implement necessary reforms to align with international standards.
The recent revocation of the FCRA registration of the Center for Policy Research (CPR), a leading think tank in Delhi, adds another layer to the concerns. The government alleges that CPR directed FCRA funds towards litigation and protests related to development projects. This move raises questions about the government’s intent to stifle dissent and curtail the activities of reputable organizations that contribute to public discourse. In a seminar titled “Unveiling the Future – FATF’s Impact on South Asia 2023,” speakers highlighted a concerning nexus between crime and Indian politics, calling for strict scrutiny of India’s involvement in state-terrorism, drug trade, and illegal weapons. The recent surge in terrorist events, including the Tirah valley attack, is suggested to have links with India’s intelligence agency RAW’s terrorist network. The FATF cannot overlook the potential ramifications of state-sponsored terrorism and its impact on regional stability.
Pakistan, in particular, has expressed its determination to resist any India-sponsored terrorist agenda. The government has enacted the Digital Personal Data Protection Act, 2023, providing limited data protections to users but expanding government powers for online surveillance. Additionally, proposed criminal laws with broad provisions criminalizing threats to sovereignty and national security raise concerns about the further erosion of civil liberties. As the FATF evaluates India’s compliance, it must go beyond a mere technical assessment and consider the broader implications for civil liberties. Enhanced due diligence is necessary, and in the most serious cases, counter-measures should be applied to protect the international financial system from the risks emanating from India. The FATF cannot afford to ignore its role in safeguarding not only financial integrity but also the fundamental rights and freedoms that form the bedrock of democratic societies.
In conclusion, the international community, through the FATF, must take a strong stance against India’s alleged violations. The erosion of civil liberties and the weaponization of laws against NPOs demand urgent attention. The FATF has a crucial role to play in ensuring that India adheres to international standards, not only in combating financial crimes but also in safeguarding the democratic principles that underpin a just and free society. It’s time for the FATF to make hard decisions and hold India accountable for its actions.