In the realm of global finance and counter-terrorism efforts, recent revelations concerning India’s conduct have ignited profound concerns regarding the state of civil liberties within the nation. As the Financial Action Task Force (FATF) proceeds with its Mutual Evaluation Review (MER) of India, disturbing reports have emerged, indicating a deliberate exploitation of laws targeting non-profit organizations (NPOs) and a blatant disregard for international standards. It is imperative for the FATF to take decisive measures against India to ensure accountability for its alleged significant financial irregularities and infringements on civil liberties.
The Global NPO Coalition on FATF has submitted a comprehensive report to the FATF, revealing a disturbing narrative. It suggests that India has utilized FATF recommendations ostensibly aimed at combating terrorism to suppress non-profit organizations. 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 amended, purportedly to address corruption but have instead been wielded to restrict civic space and curtail freedom of expression, association, and peaceful assembly.
One of the primary allegations pertains to India’s failure to adhere to FATF standards outlined in the 2010 MER. The report underscores India’s failure to conduct a comprehensive assessment of its financial institutions and its neglect in conducting a detailed risk assessment of the Non-Profit Organization (NPO) sector for terrorist financing, despite recommendations. Instead, India has adopted a blanket approach, targeting the entire NPO sector without a nuanced understanding of associated risks. Moreover, the report alleges that India has engaged in significant financial irregularities, amounting to approximately $674.9 million in terror financing from 2009 to 2018. These purported actions not only contravene FATF standards but also violate international human rights laws. The exploitation of financial and counter-terrorism laws to suppress opposition leaders and civil society is particularly concerning.
India’s banking institutions have been implicated in withholding funds from beneficiary organizations, citing government-flagged security concerns. This has adversely affected numerous domestic NGOs, including those with full regulatory clearance, such as FCRA certification. Central agencies like the Enforcement Directorate, the Central Bureau of Investigation, and the National Investigating Agency (NIA) stand accused of political motivation and misuse to target opposition leaders and civil society. The statistics are staggering, with over 6,000 cases registered by the Enforcement Directorate, but only 25 proceeding to trial. The exponential increase in cases handled by the Enforcement Directorate since the 2010 MER raises questions about the misallocation of resources for political purposes rather than genuine commitment to combating financial irregularities.
The upcoming plenary discussion in June 2024 presents a critical juncture for the FATF to address India’s actions. The MER must transcend a routine assessment; it should serve as 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 identified specific areas where India must rectify shortcomings, including the 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 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, raising questions about stifling dissent and curbing activities of reputable organizations that contribute to public discourse.
In a seminar titled “Unveiling the Future – FATF’s Impact on South Asia 2023,” speakers underscored a concerning nexus between crime and Indian politics, urging 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 believed to have ties with India’s intelligence agency RAW’s terrorist network. The FATF cannot overlook the potential ramifications of state-sponsored terrorism on regional stability. Pakistan has expressed its resolve to resist any India-sponsored terrorist agenda, enacting the Digital Personal Data Protection Act, 2023, to provide limited data protections to users while expanding government powers for online surveillance. Proposed criminal laws with broad provisions criminalizing threats to sovereignty and national security raise concerns about further erosion of civil liberties.
As the FATF evaluates India’s compliance, it must transcend mere technical assessment and consider broader implications for civil liberties. Enhanced due diligence is imperative, with counter-measures applied in serious cases to protect the international financial system from risks emanating from India. The FATF’s role in safeguarding financial integrity and fundamental rights is paramount for democratic societies. It’s time for the FATF to take robust action and hold India accountable for its actions.