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by Sudhanshu Roy 22 October 2023
In November 2023, India is poised for a mutual review conducted by the Financial Action Task Force (FATF), an international body tasked with developing and monitoring recommendations aimed at curbing illicit financial flows and disrupting the funding of terrorist organizations. India became a full-fledged member of the FATF in 2010 and has since adopted various legal and regulatory measures to align itself with the FATF’s 40 guidelines and nine special recommendations. However, questions have arisen regarding India’s approach to implementing these recommendations, particularly in terms of its adherence to human rights and democratic principles. According to the latest consolidated assessment scores from the FATF, India’s compliance with FATF guidelines presents a mixed picture. Among the 40 technical compliance indicators, India received a compliant rating on 15, a substantially compliant rating on 21, a somewhat compliant rating on 3, and a non-compliant rating on 1. This non-compliant indicator pertains to issues related to the transparency and beneficial ownership of legal arrangements, suggesting that India has not taken adequate steps to prevent the exploitation of trusts and other legal structures for money laundering or the financing of terrorism.
In terms of effectiveness metrics, India has demonstrated a significant degree of effectiveness on four out of the eleven metrics, a moderate level of effectiveness on five, and a low level of effectiveness on two. Notably, the areas of low effectiveness are linked to the investigation and prosecution of offenses related to terrorist financing, as well as the enforcement of targeted financial sanctions against the proliferation of financing. This implies that India has not yet demonstrated a robust ability to effectively detect, investigate, and prosecute terrorist financing activities or impose sanctions on entities involved in the proliferation of weapons of mass destruction.
Moreover, concerns have been raised regarding the Indian government’s utilization of FATF guidelines to suppress civil society organizations and journalists critical of its policies and actions. Laws such as the Unlawful Activities Prevention Act (UAPA), the Prevention of Money Laundering Act (PMLA), and the Foreign Contribution Regulation Act (FCRA) have been employed to intimidate, detain, and prosecute activists, academics, lawyers, students, and media professionals under broad charges encompassing terrorism, sedition, money laundering, and foreign funding. These measures have effectively silenced dissenting voices, curtailed opposition, and violated fundamental rights such as freedom of expression, association, and assembly.
Aakar Patel, the head of Amnesty International India, has pointed out that the Indian government has strategically used FATF guidelines to target civil society organizations and individuals who criticize the government and its policies. This has resulted in the harassment, arrests, and prosecution of human rights advocates, journalists, scholars, students, and others who oppose the agenda of the ruling Bharatiya Janata Party (BJP). Furthermore, the actions of the Indian government reflect a broader failure to protect minority communities, particularly Muslims and Sikhs, from attacks by BJP officials and followers who unjustly label them as anti-national and sympathizers of terrorism. The government has also suppressed peaceful demonstrations by Muslims protesting discriminatory citizenship laws and farmers protesting new agricultural regulations, often accusing them of conspiring against national interests and having ties to separatist organizations.
In regions where protests have occurred, including Kashmir, Delhi, and Punjab, the government has resorted to blocking access to information and communication technologies, such as the internet and mobile phones. Online monitoring and censorship have been used to control the flow of information and ideas on social media platforms like Twitter and Facebook. Additionally, the government has exerted pressure on these platforms to remove or restrict content critical of the government or its policies, as well as content supporting demonstrators or minority groups. The Indian government’s handling of minority issues and the increase in hate crimes against these communities carry significant implications for the upcoming FATF review scheduled for November. To navigate this review effectively, India must demonstrate its unwavering commitment to combating money laundering and terrorism financing while also upholding human rights and democratic values. India should take substantive actions to address deficiencies in its compliance with FATF recommendations and ensure that its laws and policies do not disproportionately target civil society and journalists or infringe upon the rights of minorities and protesters.
It is imperative for India to actively engage with the FATF and its peer countries to enhance its performance and embrace constructive feedback and recommendations. Upholding constitutional rights, including freedom of the press, the right to assemble, and the protection of minority rights, is crucial not only for maintaining its FATF membership but also for fulfilling its responsibilities as a responsible member of the international community. India should faithfully adhere to FATF recommendations, both in letter and spirit, without misusing them to stifle criticism. This approach will play a pivotal role in promoting regional stability and security and preventing terrorism and extremism in South Asia.