THE global financial system is at risk due to money laundering, terrorist financing, and the financing of weapons of mass destruction proliferation. These illegal activities fillip militancy, insurgencies and terrorism, causing destruction and chaos for the accomplishment of vested political agendas of states and non-state actors. The Financial Action Task Force (FATF), an intergovernmental organization, acts as a worldwide watchdog, establishing international rules to avoid such illicit activity. FATF’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) frameworks set critical principles for mobilizing political will and a country’s regulatory changes.

The FATF’s capacity to detect flaws in the financial systems of nations under enhanced scrutiny, sometimes known as the “grey list,” enables it to urge governments to rectify strategic inadequacies. Compliance with FATF recommendations is critical for nations under examination, necessitating prompt and comprehensive responses to protect their economies and worldwide reputations. The FATF issued its Mutual Evaluation Report on India in September 2024, citing severe inadequacies in the country’s anti-money laundering (AML) and counter-terrorist financing (CFT) regimes. Following a comprehensive evaluation in June 2024, key issues highlighted include prosecution delays, insufficient oversight of non-profit........

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