Context:

The Financial Action Task Force (FATF), the international apex anti-terror financing watchdog, has taken a significant step by including a separate section on state-sponsored terrorism in its report. This development reinforces India's position on Pakistan's role in terror financing, which India has been highlighting since 2022.

Key Findings of the FATF Report:

·        State-sponsored terrorism: The report notes that certain terrorist organizations have received financial and other forms of support from national governments, which is a longstanding threat to international peace and security.

·        Funding patterns of LeT and JeM: The report highlights the funding patterns of Pakistan-based Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), which are designated as terrorist organizations by the United Nations.

Implications for India:

The FATF report's findings have significant implications for India, particularly in the context of its relations with Pakistan. The report's acknowledgment of state-sponsored terrorism and the funding patterns of LeT and JeM reinforces India's position on Pakistan's role in terror financing.

India's Efforts to Highlight Pakistan's Role in Terror Financing

India has been consistently highlighting Pakistan's role in terror financing, and the FATF report's findings are a significant boost to India's position.

In 2022, India identified state-sponsored terrorism from Pakistan as a source of terrorist financing risk in its money laundering and terrorist financing risk assessment.

Definition of Terrorism:

Terrorism is generally defined as the use of violence or intimidation to achieve political, ideological, or social goals. The UN has struggled to define terrorism, but it has acknowledged that it involves acts intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing any act.

About Financial Action Task Force (FATF):

The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 to combat money laundering and terrorist financing. It develops and promotes policies to protect the global financial system from these threats. FATF monitors its members' progress in implementing these policies and assesses countries' efforts to combat money laundering and terrorist financing. 

FATF's Role:

·        Setting Standards: Develops global AML/CFT standards through its FATF Recommendations covering due diligence, suspicious transaction reporting, and cooperation.

·        Monitoring Compliance: Conducts mutual evaluations to assess how effectively countries implement these standards.

·        Listing Non-Compliant Jurisdictions: Publishes blacklist (high-risk) and greylist (under monitoring) to push reforms in weak AML/CFT regimes.

·        Supporting Implementation: Provides technical assistance, training, and guidance to help countries improve their systems.

·        Global Cooperation: Partners with bodies like the UN, IMF, and World Bank to enhance international collaboration and information sharing.

·        Adapting to New Threats: Updates standards to address emerging risks like virtual assets, crowdfunding, and evolving terrorist financing trends.

Conclusion:

The FATF report's inclusion of a separate section on state-sponsored terrorism is a significant development that reinforces India's position on Pakistan's role in terror financing. The report's findings highlight the need for international cooperation to address the threat of state-sponsored terrorism and the importance of holding countries accountable for their role in supporting terrorist organizations.