{"id":36621,"date":"2023-07-31T08:42:00","date_gmt":"2023-07-31T03:12:00","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=36621"},"modified":"2025-04-21T23:28:48","modified_gmt":"2025-04-21T17:58:48","slug":"financial-action-task-force-fatf-how-delhi-hcs-recent-ruling-may-help-india-during-fatf-review","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/financial-action-task-force-fatf-how-delhi-hcs-recent-ruling-may-help-india-during-fatf-review\/","title":{"rendered":"Financial Action Task Force (FATF): How Delhi HC&#8217;s recent ruling may help India during FATF review"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>What is the Financial Action Task Force (FATF)?<\/strong><\/li>\n<li><strong>What is the Delhi HC\u2019s Verdict?<\/strong><\/li>\n<li><strong>How will the Delhi HC Verdict help India during FATF Review?<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>The Delhi high court&#8217;s ruling that US online gateway PayPal is a &#8220;reporting entity&#8221; under the anti-money laundering law may help India during the FATF review of its anti-black money regime.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>What is the Financial Action Task Force (FATF)?<\/strong><\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/9fElUM9pFTmTHtEkYBpjWNaZyQlkGj_zbMoeEveqf7OGJzCTKegeS_jnodH6Iz4JwCDXk5vv4E6gN6ulghv0QiB0iSZhsVVCatSKjQ3VvzDK6RRGqAkeVF90xScZMt9Bo73EaEC_xfUpwqfcAHDYBFw\" alt=\"\" \/><\/p>\n<ul>\n<li>It is an <strong>intergovernmental <\/strong>organisation founded in <strong>1989 <\/strong>to develop policies to combat <strong>money laundering<\/strong> and its mandate was expanded to include <strong>terror financing<\/strong> in 2001.<\/li>\n<li>It operates from Organisation for Economic Cooperation and Development (OECD) headquarters in <strong>Paris<\/strong> and its plenary\/ decision-making body meets three times per year.<\/li>\n<li><strong>It has 39 members including India <\/strong>(became observer in 2006 and a full-time member in 2010) and two regional organisations &#8211; the EU and GCC (Gulf cooperation council).<\/li>\n<li>FATF\u2019s mandate &#8211;\n<ul>\n<li><strong>Recognises the need to continue to lead decisive, coordinated and effective global action<\/strong> to counter the threats of the abuse of the financial system by criminals and terrorists, and<\/li>\n<li><strong>Strengthens its capacity<\/strong> to respond to these threats that all countries face.\u00a0\u00a0\u00a0\u00a0<\/li>\n<\/ul>\n<\/li>\n<li><strong>The FATF conducts peer reviews <\/strong>of each member on an ongoing basis to assess levels of implementation of the FATF Recommendations.\n<ul>\n<li><strong>It provides an in-depth description<\/strong> and analysis of each country&#8217;s system for preventing criminal abuse of the financial system.<\/li>\n<li><strong>India is currently under the FATF review.<\/strong> It last underwent a similar review in <strong>2013 <\/strong>where it was found that India had reached a satisfactory level of compliance with all of the core and key recommendations of the watchdog.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<figure class=\"media\">\n<div data-oembed-url=\"https:\/\/www.youtube.com\/watch?v=z4EMiESWOW4\">\n<div><iframe src=\"https:\/\/www.youtube.com\/embed\/z4EMiESWOW4\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<\/figure>\n<h2>\u00a0<\/h2>\n<h2><strong>What is the Delhi HC\u2019s Verdict?<\/strong><\/h2>\n<ul>\n<li><strong>It had set aside a penalty<\/strong> of Rs 96 lakh imposed on PayPal by the Financial Intelligence Unit (FIU) &#8211; India<strong> for alleged non-compliance with the reporting obligations <\/strong>under the law against money laundering.<\/li>\n<li>However, it ruled that PayPal was liable to be viewed as <strong>a payment system operator under the Prevention of Money Laundering Act (PMLA)<\/strong> and so <strong>has to comply<\/strong> with reporting obligations under the law.<\/li>\n<li><strong>The categorisation of PayPal as a reporting entity under the PMLA will ensure that &#8211;<\/strong>\n<ul>\n<li>All such big payment gateways and platforms are regulated and<\/li>\n<li>They share the stipulated suspicious transaction reports (STRs) and cross-border wire transfer reports with the FIU under the PMLA.<\/li>\n<li><strong>The FIU disseminates these reports <\/strong>to various probe agencies which investigate money laundering, tax evasion, and other serious financial frauds.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>How will the Delhi HC Verdict help India during FATF Review?<\/strong><\/h2>\n<ul>\n<li><strong>The judgement will help the FIU<\/strong> bring operations of about a dozen more such payment gateways under the &#8216;reporting entity&#8217; regime even as a number of payment gateways operating in the country are already reporting STRs to the FIU.<\/li>\n<li><strong>While the judgement may not give India additional points<\/strong> during the FATF review, it will surely underline that &#8211;\n<ul>\n<li>Indian anti-money laundering agencies are leaving no stone unturned.<\/li>\n<li>The country&#8217;s economic channels are clean and the risks of financial crimes are minimal.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>Q1) What is the Financial Intelligence Unit \u2013 India (FIU-IND)?<\/strong><\/h3>\n<p>FIU-IND is a central, national agency under the Department of Revenue, founded in 2004 to collect financial intelligence about offences under the Prevention of Money Laundering Act, 2002.<\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Q2) What is the Organisation for Economic Co-operation and Development (OECD)?<\/strong><\/h3>\n<p>OECD is an intergovernmental organisation (HQ &#8211; Paris, France) with 38 Member countries, founded in 1961 to stimulate economic progress and world trade. It is a forum whose member countries describe themselves as committed to democracy and the market economy.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/how-delhi-hcs-paypal-ruling-may-help-india-during-fatf-review\/articleshowprint\/102248598.cms?val=3728\" target=\"_blank\" rel=\"nofollow noopener\"><u>How Delhi HC&#8217;s PayPal ruling may help India during FATF review<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FATF is an intergovernmental organisation founded in 1989 to develop policies to combat money laundering and terror financing<\/p>\n","protected":false},"author":5,"featured_media":36622,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-36621","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/36621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=36621"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/36621\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/36622"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=36621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=36621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=36621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}