Syllabus |
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Topics for Prelims |
Financial Action Task Force (FATF) |
Topics for Mains |
GS Paper II- International Relations (FATF's role as an inter-governmental body and its influence on global financial systems makes it a relevant topic for "International Relations".) GS Paper III- Internal Security and Economy (FATF's focus on combating money laundering and terrorist financing falls under the "Internal Security" section, specifically regarding threats to the financial system.) |
The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 by the Group of Seven (G7) on the sidelines of the G7 Summit held in Paris. The body is initially tasked to formulate policies to prevent anti-money laundering activities. Later, it was additionally invested with similar powers to prevent the financing of terrorist activities. The headquarters of the body is located in Paris, France.
The FATF upsc is a topic relevant to the UPSC CSE context under General Studies Paper II and General Studies Paper III. It is a basic topic for aspirants which helps to understand the dynamic aspect of the FATF upsc. The financial action task force upsc is an important topic for UPSC Civil Services because it highlights the internal security, international relations and economy, which are frequently discussed in the exam. Join UPSC Coaching today to boost your preparation.
In this article, we shall discuss FATF and its historical background.Questions related to FATF full form, FATF blacklist, and FATF country list often come in UPSC exams. We shall also have an insight into its objectives and member countries and discuss its role in the economy and curbing Anti-money laundering activities for the UPSC Exam.
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The Financial Action Task Force (FATF) condemned the April 22 terror attack in Pahalgam, highlighting that the Pahalgam attack and others could not take place without “money and funds" from terror supporters. FATF emphasizes the need for countries to strengthen efforts against terror financing. India plans to present evidence of Pakistan's involvement in terror financing at upcoming FATF meetings. |
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The FATF full form is Financial Action Task Force. Financial Action Task Force (FATF) is an international body formed in 1989 by the Group of Seven (G7) member states with the aim of preventing cases of anti-money laundering and financing terrorist activities. Its headquarters is located in Paris, France. It aims to generate the necessary political will to bring about reforms in the national legislative and regulatory reforms to prevent money laundering and financing of terrorist activities.
Read more about the European Union from the link below!
The Financial Action Task Force (FATF) was formed at the 1989 G7 Summit in Paris to combat the growing problem of money laundering. The task force was charged with studying money laundering trends, monitoring legislative, financial, and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations and standards to combat money laundering.
Also, read about the United Nations Security Council from the link provided!
The objectives of the Financial Action Task Force (FATF) are to set standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. Financial Action Task Force (FATF) is a "policy-making body" that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. The objectives of Financial Action Task Force (FATF) are:
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As of 2025, the Financial Action Task Force (FATF) currently comprises 38 member jurisdictions and two regional organisations, this totals to 40 members. It represents most major financial centres in all parts of the globe. There are 38 nation-states and two regional organizations that are part of the Financial Action Task Force (FATF). They are:
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The body, on assessment of the country's progress in implementing the Financial Action Task Force (FATF) Recommendations, identifies a list of nation-states that fail to take steps to prevent money laundering and terror financing. These publications are referred to as Blocklist and Grey list countries.
These countries are termed high-risk jurisdictions subject to a call for action. The list contains a list of all those countries that fail to take active steps to counter cases of money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction. The countries on the list are called upon to apply enhanced due diligence and, if required, to use countermeasures to protect the global financial system from money laundering, terrorist financing, and proliferation financing risks.
The countries on the Blocklist are the Democratic People's Republic of Korea, Iran, and Myanmar.
These are identified as Jurisdictions under increased monitoring. These nations actively work with the Financial Action Task Force (FATF) to curb deficiencies in their regimes to prevent cases of money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction. These countries are subjected to enhanced monitoring of the Financial Action Task Force (FATF) and work to resolve the deficiencies within the agreed time frame. Enhanced due diligence measures are not applied to these countries. Countries under the Grey list are:
Also, read about the United Nations Conference on Trade and Development (UNCTAD) from the given link!
The Financial Action Task Force (FATF) in India plays a key role in strengthening laws against money laundering and terror funding. India has been a full member of the Financial Action Task Force since 2010.
Also, read about the International Civil Aviation Organization here!
The Financial Action Task Force (FATF) has made global financial systems safer by setting standards against money laundering and terror funding. It has also improved country evaluations and cooperation.
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Some important facts on the Financial Action Task Force (FATF) for the UPSC Exam are mentioned in the table below.
Particulars |
Details |
Full Form |
Financial Action Task Force |
Established in |
1989 |
Established by |
G7 nations |
Headquarters |
Paris, France |
Members |
37 member countries and 2 regional organizations, i.e, Gulf Cooperation Council and European Commission. |
Decision-making body |
FATF plenary It meets thrice a year. |
Objective |
To prevent Money Laundering, terror financing, and proliferation of weapons of mass destruction. |
The Financial Action Task Force (FATF) has done commendable work in preventing cases of money laundering and pushing states to take active steps to avoid financing terror activities. It has also prevented the proliferation of weapons of mass destruction.
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We hope all your doubts regarding the Financial Action Task Force (FATF) are addressed after going through this article. The Testbook provides comprehensive notes for different competitive examinations. It has always assured the quality of its products, like content pages, live tests, GK and current affairs, mocks, and so on. Ace your UPSC preparation with the Testbook App!
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