What is the News ?

The Financial Action Task Force (FATF), an inter-governmental body that sets anti-money laundering standards, has removed the offshore tax haven Cayman Islands from its ‘grey list’.

Facts About:

• The Financial Action Task Force (FATF) is an intergovernmental organization that was founded in 1989 as part of the G7's effort to develop laws to combat money laundering.
• Its directive was extended to cover financing of terrorism in 2001.
• Only a few nations are listed in the grey and black lists that the FATF releases.
• To monitor the country's progress in combating money laundering and terrorism financing, a grey list is established.
• Non-cooperative nations are included on a blacklist in an effort to combat money laundering and financing of terrorism.

About the Cayman Islands:

• The Cayman Islands are situated in the Western Caribbean Sea and are a British Overseas Territory.
• Grand Cayman, Cayman Brac, and Little Cayman are the three islands that make up the territory; they are situated northwest of Jamaica and south of Cuba.
• Its topography is low-lying, with coral reefs.
• Economy: The islands are a thriving offshore financial hub, with a mixed economic system.

What is the News ?

India has suggested to all G20 nations to actively cooperate to deal comprehensively and efficiently with fugitive economic offenders as part of the action against them and recovery of the assets.

Facts About:

• The FATF is an international organization made up of governments that focuses on creating policies and standards to combat money laundering and terrorist financing.
• Objective: Its main goal is to establish global standards and encourage the development of policies at both national and international levels to prevent money laundering and the financing of terrorism.
• The FATF provides recommendations to combat financial crimes, assesses its member countries' policies and procedures, and strives to promote the adoption of anti-money laundering regulations worldwide.
• Formation: The FATF was established in 1989 during the G7 Summit in Paris with the initial aim of addressing money laundering. In 2001, its scope expanded to include combating terrorism financing.
• Headquarters: Its headquarters are located in Paris, France.
• Membership: The FATF comprises 39 member countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the European Union.
  • India became a member in 2010.
• As part of its efforts, the FATF maintains two lists: the blacklist and the greylist.

Black List:

• The blacklist contains countries referred to as Non-Cooperative Countries or Territories (NCCTs). These are countries known for supporting terrorism funding and money laundering activities.
• The FATF regularly updates this list, adding or removing countries as needed.

Grey List:

• The grey list includes countries considered to be safe havens for supporting terrorism funding and money laundering. Placement on this list serves as a warning that a country may eventually be placed on the blacklist.
• Currently, three countries on the FATF blacklist are North Korea, Iran, and Myanmar.

Consequences of Being on the FATF Blacklist:

• Countries on the FATF blacklist do not receive financial aid from organizations such as the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), and the European Union (EU).
• Additionally, they face various international economic and financial restrictions and sanctions.