UPSC PRELIMS 2019 : Saudi Arabia –  1st Arab country to get FATF membership

Saudi Arabia - 1st Arab country to get FATF membership

Topic : Saudi Arabia –  1st Arab country to get FATF membership

Topic in Syllabus: International Affairs

 

Context:

Saudi Arabia - 1st Arab country to get FATF membership

  • Saudi Arabia has become the first Arab country to be granted full membership of the Financial Action Task Force (FATF) following the group’s annual general meeting in the US.
  • The kingdom’s accession came as the global money laundering watchdog celebrated the 30th anniversary of its first meeting held in Paris in 1989.
  • Saudi Arabia had received an invitation from the FATF at the beginning of 2015 to join as an “observer member“.


About FATF: 

The FATF is the global standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT).

 

Mandate:

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.

Established in: 1989.

Headquarters: Paris, France.

 

Members:

  • The FATF currently comprises 37-member jurisdictions and 2 regional organisations (the Gulf Cooperation Council or GCC, and the European Commission).
  • While India, Russia and China are members, Pakistan is only an associate member of Asia Pacific Group-FATF.

 

What is blacklist and grey list?

  • FATF maintains two different lists of countries: those that have deficiencies in their AML/CTF regimes, but they commit to an action plan to address these loopholes, and those that do not end up doing enough. The former is commonly known as grey list and latter as blacklist.
  • Once a country is blacklisted, FATF calls on other countries to apply enhanced due diligence and counter measures, increasing the cost of doing business with the country and in some cases severing it altogether.

Sample Question:

Which of the following is a member of FATF other than G7 members?

a) Saudi Arabia
b) Turkey
c) Mexico
d) India

Answer: a
• Saudi Arabia has become the first Arab country to be granted full membership of the Financial Action Task Force (FATF) following the group’s Annual General Meeting in Orlando, Florida on Friday.
• The Kingdom’s accession comes as the FATF celebrates its 30th anniversary of its first meeting held in Paris in 1989.