Referring to the Enforcement Directorate (ED), it said the “backlog of pending cases (money laundering) remains considerable, with a large number of accused persons awaiting conclusion of their trials”.
The money laundering and terror financing watchdog in its summary flagged the delay in prosecution in cases related to terrorism financing (TF). “TF investigations are broadly conducted in line with the risks identified and case studies reflect India’s ability to conduct complex financial investigations and identify financial flows…there are significant delays in prosecutions, resulting in a high number of pending cases and accused awaiting trial,” it said.
On the backlog of cases with ED, FATF said it “also impacts the extent to which confiscation of criminal proceeds is carried out, in particular the money laundering cases that ED is responsible for, although India has confiscated proceeds via non conviction-based confiscation including in some significant cases”.
“India’s main sources of money laundering originate from within India, from illegal activities committed within the country. These proceeds may be laundered within India, laundered abroad, or laundered abroad and returned to India for re-integration into the licit economy,” FATF said.
It said India faces a “disparate range of terrorism threats”, categorised into six different theatres. “They include regional insurgencies in the northeast and north of India, left-wing extremist groups seeking to overthrow the government,” it said.On generating suspicious transaction reports (STRs), it said “reporting by some financial intermediaries sub-sectors appears limited and designated non-financial businesses and professions are yet to detect suspicious activity and file STRs in a significant way”.”Checks to prevent criminals from entering the financial, virtual asset service provider (VASP) and DNFBP (designated non-financial businesses and professions) sectors are broadly adequate, except for the deals in precious metal and stone sector and some non-banking FIs, and checks in many sectors are insufficient to spot criminal association,” it said while lauding “good general understanding of risks and obligations as well as application of mitigating measures in the financial sector”.
