FATF Compliance in IFSC GIFT City

What is FATF?

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.

The objectives of the 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.

The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.

Monitoring Of Jurisdiction

The FATF publishes two statements at the end of each plenary meeting, in February, June, and October. These statements provide a summary of the recent actions taken by each jurisdiction’s action plan, as well as a list of the strategic deficiencies remaining to be addressed. The two statements reflect the different levels of risk posed at any given time by the deficiencies in the jurisdictions under review.

The statements released are as under:
1.  High-Risk Jurisdictions Subject to a Call for Action also known as ‘BLACK LIST’
2.  Jurisdictions under Increased Monitoring also known as ‘GREY LIST’

Jurisdictions under Increased Monitoring : – February 23, 2024

When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.

Jurisdictions under the “grey list” are actively working with the FATF to address strategic deficiencies in their regimes to counter moneylaundering, terrorist financing, and proliferation financing. 

Countries currently in the ‘Grey List’ are: 
Kenya, Namibia, Bulgaria, Burkina Faso, Cameroon, Democratic Republicof the Congo, Croatia, Haiti, Jamaica, Mali, Mozambique, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Türkiye, Vietnam and Yemen.

High-Risk Jurisdictions Subject to a Call for Action : – February 23, 2024 

High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation. 

For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and, in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating
from the country. This list is often externally referred to as the “black list”.
Countries currently in the ‘Black List’ are: 
Democratic Republic of North Korea, Iran and Myanmar. 

FATF Compliance in IFSC , Gift City

For ensuring a comprehensive, consistent, streamlined and unified regulatory framework governing units in IFSCs, the regulatory powers of India’s financial services regulators i.e., the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory Development Authority of India (IRDAI), Pension Fund Regulatory Development Authority of India (PFRDAI) have been vested in the IFSCA with respect to regulation of financial institutions, financial services and finance products in the IFSC. 

Given the nature of transactions and services in the IFSC, the IFSCA is also committed to ensuring that the regulatory environment is fully FATF compliant with strong enforcement measures of AML and CFT in place. 

Any entity interested in setting up shop in GIFT City is required to be in an FATF Compliant Jurisdiction and comply with international standards set by the FATF  to combat money laundering and terrorist financing.
An FATF-compliant jurisdiction would be one whose name does not appear in the following publications of FATF:

  • High-risk jurisdictions subject to a call for action 
  • Jurisdictions under increased monitoring
The FATF continually reviews money laundering and terrorist financing techniques and strengthens its standards as appropriate to address new risks.

It also regularly updates and notifies the jurisdictions in each of the two lists and the same is subject to changes over a period of time, that an entity setting up offices in IFSC, as well as the regulatory authority itself, should be mindful of.


The FATF is the global standard-setter in the fight against money laundering, and the financing of terrorism and proliferation of weapons of mass destruction. 

Over the past twenty years the FATF has developed, used and refined rigorous compliance mechanisms to help ensure global compliance with its Standards. 

In order to build a safe and secure business environment which is up to International standards, it is pertinent for the authorities at the IFSC GiFT City to be mindful as to who is being allowed to set up their businesses in the area. 

Keeping strict compliance with the FATF Jurisdictions and constant assessment of rules and regulations with regard to same is certain to lead to IFSC becoming more and more attractive economic destination internationally.

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