Government agencies have launched a massive National Risk Assessment (NRA) exercise to identify the sectors that are susceptible to money laundering and terror funding, and plug the loopholes. This is in line with the Financial Action Task Force (FATF) recommendations. While India has met its obligation of mutual evaluation with FATF, it is now required to make a risk assessment and put necessary mechanisms in place. FATF is an inter-government body that sets the standards for measures to counter terror financing, money laundering and other threats to international financial system.
As part of the process, the World Bank had earlier this month made a customisable excel-based self assessment software tool available to Indian agencies. It focusses on all vital aspects of money laundering, including terror financing risks, and helps identify threats and vulnerabilities in different sectors.
A three-day workshop attended by senior officials of the Finance Ministry and enforcement agencies was organised recently to thrash out the future course of action. Real-estate emerged as one of the sectors requiring urgent intervention.
The NRA exercise generally takes about a year. It begins with the collection of data on sectors that are prone to money laundering in high, medium and lower categories at the national level. The country then has to prepare an action plan based on the level of risk.