BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
According to the shadow report, India has been indiscriminately targeting non-governmental organisations (NGOs) with “unproven and frivolous claims.”
Ahead of the Mutual Evaluation Review (MER) for the final review of terrorist financing and money laundering, which is scheduled for November 3rd, the Global NPO Coalition filed a shadow report created by anonymous civil society actors to the Financial Action Task Force (FATF) that reveals India deploying its laws to target and strangle non-profit organisations in the area. The MER also examined and reported how the country is addressing financial crime and weapons proliferation. MER’s report will be released in June 2024 after the plenary discussion.
NGOs and field experts interviewed for the shadow report found that India has been indiscriminately targeting them for “unproven and frivolous claims” without informing or involving FATF. The 46-page long shadow report revealed that India is, on major accounts, non-compliant with the FATF recommendations and has failed to act upon the regulator authority suggestions MER India on combating terrorist financing, money laundering, and illicit crimes.
The MER particularly said in 2010 that India lacked a comprehensive review of its financial institutions. Furthermore, the MER suggested that India must do a thorough risk assessment of the NGO sector for money laundering. The MER identified the loopholes 13 years ago, yet India has not declared whether it has examined the NGOs for similar risks. Nonetheless, the report stated, “it follows a one-size-fits-all approach that targets the entire NPO sector based on unproven or frivolous claims.”
An international donor organisation’s donor revealed that “despite timely intervention by international donor agencies to provide resources, India represented unique challenges when it came to receiving funds. Unfortunately, the challenges were artificially created by the government despite a severe need for relief work.” Another hurdle faced in the country is the misuse of banking institutions by the government the report revealed that “India’s banking institutions did not release the money to the beneficiary organisations citing security concerns flagged by the government.” Many domestic NPOs faced these hurdles despite being fully compliant, including FCRA certification.
The report stated, “A perfect example of the ‘unintended consequences of FATF recommendations’ is the weaponisation of the ED in India, which is being used as a political tool by the government to target opposition leaders and NPOs who are critical of the government.”
The shadow report also called upon India to “stop misusing FATF standards to target legitimate NPOs” as their collective effort with the FATF to target NGOs indiscriminately. The report also suggested India revise the FCRA, PMLA, and UAPA punitive measures and not violate the recommendations.
Amnesty International and the Global NPO Coalition raised concerns with FATF President, T. Raja Kumar, in their letter, urging him to “include at least one independent and impartial civil society expert either directly in the team of evaluators or involve them otherwise in the MER process. Such a person will be able to advise the team on the nature of civil society concerns without prejudice and warn evaluators of attempts to obfuscate the situation on the ground.”
The letter further stated, “we believe that the upcoming evaluation presents an opportunity for the FATF to denounce any disproportionate, arbitrary, and unnecessary restrictions on India’s NPO sector. The FATF must call on India to respect human rights and their international obligations. By including an independent NPO expert in the evaluation team and ensuring evaluators meet the impacted NPOs, the FATF can ensure its recommendations are being complied with by the Indian government both in letter and in spirit.”
The Global NPO Coalition on FATF calls itself a “loose network of diverse nonprofit organisations.” The Coalition has stated on its website, “The Coalition advocates for improvement in the quality and effectiveness of FATF Mutual Evaluations with sustained outreach to the NPO sector. The aim is to mitigate the unintended consequences of countering the financing of terrorism policies on civil society so that legitimate charitable activity is not disrupted.”