China was elected as the Vice President of Financial Action Task Force (FATF), a global body mandated to combat terror financing and money laundering. China's election came after the FATF plenary meeting on February 23, 2018 in Paris.
Significance of China's election to the FATF
China's election to the FATF assumes significance as Pakistan is set to be put in the FATF 'grey list' in June 2018. The grey lists puts countries under the scanner for not implementing the objectives of the task force.
During the plenary meeting, FATF placed Pakistan under monitoring in its International Cooperation Review Group until June 2018 for compliance of Anti-Money Laundering and Combating Finance of Terrorism regulations.
However, China, Turkey and Saudi Arabia, leading the six-nation Gulf Cooperation Council (GCC) that votes as one bloc, were against Pakistan being put in the grey list.
As per FATF rules, three votes from the FATF's 37 members are needed for not putting a country in the grey list.
Financial Action Task Force (FATF)
• The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.
• Established during the G7 Summit in Paris (France), the organisation aims to establish international standards for combating money laundering and terrorist financing and seeks to combat the growing problem of money laundering.
• FATF Secretariat is housed at the headquarters of the Organisation for Economic Co-operation and Development (OECD) in Paris.
• It consists of over 39 member countries including India.
• FATF's decision making body is the 'FATF Plenary'.The FATF plenary sessions are held in February, June and October every year.
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Mandate of FATF
The Financial Action Task Force set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats.
The FATF is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.