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Financial Action Task Force (FATF)

PYQs

7

Articles

1

Momentum

19

Phase IFoundation

Background

Overview

FATF plays a crucial role in global financial governance, impacting international financial flows and national security. India's active participation and leadership roles (like the Vice-Presidency) highlight its commitment to combating financial crimes and its growing influence in multilateral forums.

The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001, its mandate was expanded to include combating terrorist financing.

Phase IIStatic core

Facts & tables

Key facts

Purpose

Sets international standards to prevent illegal activities like money laundering and terrorist financing.

Origin

Established by the G7 summit in Paris in 1989.

Functions

Monitors countries' progress in implementing FATF Recommendations, identifies jurisdictions with strategic deficiencies (grey/black lists).

Membership

Over 200 countries and jurisdictions are committed to FATF standards.

Reference table

Static syllabus anchors

TypeReference
Conceptual areaInternational Relations

Reference table

Institutions & roles

BodyRole
Financial Action Task Force (FATF)Sets standards and monitors compliance
Phase IIIExam lens

Prelims angle

Overview

Prelims angle: Multi-statement analysis

Prelims angle: Factual recall

Quick revision

  • Intergovernmental body established by G7 in 1989.
  • Mandate: Combat money laundering (ML) and terrorist financing (TF).
  • Sets international standards (FATF Recommendations).
  • Monitors compliance and identifies high-risk jurisdictions (grey/black lists).
  • India is a member and plays an active role.

Elimination traps

Body vs treaty — FATF is an intergovernmental body, not a treaty itself, though it issues recommendations.

Treaty = agreement between states; body = institution.

High-confidence PYQs

2025Multi-statement analysis, Institutional roles and functions

Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD): I. It provides loans and guarantees to mid...

EconomyOpen question
2024Multi-statement analysis, Factual recall

Which of the following statements about 'Exercise Mitra Shakti-2023' are correct? 1. This was a joint military exercise between India and Bangladesh. 2. It ...

International RelationsOpen question
2023Multi-statement analysis, Factual recall

Consider the following statements about G-20: 1. The G-20 group was originally established as a platform for the Finance Ministers and Central Bank Governor...

International RelationsOpen question
2022Factual recall, Institutional roles and functions

Rapid Financing Instrument and "Rapid Credit Facility" are related to the provisions of lending by which one of the following?

EconomyOpen question
2016Statement-based questions, Conceptual understanding

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

International RelationsOpen question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

EconomyOpen question

‘Global Financial Stability Report’ is prepared by the -

EconomyOpen question
2016Statement-based questions, Factual recall

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

International RelationsOpen question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

EconomyOpen question

‘Global Financial Stability Report’ is prepared by the -

EconomyOpen question
2016Factual recall, Institutional roles and functions

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

International RelationsOpen question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

EconomyOpen question

‘Global Financial Stability Report’ is prepared by the -

EconomyOpen question

Topic timeline

International Relations
Prelims 2016· Statement-based questions, Conceptual understanding

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

Open question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

Open question

‘Global Financial Stability Report’ is prepared by the -

Open question
Prelims 2016· Statement-based questions, Factual recall

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

Open question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

Open question

‘Global Financial Stability Report’ is prepared by the -

Open question
Prelims 2016· Factual recall, Institutional roles and functions

With reference to the International Monetary and Financial Committee (IMFC), consider the following statements: 1. IMFC discusses matters of concern affectin...

Open question

Consider the following statements with reference to ‘IFC Masala Bonds’ - 1. The International Finance Corporation, which offers these bonds, is an arm of th...

Open question

‘Global Financial Stability Report’ is prepared by the -

Open question
Prelims 2022· Factual recall, Institutional roles and functions

Rapid Financing Instrument and "Rapid Credit Facility" are related to the provisions of lending by which one of the following?

Open question
Prelims 2023· Multi-statement analysis, Factual recall

Consider the following statements about G-20: 1. The G-20 group was originally established as a platform for the Finance Ministers and Central Bank Governor...

Open question
Prelims 2024· Multi-statement analysis, Factual recall

Which of the following statements about 'Exercise Mitra Shakti-2023' are correct? 1. This was a joint military exercise between India and Bangladesh. 2. It ...

Open question
Prelims 2025· Multi-statement analysis, Institutional roles and functions

Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD): I. It provides loans and guarantees to mid...

Open question

Vivek Aggarwal appointed Financial Action Task Force vice-president

20 Jun 2026 · The FATF is a global watchdog against money laundering and terrorist financing, setting international standards and evaluating countries' compliance, with India playing an increasingly significant role.

Read article

Related topics

Current topic

Financial Action Task Force (FATF)

Often confused with

Prevention of Money Laundering Act (PMLA), 2002

Open notesOften confused with

Prevention of Money Laundering Act (PMLA) and Enforcement Directorate

Open notes

Practice writing on this topic

UPSC has asked 7 linked questions on Financial Action Task Force (FATF) in Mains. Write an answer to one — and get it evaluated.

See Mains PYQsEvaluate an answer
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