Published on: November 10, 2025

FATF REPORT ON INDIA’S ASSET RECOVERY

FATF REPORT ON INDIA’S ASSET RECOVERY

NEWS

  • The Financial Action Task Force (FATF), a global watchdog for anti–money laundering (AML) and counter–terror financing (CFT), released its report on “Asset Recovery Guidance and Best Practices”.
  • It lauded India’s Enforcement Directorate (ED) for its robust asset recovery mechanisms but also highlighted systemic challenges.

HIGHLIGHTS

Key Highlights

  • Recognition of India’s Framework:
    • FATF praised India’s dual mechanisms — conviction-based and non-conviction-based confiscation under PMLA (2002) and Fugitive Economic Offenders Act (2018).
    • Commended inter-agency coordination and use of technology such as blockchain analytics.
    • India’s asset recovery efforts, especially ED’s role in international cooperation (e.g., seizure of 268.22 bitcoins worth ₹1.3 billion in a joint operation with the US), were showcased as global best practices.

 Major Challenges Identified

  • Legal Complexity: Overlapping jurisdictions and prolonged litigation hinder quick asset recovery.
  • Coordination Barriers: Operational silos among agencies affect intelligence sharing and case handling.
  • Data & Transparency Gaps: Absence of consolidated national statistics on asset recovery weakens accountability.
  • Technical Limitations: Issues in tracing assets hidden in complex ownership or virtual assets.
  • Judicial Delays: Slow judicial processes and challenges in cross-border confiscation enforcement.
  • Conflict of Interest Risks: Funding investigations through recovered assets may bias enforcement priorities.

FATF’s Recommendations

  • Develop comprehensive data systems for monitoring recoveries.
  • Enhance technical and forensic capacities for virtual asset tracking.
  • Streamline judicial processes and strengthen cross-border cooperation.

Context & Significance

  • The Enforcement Directorate, established in 1956, operates under the Department of Revenue and enforces FEMA, PMLA, and FEOA.
  • India, an FATF member since 2010, is now cited as a reference model for asset recovery, with FATF urging continued reforms to balance efficiency, federalism, and due process.