Context:
• FATF publishes updated “Asset Recovery Guidance & Best Practices” — biggest reform in 3 decades on confiscation + international cooperation.
• India & ED played a key role in shaping revised standards; ED case studies included as model examples.
Key Highlights:
- What the New FATF Framework Does
• Broadens definition of asset recovery → covers full chain → identification → tracing → freezing → management → confiscation → return.
• Mandates: Non-Conviction-Based Confiscation (NCBC) — recovery possible even without criminal conviction when prosecution not possible/practical.
• Introduces tools:
– Extended confiscation
– Unexplained Wealth Orders (places onus on person to show lawful origin)
• Stronger emphasis on provisional measures to freeze assets early & prevent dissipation. - India’s Role
• ED contributed to revised standards & guidance drafting.
• ED case examples referenced in FATF document — recognition of India’s global standing in financial crime enforcement.
Relevant Prelims Points:
• FATF = inter-governmental standard-setting body (Paris-based) — AML/CFT standards.
• New guidance → pushes NCBC (non-conviction-based confiscation).
• Unexplained Wealth Orders — reverse burden of proof on source legitimacy.
• Asset recovery now codified as full lifecycle process, not post-conviction event.
• FATF outputs → not binding law, but countries align via domestic legislation & mutual evaluation.
Relevant Mains Points:
• NCBC enables confiscation where accused absconds / dies / is outside jurisdiction (GS3 – Internal Security + Economy).
• Strengthening asset-tracing cooperation improves deterrence against high-risk white-collar crime.
• India’s leadership reinforces narrative of India as rule-maker in global finance governance (not rule-taker).
• Way Forward:
– capacity-building in forensic accounting
– tech-driven asset tracing (AI/ML)
– better MLAT treaties + faster extradition pipelines
– ensure safeguards to prevent arbitrary deprivation (due process, proportionality)
UPSC Relevance (GS-wise):
• GS2 – Global governance / FATF standards
• GS3 – Money-laundering, financial crime, asset confiscation