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The Union Cabinet today decided to set up the Financial Intelligence Unit India (FIU-IND) with the aim of establishing links between suspicious or unusual financial transactions and underlying criminal activities, so as to prevent and combat money laundering and related crimes. It will also coordinate and support efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money-laundering and related crimes. It will be the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions to these agencies that shall protect the information against misuse.
The FIU-IND will be headed by the Director (a Joint Secretary level officer). It would be an independent unit of the Central Economic Intelligence Bureau.
The Financial Action Task Force (FATF), an international body which was established in 1989 after the G-7 Summit to examine and recommend anti-money laundering measures worldwide, made 40 recommendations on money laundering in 1990, which, inter-alia, include all aspects of international anti-money laundering system and setting up of a Financial Intelligence Unit (FIU). These recommendations are regarded as the key standards in anti-money laundering efforts. Through these recommendations, the concept of suspicious transaction disclosures has become a standard part of money laundering detection efforts. In creating transaction disclosure systems, some countries realized the need for centralising this effort in a single office for receiving, assessing and processing these reports. At present, about 85 countries are members of the FATF and have set up FIUs.
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