Comparative Analysis of Past Delimitation Exercises & Their Impact on Governance

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                          Comparative Analysis  Delimitation is the process of redrawing the boundaries of electoral constituencies to ensure fair representation based on population changes . In India, it is conducted by the Delimitation Commission , an independent body established under Article 82 (for Lok Sabha) and Article 170 (for State Assemblies) after every Census . Key Objectives of Delimitation ✔ Equal Representation – Ensures constituencies have uniform voter strength , preventing overrepresentation or underrepresentation.  ✔ Electoral Integrity – Adjusts boundaries to reflect demographic shifts , maintaining fair political representation .  ✔ Reservation Adjustments – Determines SC/ST reserved seats based on population distribution. Historical Timeline of Delimitation in India 📌 1952 – First delimitation based on the  1951 Census .  📌 1963 – Adjustments after state reorga...
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The Financial Action Task Force (FATF)

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Financial Action Task Force (FATF)

Introduction

  • The Financial Action Task Force (FATF) is the global watchdog for money laundering and terrorist financing.

  • Established in 1989 at the G-7 meeting in Paris.

Objectives

  1. Initial Purpose (1989): Combat money laundering.

  2. Expanded Mandate (2001): After the 9/11 attacks, FATF began addressing terrorism financing.

  3. Further Expansion (2012): Added efforts to counter the financing of proliferation of Weapons of Mass Destruction (WMD).

Classification Indicators

1. Grey List (Enhanced Monitoring)

  • Countries with strategic deficiencies in their Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) frameworks.

  • These nations work with FATF to address shortcomings.

  • Impact:

    • Increased scrutiny from international financial institutions.

    • Stricter due diligence measures on financial transactions.

2. Black List (High-Risk Jurisdictions)

  • Countries that fail to comply with FATF standards and pose a global financial risk.

  • Impact:

    • Severe financial restrictions, affecting trade and investments.

    • Limited access to international banking networks.

    • International sanctions and reputational damage.


FATF's Main Functions & Goals in brief 

  1. Combating Money Laundering & Terrorism Financing

    • Establishes global standards to prevent illicit financial activities.

    • Ensures that criminals and terrorists cannot exploit financial systems.

  2. Setting Global Standards

    • Develops recommendations to help countries implement effective legal and regulatory measures against financial crimes.

  3. Monitoring & Assessing Compliance

    • Conducts mutual evaluations and peer reviews to ensure countries adhere to FATF standards.

  4. Identifying High-Risk Jurisdictions

    • Maintains the grey list and blacklist, pressuring non-compliant countries to strengthen financial safeguards.

  5. Adapting to Emerging Threats

    • Updates policies to tackle new financial risks, including:

      • Virtual assets & cryptocurrency regulations

      • Proliferation financing of Weapons of Mass Destruction (WMD)


FATF Recommendations

  • First Set (1990): Issued Forty Recommendations outlining a comprehensive action plan against money laundering.

  • Strengthened Framework (2004): Added Ninth Special Recommendations, creating the 40+9 Recommendations to fight money laundering and terrorism financing.

  • Latest Update (2012): Expanded standards to address new financial threats, including WMD proliferation financing.

  • Global Commitment: Over 200 jurisdictions follow FATF Recommendations through nine FATF-Style Regional Bodies (FSRBs).

FATF Sessions

  • The FATF Plenary is its decision-making body.

  • Holds three meetings per year.

Members & Observers

FATF Members

  • Total Members: 39, including major financial hubs.

  • Regional Organizations:

    • European Commission

    • Gulf Cooperation Council (GCC)

  • Member Countries:

    • Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Hong Kong (China), Iceland, India, Ireland, Israel, Italy, Japan, Republic of Korea, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Portugal, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Türkiye, UK, US.

India & FATF

  • Joined as Observer: 2006

  • Full Member Since: 2010

  • Also part of the regional FATF partners:

    • Asia Pacific Group (APG)

    • Eurasian Group (EAG)

FATF Observers

  • Only Observer Country: Indonesia

  • Observer Organizations:

    • Asian Development Bank (ADB)

    • International Monetary Fund (IMF)

    • International Organisation of Securities Commissions (IOSCO)

    • Interpol

    • Organisation for Economic Co-operation and Development (OECD)

    • United Nations Office on Drugs and Crime (UNODC)

    • United Nations Counter-Terrorism Committee Executive Directorate (UNCTED)

    • World Bank

    • World Customs Organisation (WCO)


FATF plays a critical role in global financial governance, and its classifications impact trade, investment, and economic stability worldwide.

"The fight against money laundering and terrorist financing is a fight for justice, security, and economic integrity." — Christine Lagarde (Former Managing Director of the IMF)

This reflects the global importance of financial regulations in ensuring stability and security.


Importance of UPSC Prelims

  • Global Governance & Institutions: FATF is an intergovernmental body that sets global standards for anti-money laundering (AML) and counter-terrorism financing (CFT).

  • India’s Membership: India became a full member in 2010, influencing its financial regulations.

  • Grey List & Blacklist: Understanding FATF’s classification system helps in analyzing international financial risks.

  • Recent Developments: UPSC often asks about current affairs, including FATF’s latest actions and India’s compliance.

Importance for UPSC Mains

  • Impact on India’s Economy: FATF’s recommendations shape India’s financial policies, affecting banking, trade, and investment.

  • National Security & Terrorism Financing: FATF plays a crucial role in curbing illicit financial flows that fund terrorism.

  • International Relations & Diplomacy: FATF’s decisions influence India’s global standing, affecting trade and foreign policy.

  • Legislative & Policy Frameworks: FATF compliance has led to laws like PMLA (Prevention of Money Laundering Act) and amendments in financial regulations.

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