India’s AML/CFT Public-Private Partnership

Shailesh Thakur, Additional Director, Financial Intelligence Unit – India (FIU-IND)

The Public-Private Partnership (#PPP) model to enhance efforts to fight money laundering and terrorist financing has gained popularity over the years in various jurisdictions globally. What are the benefits that a country can derive from running a robust PPP initiative?

The popularity and desirability of the PPP approach in the #AML #CFT domain originate in two considerations. An #effective national AML/CFT regime must look to facilitate optimum leveraging of public and private sector capabilities to accomplish its objectives. This assumes special importance in jurisdictions like #India, on account of its large-scale economy and socio-economic diversity. While mechanisms existed for coordination and collaboration within the public sector (#FIU #India, Law Enforcement Agencies, Regulators) in India, there was definite scope for similar collaboration between the public and private sectors. Further, the popularity of the PPP approach also lies in the fundamental shift from the #adversarial, #compliance-based, #regulatory and #tickbox-based approach toward a #collaboration-based, #voluntary, #information–#sharing approach in the AML/CFT domain.

The FIU-IND is spearheading efforts to create a PPP in India to fight money laundering and terrorist financing. What is the envisaged structure, unique features and roadmap of this PPP?

FPAC (FIU-INDIA Initiative for Partnership in AML/CFT), India’s PPP platform in AML/CFT was launched in January 2022. FIU-India is the convenor of the group, while the Reserve Bank of India (RBI) and 40 reporting entities have been included as permanent invitees. The reporting entities were chosen in a manner to accommodate the optimum #geographical and #sectoral spread, with due regard for the #impact of emerging #technologies on the #financial space and India’s unique #socioeconomic landscape and with an eye on future expansions. The charter of FPAC also provides for ad-hoc, issue-based interactions and working groups with special invitees, such as, #lawenforcement agencies, other sectoral #regulators, #academic institutions, #consultancy firms, think tanks and #software developers. 

What are the objectives of the PPP and how is it expected to benefit the different types of partners involved?

The preliminary objective of FPAC is to facilitate collaboration between FIU India and other #stakeholders in the AML/CFT domain. Collaborative engagements under the auspices of FPAC are envisaged to facilitate discussions on #strategic and #tactical #intelligence sharing. FPAC is also envisaged to provide a platform for #knowledge sharing on emerging trends/technologies, deliberations on #quality of financial intelligence filed, best practices and other incidental matters pertaining to collection, analysis and dissemination of #actionable #financial #intelligence. Apart from the quarterly meetings of the group, the charter of FPAC also provides for ad-hoc, issue-based interactions and working groups with special invitees.

The key elements in any successful PPP would be trust and collaboration amongst its partners. How will the PPP set up in India encourage its members to actively participate in the partnership?

FPAC commenced its interactions in January 2022 with a group of 27 reporting entities which were entirely from the #banking sector. As the platform matured steadily with sustained, periodic interactions with valuable contributions to the sharing of tactical and strategic intelligence and other deliberations, subsequent expansions were carried out to include reporting entities from other sectors. As such, the sense of #trust and #collaboration was built through sustained interactions which were found valuable by all the stakeholders engaged in the initiative. 

What would you say are the key factors for the PPP to remain sustainable and achieve its objectives in the long term?

The key factors for the sustainability of FPAC will be determined by its ability to remain relevant for the reporting entities and other participants in the form of the knowledge products developed, information shared and other contributions made, as well as the ability of the group to accommodate the various stakeholders to make it truly representative of the AML/CFT #ecosystem in India.