NEW DELHI: India is facing growing international scrutiny as the Financial Action Task Force (FATF), a global organization dedicated to combating money laundering, investigates allegations of the government’s misuse of legal measures to suppress non-governmental organizations (NGOs) and civil society groups.
Reports from Bloomberg suggest that FATF is closely examining India’s “overzealous” application of laws governing the financing of organizations and speculating whether these laws are being abused to target independent NGOs, including well-known groups like Amnesty International and policy think tanks.
FATF, responsible for monitoring policies against money laundering and terrorism funding, is allegedly concerned about how India’s rules may impact the operation of nonprofit organizations and civil society groups. To thoroughly assess the situation by engaging with NGOs, a FATF delegation is expected to visit India in November, potentially damaging India’s global reputation.
Under the Foreign Contribution Regulation Act (FCRA), NGOs are required to register with the Union Home Ministry (MHA) and obtain a license before accepting donations from abroad. Independent NGOs have faced increased scrutiny, while some organizations with close government ties have been granted FCRA permits.
In 2020, Amnesty International, for instance, had to cease its operations in India due to government persecution. The Modi administration also prevented institutions like the Centre for Policy Research from soliciting foreign donations, leading to legal actions.
Amnesty International, a prominent international human rights group, criticized India for allegedly misusing FATF directives. Aakar Patel, the chair of Amnesty International India, accused the Indian government of leveraging FATF’s recommendations to bolster financial and counterterrorism laws, which were reportedly being misused to silence critics and target activists.
The group highlighted that over 20,600 NGOs had their licenses revoked in the past decade, with approximately 6,000 cancellations since 2022. Amnesty International was compelled to halt its operations in India in 2020 due to restricted bank accounts, sparking allegations of “illegal practices” and substantial fund transfers from Amnesty UK to India.
FATF Initiates ‘Mutual Evaluation
In response to these allegations, FATF confirmed the initiation of a “Mutual Evaluation process” but refrained from commenting on India’s specific activities. FATF emphasized that its guidelines are intended to prevent disruption or deterrence of legitimate philanthropic operations. The actions FATF might take if evidence of India’s abuse of authority is found remain uncertain.
This incident adds to concerns raised by international groups regarding India’s deteriorating democratic situation. Expert organizations have highlighted a decline in democratic values, with India being labeled an “electoral autocracy” by V-Dem in 2021 and rated as “partly free” by Freedom House. Frequent internet outages have also damaged India’s reputation as a democracy while tarnishing its image.
As the FATF investigation approaches, India’s treatment of NGOs and civil society organizations is drawing increased international attention, raising questions about the government’s commitment to democratic principles and human rights.
