India on Thursday called for “concrete” action against countries that sponsor and host terrorists by invoking the Financial Action Task Force (FATF) that combats money laundering and the financing of terrorism.
Finance minister Arun Jaitley said the body must ensure “effective implementation of legislation in various countries relating to terrorist financing and take concrete action against countries sponsoring terrorism and hosting terrorist infrastructure”.
Jaitley’s remarks came during the sixth annual ministerial meeting of India-US Economic and Financial Partnership with his American counterpart Jack Lew.
India and the US are among 37 members of FATF – the intergovernmental policy-making body that was set up in 1986. Pakistan, however, is not.
But the target of the minister’s call for “effective implementation” and “concrete action” against countries sponsoring and hosting terrorism couldn’t have been clearer.
“The FATF must also address offshore tax evasion and avoidance including through tax havens,” Jaitley said, according to an official statement about his meetings on Thursday.
Offshore tax evasion and tax havens figured prominently during the meeting, with an announcement to intensify collaboration on the issue, going beyond sharing experience and expertise.
The two countries will continue to hold joint tax audits and tax examinations abroad, they said in a joint statement issued after the meeting, and that “Competent Authorities of the two countries engaging in bilateral dialogue to move forward cooperation in these areas”. But no dates were announced.
India and the US began discussing collaboration on offshore tax evasion around 2015, when it first figured at the annual bilateral meeting of the two finance ministers that year. Few months later in October, they signed the Foreign Account Tax Compliance Act (FATCA), which enjoins them to share information about cross-border accounts by their nationals.
“The two sides will continue to engage in discussions on full reciprocal arrangement on FATCA,” the statement said, adding they look forward to “increased cooperation”.
The stress on offshore tax evasion comes at a time of a fresh urgency felt around the world in the aftermath of the devastating revelations about clients of a Panama law firm.
Another significant announcement was about the US offering support for India’s National Investment and Infrastructure Fund (NIIF) and, the statement said, “expressed interest in further discussions in areas such as municipal finance”.
Dubbed the “fund of funds”, the NIIF was set up in December 2015 as Rs 40,000 crore umbrella fund for investing in India’s infrastructure. Half of this money is coming from the Indian government and the private sector is expected to come up with the rest.