This recognition comes in FATF’s latest evaluation, which applauds India’s strong legal framework, advanced technology integration, and coordinated institutional mechanisms to tackle money laundering, terror financing, and economic offenses.
FATF Commends ED’s Global Standards in Asset Recovery
The FATF, an intergovernmental watchdog on financial integrity, expanded its asset recovery framework beyond corruption to cover broader economic crimes. In this updated guidance, India’s ED was highlighted for successfully tracing and confiscating assets of fugitive offenders like Nirav Modi and Vijay Mallya, and returning funds to victims and public agencies.
According to the FATF report, India’s asset recovery framework—backed by the Prevention of Money Laundering Act (PMLA), 2002 and the Fugitive Economic Offenders Act, 2018—has proven to be one of the most effective globally. The ED has frozen and confiscated assets worth over ₹1.2 lakh crore and restored nearly ₹20,000 crore to victims and financial institutions.
ED’s Innovative and Tech-Driven Enforcement
FATF praised the ED’s “value-based confiscation” mechanism, which allows Indian authorities to seize assets of equivalent value within India when recovery of overseas properties becomes legally complex. This practice ensures that offenders cannot evade accountability by hiding assets abroad.
The agency’s use of AI-based financial analytics, digital tracking, and inter-agency data integration has improved its investigation speed and accuracy. FATF also recognized India’s inter-institutional cooperation among the ED, Financial Intelligence Unit (FIU), CBI, and tax authorities as a model for other nations combating transnational financial crime.
November 2025 Update: ED Returns ₹538 Crore to Victims
In a recent update highlighted by FATF and domestic media, the ED successfully recovered ₹538 crore from an investment fraud case, returning the money to more than 75,000 victims. The FATF cited this case as a benchmark for effective asset restitution. Additionally, crypto assets worth ₹1,646 crore were traced and frozen in recent operations—demonstrating India’s adaptability to emerging digital financial crimes.
India’s Global Image Strengthened
The FATF’s commendation significantly enhances India’s international credibility, investor confidence, and diplomatic leverage. Experts believe this recognition will boost foreign direct investment (FDI) as global investors view India as a jurisdiction with strong safeguards against financial misconduct.
India’s inclusion under the FATF’s “regular follow-up” category—rather than enhanced monitoring—further validates the country’s high-level compliance with global anti-money laundering (AML) and counter-terror financing (CFT) norms.
Need for Continued Vigilance
While the FATF lauded India’s progress, it also advised greater supervision over non-financial sectors like real estate, jewelry, and legal professions—areas vulnerable to money laundering risks. The report emphasized that ensuring due process, transparency, and fair enforcement remains essential for sustaining international trust.
The FATF’s recognition of the Enforcement Directorate marks a landmark achievement in India’s financial governance. It positions India among the global leaders in AML/CFT enforcement and underscores the ED’s operational excellence in recovering illicit assets. As India continues to modernize its financial crime framework, maintaining fairness, oversight, and accountability will be key to transforming this milestone into long-term institutional credibility.
