CDS (II) 2022 General Knowledge · Question 74 of 120

Correct — D, Turkey and UAE. The Financial Action Task Force runs two rosters of problem jurisdictions. The blacklist, formally the call for action, held Iran, Myanmar and North Korea. The grey list, formally jurisdictions under increased monitoring, holds countries whose anti-money-laundering and terrorist-financing controls have strategic gaps but which have agreed an action plan and accepted closer supervision. Turkey was added to the grey list in October 2021 and the United Arab Emirates in March 2022, so both were sitting on it when this paper was written in September 2022, and no other pair among the options was.

• (a)Bolivia and Mozambique — Not the pair. What made grey-list news in India across 2021 and 2022 was Turkey's addition in October 2021 and the UAE's in March 2022 — two members of the G20 and of the Gulf's financial centre respectively, which is precisely why it was reported at all.
• (b)Colombia and Ecuador — Neither of these was added in the window this question is testing. The list changes at each plenary, so the discipline the item wants is dating the entry, not simply recognising a developing country.
• (c)Iraq and Qatar — A tempting West Asia pairing, but the West Asian entry that mattered here was the United Arab Emirates in March 2022. Turkey, the other half of the keyed answer, is not usually filed under this region at all — which is part of why the correct pair looks odd at first glance.

The Financial Action Task Force is an intergovernmental body set up on the initiative of the G7 at the 1989 Paris summit to write and police standards against money laundering, later extended to terrorist financing. Its secretariat sits at the OECD in Paris. It began with 16 members and now has 38 member jurisdictions plus two regional organisations; India is a full member. Its power is reputational rather than legal — a grey listing raises the cost and the paperwork of doing business with a country's banks, and governments work hard to get off it.

Read the stem's word 'recently' as pointing at the twelve months before the exam. Both keyed countries are unusual entries, and that is why they were news: Turkey is a G20 economy and the first NATO member of its size to be listed, and the UAE is a global financial hub. The position has since moved in both cases — the UAE was taken off the grey list in February 2024 and Turkey in June 2024 — so a card written today must say that plainly rather than leave a 2022 fact standing as current. The listing itself, in October 2021 and March 2022, is what the key is testing.

• FATF was founded in 1989 on the initiative of the G7, at the Paris summit, and its secretariat is hosted at the OECD.
• It has 38 member jurisdictions and two regional organisations; India is a full member.
• The grey list is formally the list of jurisdictions under increased monitoring; the blacklist is formally the call for action.
• Turkey was grey-listed in October 2021 and the United Arab Emirates in March 2022.
• The UAE was removed in February 2024 and Turkey in June 2024, so neither is on the list today.

• Confusing the grey list with the blacklist; the blacklist has stayed a very short roster.
• Treating a listing as permanent. Entries and exits happen at plenaries three times a year.
• Assuming only poor or small countries are grey-listed — a G20 member and a Gulf financial centre are the keyed answer here.

Usually as a current-affairs recall item on who was listed or delisted, or as a one-liner on what FATF is and which ministry represents India.

• practice — not a real PYQ

  The Financial Action Task Force was set up in 1989 on the initiative of which one of the following groupings?

  • (a)G7
  • (b)BRICS
  • (c)ASEAN
  • (d)OPEC

  Answer(a) G7 — FATF was created at the 1989 G7 summit in Paris, and its secretariat is hosted at the OECD.

• practice — not a real PYQ

  In FATF usage, the phrase 'jurisdictions under increased monitoring' refers to which one of the following?

  • (a)The blacklist
  • (b)The grey list
  • (c)Founding members
  • (d)Observer organisations

  Answer(b) The grey list — countries with strategic deficiencies that have committed to an action plan and accepted closer supervision.