New Delhi: India is facing threats of terrorist financing from groups active in Jammu & Kashmir, according to a report by the Financial Action Task Force (FATF) released on Thursday. The report, titled- “India’s measures to combat money laundering and terrorist financing”- praised India’s action and underscored New Delhi has implemented an anti-money laundering and combating terror financing system that is effective in many respects.

“A joint FATF-APG-EAG assessment of the country’s measures to tackle illicit Finance concludes that India has implemented an anti-money laundering and counter-terrorist financing (AML/CFT) framework that is achieving good results, including on risk understanding, access to beneficial ownership information and depriving criminals of their assets. Authorities make good use of financial intelligence and co-operate effectively, both domestically and internationally,” according to the report.

The Paris-headquartered body said, “India’s main sources of money laundering originate from within, from illegal activities committed within country.” It added that the country faced “disparate” range of terror threats, most significantly from ISIL (Islamic State or ISIS) or AQ-linked groups (Al Qaeda) active in and around Jammu and Kashmir.

However, it stressed that major improvements are needed to strengthen prosecution in the money-laundering and terror financing cases. The FATF, the global financial crime watchdog, said India’s improvements are required to protect the non-profit sector from terror abuse. The observation was made in a ‘mutual evaluation report’ released by FATF on combating terror financing and anti-money laundering regimes. “India’s main sources of money laundering originate from within, from illegal activities committed within the country,” the FATF report said.

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