Without explicitly naming Pakistan, Finance Minister Arun Jaitley has urged the inter-governmental Financial Action Task Force (FATF) to take concrete action against countries sponsoring terrorism and hosting terrorist infrastructure.
Bringing up the issue prominently during discussions here with US Treasury Secretary Jacob J lew as part of the sixth annual India-US Economic and Financial Partnership, Jaitley said the FATF must ensure effective implementation of legislation in various countries relating to terrorist financing.
Jaitley’s push on this score is being viewed against the backdrop of the free run that India-centric terrorist groups such as lashkar-e-Tayyeba (leT) and Jaish-e-Mohammad (JeM) continue to have in Pakistan as illustrated by the attack mounted by JeM at the Pathankot Air Force Station in January.
A joint statement issued after the Jaitley-lew meeting spoke of enhanced India-US cooperation in tackling money laundering and combating the financing of terrorism through increased information sharing and cooperation, including a dialogue held recently in India.
“We both agree on the importance of fighting illicit finance in all forms as an important means of tackling global terrorism,” the statement said.
The Finance Minister emphasized that FATF -- a multilateral body to combat money laundering, terrorist financing and related threats to the international finance system – must also address the problem of offshore tax evasion and avoidance, including through tax havens.
At the bilateral economic dialogue, the United States offered support for India’s National Investment and Infrastructure Fund (NIIF) to increase financing options for India's infrastructure growth and expressed interest in further discussions in areas such as municipal finance.
“At this meeting, the last for the Obama Administration, we took stock of the impressive efforts that have been undertaken by both sides to deepen mutual understanding, and to improve cooperation across a wide range of bilateral and multilateral issues,” the statement noted, adding: “We reiterated that the US-India partnership will be one of the defining relationships of the 21st century.”
Five work streams have been underway at the sub-cabinet level in India and the US under this dialogue mechanism, with progress made on all fronts, the statement said.
It noted that under the US-India Investment Initiative launched in January 2015, the two governments have worked in collaboration with private sector to identify specific policies, regulatory reforms, and technical collaboration aimed at mobilizing capital from both domestic and foreign investors to build infrastructure and create jobs.
The statement also highlighted the fact that over the past year, tax authorities of the two countries resolved a significant portion of bilateral tax disputes. Also, the two governments have begun to accept bilateral Advance Pricing Agreement applications by companies in both jurisdictions in an effort to enhance cross-border business processes and strengthen our commercial ties.
Reporting progress in sharing of financial information, the two sides committed themselves to “continued collaboration and sharing of experience in tackling offshore tax evasion and avoidance, including joint tax audits and tax examination abroad”.
With public debt management a priority area for India, a Terms of Reference was signed between the two sides for collaborating on India’s government debt programme.
Apart from Jaitley and lew, participants at the bilateral economic dialogue included Reserve Bank of India Governor Raghuram Rajan and US Federal Reserve Chairman Janet Yellen and senior officials from both sides.