UPSC Prelims Practice Questions — India to assume Vice-Presidency of the Financial Action Task Force for the first time

Q1. The Financial Action Task Force (FATF), established in 1989, was created on the initiative of which one of the following intergovernmental groupings?

  • A. The Group of Seven (G7)
  • B. The Organisation for Economic Co-operation and Development (OECD)
  • C. The United Nations Security Council
  • D. The Group of Twenty (G20)

Q2. Which one of the following is the nodal authority of the Government of India for engagement with the Financial Action Task Force (FATF) and for coordinating implementation of its 40 Recommendations domestically?

  • A. Department of Revenue, Ministry of Finance
  • B. Department of Economic Affairs, Ministry of Finance
  • C. Counter-Terrorism Division, Ministry of External Affairs
  • D. Department of Financial Services, Ministry of Finance

Q3. In the context of FATF Recommendations, the term 'proliferation financing' refers to which one of the following?

  • A. Provision of funds or financial services for the manufacture, acquisition, development, transfer or stockpiling of nuclear, chemical or biological weapons and their delivery systems, in contravention of national laws or international obligations
  • B. Funding extended to non-state actors for procuring conventional small arms and light weapons across porous land borders
  • C. Channelling of resources to sleeper terror cells operating across multiple jurisdictions through informal value-transfer systems
  • D. Cross-border movement of undeclared bulk cash exceeding prescribed customs declaration thresholds with intent to evade taxation

Q4. With reference to India's membership of the Financial Action Task Force (FATF), which one of the following correctly indicates the ordinal position in which India was admitted as a country member?

  • A. 30th country member, admitted in 2006
  • B. 32nd country member, admitted in 2008
  • C. 34th country member, admitted in 2010
  • D. 36th country member, admitted in 2012

Q5. Which one of the following is the nodal authority in the Government of India for coordinating with the Financial Action Task Force (FATF) and handling related inter-ministerial coordination?

  • A. Department of Economic Affairs, Ministry of Finance
  • B. Department of Revenue, Ministry of Finance
  • C. Financial Intelligence Unit – India, under the Prime Minister's Office
  • D. Ministry of External Affairs, Economic Diplomacy Division

Q6. With reference to the Financial Action Task Force (FATF), the final decision to place a jurisdiction on the 'Grey List' (Jurisdictions under Increased Monitoring) or the 'Black List' (High-Risk Jurisdictions Subject to a Call for Action) is taken by which one of the following?

  • A. The FATF Plenary
  • B. The International Co-operation Review Group (ICRG)
  • C. The FATF Secretariat at the OECD, Paris
  • D. The United Nations Security Council Sanctions Committee

Q7. How many countries were the founding members of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) at its inaugural conference held in Moscow in October 2004?

  • A. Four
  • B. Six
  • C. Eight
  • D. Nine

Q8. With reference to India's membership of FATF-Style Regional Bodies (FSRBs), consider the following statements: 1. The Asia/Pacific Group on Money Laundering (APG) was established earlier than the Eurasian Group (EAG). 2. India became a member of the APG before it became a member of the EAG. 3. India is the only country that is simultaneously a member of both the APG and the EAG. Which of the statements given above is/are correct?

  1. The Asia/Pacific Group on Money Laundering (APG) was established earlier than the Eurasian Group (EAG).
  2. India became a member of the APG before it became a member of the EAG.
  3. India is the only country that is simultaneously a member of both the APG and the EAG.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q9. India's Mutual Evaluation Report under the Financial Action Task Force (FATF) 2023-24 evaluation cycle was formally adopted at which one of the following FATF Plenaries?

  • A. Paris Plenary, October 2023
  • B. New Delhi Plenary, February 2024
  • C. Singapore Plenary, June 2024
  • D. Strasbourg Plenary, October 2024

Q10. Within the Government of India, which one of the following is the nodal authority that coordinates the country's engagement with the Financial Action Task Force (FATF) and led the Indian delegation to the FATF Private Sector Collaborative Forum 2025 in Mumbai?

  • A. Department of Economic Affairs, Ministry of Finance
  • B. Department of Revenue, Ministry of Finance
  • C. Financial Intelligence Unit, Ministry of Home Affairs
  • D. Economic Diplomacy Division, Ministry of External Affairs

Q11. Which one of the following has been designated as the Nodal Agency at the Central level for the investigation of Terror Funding and High-Quality Fake Indian Currency Notes (FICN) cases in India?

  • A. Enforcement Directorate
  • B. Central Bureau of Investigation
  • C. National Investigation Agency
  • D. Financial Intelligence Unit – India

Q12. With reference to the institutional architecture for combating money laundering and terror financing in India, consider the following statements: 1. The Directorate of Enforcement functions under the Department of Revenue in the Ministry of Finance, whereas the National Investigation Agency functions under the Ministry of Home Affairs. 2. The Financial Intelligence Unit-India (FIU-IND) reports to the Economic Intelligence Council, which is headed by the Union Home Minister. 3. The Directorate of Enforcement is empowered to enforce both the Prevention of Money Laundering Act, 2002 and the Foreign Exchange Management Act, 1999. Which of the statements given above is/are correct?

  1. The Directorate of Enforcement functions under the Department of Revenue in the Ministry of Finance, whereas the National Investigation Agency functions under the Ministry of Home Affairs.
  2. The Financial Intelligence Unit-India (FIU-IND) reports to the Economic Intelligence Council, which is headed by the Union Home Minister.
  3. The Directorate of Enforcement is empowered to enforce both the Prevention of Money Laundering Act, 2002 and the Foreign Exchange Management Act, 1999.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q13. Which one of the following is the nodal department of the Government of India for engagement with the Financial Action Task Force (FATF) and oversight of the Financial Intelligence Unit-India (FIU-IND)?

  • A. Department of Economic Affairs, Ministry of Finance
  • B. Department of Revenue, Ministry of Finance
  • C. Department of Financial Services, Ministry of Finance
  • D. Ministry of External Affairs