What is Financial Action Task Force

Defination:

Financial Action Task Force (FATF) is an inter-governmental policy making body.
It was established in 1989 with ministerial mandate to establish international standards for combating money laundering and terrorist financing.
It's main aim is to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to integrity of international financial system.
Primarily, it was only dealing with developing policies to combat money laundering.
In 2001, it had expanded its action against terrorism financing.
At present, the institution consists two regional organisations and 35 member jurisdictions, including India, UK, US, China and the European Commission.
Recently, India's apex financial institution, RBI has prohibited Indian entities from making direct investments in any entity located in Non-Cooperative Countries and Territories (NCCT).
These are to be identified by Financial Action Task Force (FATF).
The prohibition is for aligning instructions under FEMA (Foreign Exchange Management Act) with the objectives of the FATF.
Currently, there is no restriction on an Indian entity with regard to the countries where it can undertake Overseas Direct Investment (ODI).