RBI bans making direct investments in ‘Non Co-operative Countries and Territories’ [Read Notification]

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The Reserve Bank of India has prohibited Indian Party from making direct investments in countries identified by the Financial Action Task Force (FATF) as “Non Co-operative countries and territories”.

The RBI notification stated that, “At present, there is no restriction on an Indian Party with regard to the countries, where it can undertake Overseas Direct Investment”.

“In order to align, the instructions with the objectives of FATF, on a review, it has been decided to prohibit an Indian Party from making direct investment in an overseas entity (set up or acquired abroad directly as JV/ WOS or indirectly as step down subsidiary) located in the countries identified by the FATF as “non co-operative countries and territories” as per list on FATF or as notified by the Reserve Bank of India from time to time”, it also said.

The Financial Action Task Force (FATF) currently comprises two regional organisations and 35 member jurisdictions, including India, US, UK, China and the European Commission.

The Financial Action Task Force (on Money Laundering) (FATF) is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.

Read the full text of the notification below.