‘Not bulletproof’: FATF warns Pakistan against terror funding; greylist exit does not shield from scrutiny

The Financial Action Task Force (FATF) on Saturday cautioned Pakistan that its removal from the greylist in October 2022 does not make it immune to scrutiny over money laundering or terrorist financing.FATF President Elisa de Anda Madrazo in a press briefing said, “Any country that is on the greylist or has exited it is not bulletproof against criminal actions, whether by money launderers or terrorists. We invite all jurisdictions, including those who have been delisted, to continue their good work to prevent and deter crimes.”Madrazo emphasised that all countries, including those recently delisted, must continue tightening safeguards against illicit financial activities. Her remarks come amid reports that Pakistan-based terror groups, including Jaish-e-Mohammad, have been using digital wallets and crypto channels to fund terror operations while masking financial flows.While Pakistan met key compliance benchmarks to exit the FATF greylist, it remains under follow-up by the Asia Pacific Group (APG), as the country is not a FATF member. The follow-up ensures Islamabad continues aligning with FATF’s global anti-money laundering (AML) and counter-terror financing (CTF) standards.The greylist, formally known as the list of jurisdictions under increased monitoring, identifies countries with “strategic deficiencies” in curbing financial crimes and terror funding. India’s National Risk Assessment 2022 has highlighted Pakistan as a high-risk source of terror financing, citing persistent threats despite formal FATF compliance. A recent FATF report also noted rising instances of state-sponsored terrorism and flagged Pakistan’s National Development Complex as a proliferation risk in South Asia.

Terror funding for attacks in India

In July this year, the global terror funding watchdog reported that explosives used in terrorist attacks in India were procured through e-commerce platforms. The revelation came in connection with attacks in Pulwama and at the Gorakhnath temple in Uttar Pradesh.Digital platforms, including social media, messaging apps, and crowdfunding sites, are increasingly being exploited for terror financing. Reported forms of support range from direct financial contributions to logistical or material assistance, as well as the provision of training.The Pulwama attack in 2019, planned and carried out by Jaish-e-Mohammed, saw transfer of large quantities of explosives in the country. A massive amount of the components used in the explosive devices used in the attack was acquired via electronic commerce platforms.The agency also said that the Pahalgam terror attack also could not have taken place without financial backing and without any route to transfer funds between terrorists and supporters.The FATF wrapped up its fourth plenary session in Paris under Madrazo’s presidency, attended by delegates from over 200 jurisdictions. The session approved the first mutual assessments under FATF’s new risk-based framework and removed Burkina Faso, Mozambique, Nigeria, and South Africa from the greylist after completion of their action plans.Reaffirming FATF’s global mission, Madrazo said, “FATF remains committed to strengthening standards and ensuring implementation so we can protect people by reducing terrorist financing worldwide.”