Key Highlights
- FATF warns Pakistan that its October 2022 grey list removal doesn’t grant immunity from terror financing scrutiny
- FATF President Elisa de Anda Madrazo stated delisted countries remain vulnerable to criminal exploitation
- Asia Pacific Group (APG) continues monitoring Pakistan’s implementation of anti-terror financing measures
- Jaish-e-Mohammad reportedly using digital wallets to fund terror camps, amassing $14 million for 313 new training facilities
- India’s National Risk Assessment 2022 identifies Pakistan as “high-risk” source of terror financing
- Pakistan’s National Development Complex flagged as proliferation financing risk in South Asia
- FATF emphasizes “delisting is not the end of the process” and demands continued vigilance
New Delhi: The Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, has delivered a stern warning to Pakistan, emphasizing that its removal from the ‘grey list’ in October 2022 does not provide immunity from international scrutiny on terror financing and money laundering activities. Speaking at a press conference in France following the FATF’s fourth plenary session under Mexican presidency, FATF President Elisa de Anda Madrazo stressed that all countries, including those recently delisted, must remain vigilant and committed to combating illicit financial activities.
“Any country that is on the grey list or has exited it is not bulletproof against criminal actions, whether by money launderers or terrorists,” Madrazo stated. She added, “We invite all jurisdictions, including those who have been delisted, to continue their good work to prevent and deter crimes”.
Pakistan Remains Under Active Monitoring
Although Pakistan was removed from the FATF grey list in October 2022 after completing a comprehensive 34-point action plan, which included enacting legislative reforms, bolstering financial oversight, and prosecuting terror financiers, the country remains under rigorous follow-up monitoring. Since Pakistan is not a member of FATF, the Asia Pacific Group (APG) has been conducting the ongoing surveillance to ensure Islamabad continues implementing anti-terror financing measures and aligning with global anti-money laundering (AML) and counter-terror financing (CTF) standards.
The FATF President emphasized that “delisting is not the end of the process,” adding, “We expect countries to strengthen their systems and close the loopholes that criminals exploit”. The grey list, formally known as the list of jurisdictions under increased monitoring, identifies countries with strategic deficiencies in countering terror financing and money laundering.
Digital Wallets Funding Terror Operations
The FATF warning comes amid alarming intelligence reports revealing that Pakistan-based terrorist organizations, particularly Jaish-e-Mohammad (JeM), are exploiting digital payment platforms and cryptocurrency channels to finance terror operations while masking financial flows. According to Indian intelligence assessments presented during the plenary, JeM has leveraged digital payment platforms like EasyPaisa to amass approximately $14 million for constructing 313 new terror training facilities across Pakistan.
This emerging threat was highlighted in FATF’s recent ‘Comprehensive Update on Terrorist Financing Risks’ report, which provided in-depth insights into evolving terrorist financing methods and emerging risks, including the increasing involvement of state-sponsored terrorism. The report flagged how digital platforms, including social media, messaging apps, and crowdfunding sites, are increasingly being exploited for terror financing through direct financial contributions, logistical assistance, and training provision.
India Identifies Pakistan as High-Risk Source
India’s National Risk Assessment 2022 has officially identified Pakistan as a high-risk source of terror financing, particularly through entities linked to the state-run National Development Complex (NDC). The FATF report, which includes substantial Indian inputs, underscores ongoing regional threats from state-sponsored terrorism and proliferation financing emanating from Pakistan.
The assessment highlights persistent threats despite Pakistan’s formal FATF compliance, with particular concern arising from the state-owned National Development Complex’s activities in the South Asian region. According to the report, Pakistan remains a high-risk jurisdiction in the region for proliferation financing, posing significant security challenges to neighboring countries.
Terror Funding Linked to Major Indian Attacks
In July 2025, FATF revealed that explosives used in devastating terrorist attacks in India, including the 2019 Pulwama attack and the Gorakhnath temple attack in Uttar Pradesh, were procured through e-commerce platforms. The Pulwama attack, planned and executed by Jaish-e-Mohammed, involved the transfer of large quantities of explosives within India, with massive amounts of components used in the explosive devices acquired via electronic commerce platforms.
These revelations underscore the evolving nature of terror financing and the sophisticated methods employed by Pakistan-based terror groups to circumvent traditional financial monitoring systems.
FATF’s Global Commitment Against Illicit Finance
Responding to concerns about terrorist attacks globally, Madrazo reaffirmed FATF’s unwavering commitment: “The FATF remains committed to continuing to strengthen our standards and the implementation through our assessment and our process to make sure we can benefit the people by having less terrorist financing”. She emphasized the organization’s simple aim: “to deprive terrorists and criminals of the funds they rely on”.
The Paris plenary concluded with the adoption of two new mutual evaluation reports under updated, results-based criteria, with Belgium and Malaysia becoming the first members assessed under the new framework, which emphasizes concrete outcomes over procedural compliance. The plenary also removed Burkina Faso, Mozambique, Nigeria, and South Africa from the grey list after completing their action plans.
