CAN INDIA PUSH PAKISTAN INTO FATF'S ‘GREY LIST’?

Islamabad has been in the FATF Grey list thrice since 2008 before it was removed from the list in October 2022

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Story so far: In a rare show of condemnation, the Financial Action Task Force (FATF), on June 16, 2025, stated that the Pahalgam terror “could not occur without money and the means to move funds between terrorist supporters”. FATF’s has released such a statement only twice in this decade -- for the Paris terror attack (2015) and the Pulwama attack (2019). The terror watchdog’s stern stance has given hope for India to push its case to bring Pakistan back into the ‘grey list’ for violating the FATF’s policy on terror-funding.

Apart from condemnation, FATF will release a report next month, which will include state-sponsorship as a separate source of funding for terror. The Hindu reported that the FATF has also developed a Terror Financing Risk & Context toolkit for assessors, so that countries cannot “fool them with lies” on terror financing risks from their jurisdictions. Pakistan has been placed ‘thrice’ in the ‘grey’ list of the FATF after it failed to take adequate measures to curb terror financing and money laundering.

FATF first placed Pakistan on the grey list in 2008 after it failed to fight terror financing and money laundering. After cooperating with FATF’s mutual evaluations, Pakistan was given an action plan to stop criminalisation of money laundering, identify, freeze and confiscate terrorist assets. It was removed from the list in 2015 owing to its progress but was reinstated in 2018.