FATF Warns Pakistan, Stresses Continued Vigilance Against Money Laundering and Terror Financing

Paris, October 25 The Financial Action Task Force (FATF), the global watchdog on terror financing and money laundering, has issued a warning to Pakistan, stressing that its removal from the FATF greylist in October 2022 does not grant it immunity from international scrutiny. Speaking at a press conference following the FATF plenary session in France, FATF President Elisa de Anda Madrazo emphasised that countries previously listed must continue to strengthen their financial oversight and remain vigilant against criminal and terrorist financial activities. She cautioned that delisting does not mark the end of the monitoring process. “Any country that has been on the greylist is not bulletproof against the actions of criminals — be they money launderers or terrorists. We invite all jurisdictions, including those that have been delisted, to continue their work to prevent and deter such crimes,” Madrazo said. Pakistan, although delisted, remains under follow-up scrutiny by the Asia Pacific Group (APG), which monitors the country’s implementation of anti-terror financing measures. FATF itself does not have Pakistan as a member, but the follow-up process ensures compliance with international standards. The greylist is designed to identify countries with significant strategic deficiencies in countering money laundering and terrorist financing. Countries on the list face enhanced monitoring and are expected to adopt reforms to close loopholes that could be exploited by criminals and terrorist organisations. Madrazo underscored that Pakistan’s delisting represents progress, but not a full cessation of obligations. “Delisting is not the end of the process. We expect countries to strengthen their systems and address vulnerabilities that criminals exploit,” she said. The warning comes amid concerns that Pakistan-based terror groups, such as Jaish-e-Mohammad (JeM), are increasingly using digital wallets and complex financial networks to fund training camps, a risk highlighted in FATF’s recent “Comprehensive Update on Terrorist Financing Risks.” India’s National Risk Assessment 2022 similarly identifies Pakistan as a high-risk source of terror financing, particularly through state-linked entities like the National Development Complex (NDC). These assessments underscore the persistent threat of state-sponsored terrorism and proliferation financing in the region. FATF’s Paris plenary also highlighted its continued global mandate to strengthen financial standards and enforce implementation through rigorous assessment and monitoring. “Our aim is simple — to deprive terrorists and criminals of the funds they rely on,” Madrazo said. During the session, the FATF adopted two new mutual evaluation reports under updated, results-focused criteria. Belgium and Malaysia were the first countries assessed under the new framework, which prioritises tangible outcomes over mere procedural compliance. The plenary also saw Burkina Faso, Mozambique, Nigeria, and South Africa removed from the greylist after successful completion of their action plans, demonstrating FATF’s commitment to recognising progress while maintaining high standards for global financial security. Pakistan’s continued monitoring highlights the need for sustained reform and vigilance against emerging risks in terrorist financing and money laundering, ensuring that progress achieved through delisting translates into lasting compliance and regional stability. FATF Warns Pakistan to Stay Vigilant Against Money Laundering and Terror Financing The Financial Action Task Force (FATF) has cautioned Pakistan that its removal from the greylist in October 2022 does not exempt it from global scrutiny on money laundering and terror financing. FATF President Elisa de Anda Madrazo emphasized that delisting is not the end and countries must continue strengthening systems to prevent criminal and terrorist financial activities. Reports highlight Pakistan-based terror groups using digital wallets and masked financial flows to fund operations. The Asia Pacific Group monitors Pakistan’s compliance, while FATF continues global assessments to ensure nations close loopholes and deprive criminals of illicit funds.