India is preparing to present a strong case to the Financial Action Task Force (FATF) for re-adding Pakistan to its "grey list" due to Islamabad’s continued failure to adhere to international norms on anti-money laundering and countering the financing of terrorism, a senior government official confirmed.
“We will be taking it up [with the FATF],” the official stated when asked about India’s plans to push the global watchdog to reconsider Pakistan's compliance status. The move comes in the wake of the deadly terror attack in Pahalgam on April 22, which claimed the lives of 26 civilians. The attack has significantly escalated tensions between the two neighbouring countries.
Indian authorities maintain that Pakistan has not taken sufficient action to curb terrorism emanating from its soil. Additionally, New Delhi accuses Islamabad of misusing funds from multilateral agencies to procure arms and ammunition instead of addressing the core issues flagged by international watchdogs.
Under FATF guidelines, countries with serious deficiencies in tackling money laundering, terrorist financing, and financing of weapons proliferation are placed under increased monitoring, commonly referred to as the "grey list." Inclusion in this list signals that the country has formally committed to resolving these issues within a specified timeframe under the scrutiny of FATF.
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The FATF plenary—the body responsible for making such decisions—convenes three times annually, in February, June, and October.
Pakistan was previously placed on the grey list in 2018 and subsequently agreed to an action plan to combat money laundering and terror financing. After years of monitoring and implementation efforts, the FATF removed Pakistan from the list in 2022.
India, however, remains unconvinced of Pakistan’s long-term commitment to international standards. Earlier this month, India also objected to the release of a tranche from the International Monetary Fund's bailout package to Pakistan, citing ongoing concerns about the misuse of international financial support.
India's renewed push at the FATF is part of a broader diplomatic strategy to hold Pakistan accountable for cross-border terrorism and ensure compliance with global financial safeguards.
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