FATF Intensifies Scrutiny on Terror Financing Post-Pahalgam Attack

FATF Responds to Pahalgam Terror Incident

In a strong statement, the Financial Action Task Force (FATF) condemned the horrific terror attack that occurred in Pahalgam on April 22, 2025, emphasizing its commitment to evaluating the effectiveness of countries' strategies against terror financing.

The FATF expressed deep concern over the attack, stating, "Terrorist acts inflict harm and instill fear globally. The recent Pahalgam incident, along with others, highlights the crucial role of financial resources in facilitating such violence."

This statement aligns with India's ongoing efforts to draw attention to Pakistan's continuous backing of terrorism and its misuse of international funds for military purposes.

Sources indicate that Pakistan's actions may lead to its inclusion in the FATF's 'grey list'.

The Pahalgam attack, carried out by terrorists trained in Pakistan, resulted in the deaths of 26 individuals.

India has consistently accused Pakistan of harboring terrorists, a claim underscored by the presence of senior military officials at the funerals of terrorists killed in Indian military operations on May 7.

As the Asia Pacific Group (APG) of the FATF prepares for its meeting on August 25, followed by the plenary session on October 20, India is compiling evidence against Pakistan regarding its compliance with FATF's anti-money laundering and terror financing regulations.

India plans to advocate for Pakistan's grey listing during these discussions.

Currently, 24 nations are on the FATF's grey list, which subjects them to heightened scrutiny and requires them to rectify significant deficiencies in combating money laundering and terrorist financing.

Pakistan's relationship with the FATF's grey list began in February 2008, when it was first placed under monitoring. It was removed in June 2010 but was reinstated in February 2012, only to be delisted again in February 2015.

The country was added back to the list in June 2018 and was last removed in October 2022, with the FATF urging Pakistan to continue enhancing its anti-money laundering and counter-terrorism financing systems.

The FATF serves as the global authority on money laundering and terrorist financing, establishing international standards to combat these illicit activities.

The organization reiterated its commitment to supporting over 200 jurisdictions in strengthening their counter-terrorism financing measures, utilizing financial intelligence as a key tool in dismantling terrorist funding networks.

The FATF also highlighted its ongoing efforts to identify and address gaps in countries' measures against terrorist financing through mutual evaluations.

For the past decade, the FATF has been proactive in helping nations mitigate risks associated with terrorist financing, including issues related to social media exploitation, crowdfunding, and virtual assets.

A comprehensive analysis of terrorist financing cases will soon be released by the FATF, along with a webinar aimed at educating both public and private sectors about emerging threats.

FATF President Elisa de Anda Madrazo emphasized at the recent 'No Money for Terror Conference' in Munich that combating terrorism requires a unified global effort, stating, "No single entity can tackle this challenge alone. We must work together to prevent terrorism, as it only takes one successful attack for terrorists to achieve their goals, while we must succeed every time to thwart them."