The Financial Action Task Force (FATF), the global watchdog on money laundering and terror financing, has strongly condemned the brutal terrorist attack that took place in Pahalgam, Jammu and Kashmir, on April 22, 2025. In its official statement, FATF expressed "grave concern" over the attack, which resulted in the deaths of 26 people, emphasizing that such acts of terror "could not occur without money and the means to move funds between terrorist supporters".

FATF’s condemnation is especially significant as it comes amid persistent allegations by Indian authorities regarding Pakistan’s continued support for terrorism, including the funnelling of international funds for arms procurement. The statement, while not directly naming Pakistan, aligns with India’s position that cross-border terrorism is facilitated by financial networks that enable the movement of funds to terrorist organisations.

The FATF has announced an enhanced focus on the effectiveness of measures countries have implemented to combat terror financing. This means that, beyond simply setting standards, the watchdog will closely examine how well countries are enforcing anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations. FATF mutual evaluations will continue to identify gaps and strategic deficiencies, and countries found lacking may face increased scrutiny or be placed on the "grey list," which involves closer monitoring and requirements to address deficiencies.

India is preparing a comprehensive dossier for submission to FATF, detailing Pakistan’s alleged omissions and violations of FATF norms, with the aim of advocating for Pakistan’s re-inclusion on the grey list. This move is supported by intelligence shared with key FATF member countries, and is seen as a diplomatic win for India, reinforcing its long-standing claims regarding Pakistan’s role in supporting terrorism.

FATF’s statement also highlighted the evolving nature of terror financing, noting risks associated with the abuse of social media, crowdfunding platforms, and virtual assets. The organization plans to release a comprehensive analysis of terrorist financing, drawing on case studies from its global network, and will host a webinar to help both public and private sectors stay alert to emerging threats.

FATF President Elisa de Anda Madrazo, speaking at the recent 'No Money for Terror Conference' in Munich, stressed the need for unified global action, stating, “No single company, authority, or country can combat this challenge alone. We must be unified against the scourge of global terrorism. Because terrorists need to succeed only once to achieve their goal, while we have to succeed every time to prevent it”.

FATF’s condemnation of the Pahalgam attack marks a rare and direct intervention by the global body, signalling increased international resolve to address terror financing and supporting India’s diplomatic efforts to hold countries accountable for facilitating terrorism through financial channels.

Based On A PTI Report