The Financial Action Task Force (FATF) has issued a clear warning to Pakistan, stating that its removal from the grey list in October 2022 does not grant it immunity from the persistent risks of money laundering and terrorist financing.

The statement came during the FATF’s fourth plenary session in Paris, presided over by Elisa de Anda Madrazo of Mexico.

Madrazo emphasised that delisted countries must remain vigilant and continue strengthening their anti-terror financing mechanisms. She noted that any jurisdiction previously monitored remains vulnerable to criminal exploitation unless robust preventive frameworks are sustained.

Despite being delisted, Pakistan continues to face scrutiny from the Asia Pacific Group (APG), which oversees its follow-up implementation of FATF recommendations. As Pakistan is not an FATF member, this follow-up process ensures continued monitoring of compliance with international standards on financial transparency and counter‑terrorism financing.

FATF’s caution comes amid intelligence indicating that Pakistan-based terror organisations such as Jaish‑e‑Mohammad (JeM) are using digital wallets to conceal transactions and fund militant operations. Such developments underline the gaps that remain in Pakistan’s financial oversight systems, particularly in monitoring cross‑border or virtual financial flows.

India’s National Risk Assessment 2022 continues to classify Pakistan as a high-risk source for terror financing. The report underscores the enduring threats stemming from Pakistan’s state-linked institutions, including the National Development Complex, allegedly involved in proliferation financing across the region.

A recent FATF study, in collaboration with India and other member states, provided comprehensive insights into modern terror financing networks. It highlighted the evolving use of fintech channels and cryptocurrencies by non-state actors and state-supported groups to bypass traditional banking control mechanisms.

In addressing the global media, Madrazo reaffirmed FATF’s commitment to enhancing standards, assessments, and enforcement strategies to curb terrorist and proliferation financing. She stressed that the organisation’s goal is to ensure coordinated international action that deprives terrorist groups and organised criminals of access to global financial systems.

During the Paris plenary, delegates representing over 200 jurisdictions and observer organisations discussed future frameworks to strengthen operational compliance against illicit financial activities. The meeting also concluded the first two mutual evaluations under FATF’s new round of risk-based assessments, covering Belgium and Malaysia.

In addition, the plenary announced the removal of Burkina Faso, Mozambique, Nigeria, and South Africa from the list of jurisdictions under increased monitoring after fulfilling their respective Action Plans. This move signals FATF’s readiness to reward tangible and sustained progress in anti-money laundering and counter-terrorism financing implementation.

FATF’s renewed warning to Pakistan reinforces the ongoing international concern regarding the country’s systemic vulnerabilities to terror financing. The message remains clear: compliance is not a one-time achievement but a long-term commitment to ensuring transparent and accountable financial governance.

Based On ANI Report