India is preparing to formally raise terror financing charges against Pakistan at the next plenary meeting of the Financial Action Task Force (FATF). According to an IE report, the objective of the action is to reinstate the neighbouring nation on the global watchdog’s ‘grey list’, IE reported quoting government sources. The move is based on what India alleges is Pakistan’s non-compliance with key legal commitments made in 2022 when it was removed from the list.
Being placed on the FATF grey list subjects a country to increased financial scrutiny, affecting foreign direct investment and capital inflows. Pakistan remained under such monitoring from June 2018 to October 2022.
“Yes, we will take it up. Work is under progress to prepare for it,” a senior government official confirmed to IE. India is reportedly compiling a detailed dossier to present at the FATF plenary expected to be held in June. India also plans to object to a forthcoming World Bank review of funding to Pakistan, also scheduled for June, citing misuse of funds for supporting extremist activities.
Earlier this month, India had raised similar objections during an International Monetary Fund (IMF) board meeting that approved disbursements under Pakistan’s $7 billion aid programme launched in July 2024. India accused Pakistan of diverting aid towards destabilising activities.
To successfully push for Pakistan’s re-listing, India will need backing from other FATF member nations. The FATF, which combats global money laundering and terror financing, has 40 full members and monitors over 200 jurisdictions through regional affiliates. While Pakistan is not a full member of the FATF, it is part of the Asia Pacific Group on Money Laundering (APG), the largest regional body affiliated with the FATF. India is a member of both the APG and the FATF.