India to push FATF to put Pak on its grey list again

Hindustan Times

23-05-2025

India will push for placing Pakistan in the grey list again at the Financial Action Task Force's (FATF) plenary meeting in June , making available evidence that Islamabad failed to enforce anti-money laundering and counter-terror reforms and made no headway in prosecuting UN-designated terrorists, a senior official said.
There is a strong case to put Pakistan back in the grey list, this person added on condition of anonymity. The global money laundering and terrorism financing watchdog holds three plenary meetings that usually take place in June, October and February of each year. Pakistan is due for an evaluation in 2026 and non-compliance or slippage could result in a grey listing.
Countries in the grey list are given an action plan, and their implementation of this is monitored every four months. If countries in the grey list fail to show any progress, then they are pushed to the 'black list' and subjected to countermeasures. Countries which do not participate in FATF's mutual evaluation process – Iran and North Korea, for instance -- are also blacklisted.
Pakistan's inclusion in the grey list would hurt its credit worthiness and the cash-strapped country will face severe difficulties in getting financial institutions such as the World Bank and the International Monetary Fund (IMF) to support it. In October 2022, FATF took Pakistan off its grey list after the country ostensibly strengthened the effectiveness of its anti-money laundering (AML) and counter-terrorism financing (CFT) regime.
India hopes to make a case by highlighting Pakistan's support for proscribed terrorists such as Hafiz Abdul Rauf, a US-designated terrorist and senior Lashkar-e-Taiba (LeT) operative, who was seen in images of a funeral attended by Pakistani army personnel after India's strikes at terror hubs in Pakistan and Pakistan occupied Kashmir as part of Operation Sindoor, a response to the targetted killing of 26 people, 24 of them Hindu, in a terror strike at Pahalgam, Jammu & Kashmir. Pakistan tried to pass off the terrorist as an 'ordinary family man'.
India will also oppose any funding for Pakistan at the World Bank's upcoming meetings, the official said. The World Bank holds two key meetings in a year – Spring meetings in April and Annual meetings in October. India is making all efforts to expose Pakistan's clandestine support to terrorists.
According to a second official, who too asked not to be named, India's strong protest at the IMF against extending development loans forced the multilateral agency to impose about a dozen stringent conditions on the country. 'Pakistan is unlikely to meet those conditions and thus it would not be able to avail the IMF funding,' he claimed. He added that while IMF cannot stop project-specific funding when all required criteria are fully met, India's effort to highlight Pakistan's terror links and flag possible diversion of funds led to the multilateral institution imposing 11 conditions.
'India is not against multilateral agencies such as IMF and World Bank extending financial support for the development of people of Pakistan. But, there is ample evidence that these development funds are diverted by Islamabad from development projects to arms purchases and terror funding,' he said.
Citing data available with multilateral agencies, the second person added: 'Pakistan spends on average around 18% of its general budget on 'defence affairs and services', while even the conflict-affected countries spend far less on average (10-14% of their general budget expenditure). Further, Pakistan's arms imports increased dramatically from 1980 to 2023 by over 20% on average in the years when it received IMF disbursements in comparison to years when it did not receive the same.'