FATF points to fund trail, slams Pahalgam attack

Hindustan Times

16-06-2025

The Financial Action Task Force (FATF) has condemned the April 22 terror attack in Pahalgam saying it could not have occurred without money and means to move funds between terrorist supporters, which Indian officials described as an important first direct statement by the global terror financing and money laundering watchdog and a positive step in New Delhi's renewed attempts to put Pakistan back on the grey list.
Countries in the grey list are subject to increased scrutiny, given an action plan, and their implementation of this is monitored every four months. If they fail to show any progress, then they are pushed to the 'black list' and subjected to counter measures. Countries currently on the FATF black list are Iran, Myanmar and North Korea.
The global body further said that it has enhanced its focus on the effectiveness of measures countries have put in place, identified gaps in terror financing, and will soon release a comprehensive analysis on that.
'Terrorist attacks kill, maim and inspire fear around the world. The FATF notes with grave concern and condemns the brutal terrorist attack in Pahalgam on 22 April 2025. This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters,' the statement titled 'Strengthening efforts to combat terrorist financing' said.
A government official, who did not wish to be named, said, 'FATF rarely issues condemnation of terrorist acts. It is only the third time in the last decade that they have issued condemnation of a terrorist attack.' The watchdog had earlier issued condemnation in 2015 and 2019 of severe terrorist attacks. 'It has issued the condemnation because the international community has felt the severity of the attack and spotlights that such attacks will not go unpunished,' he added.
FATF developed a TF [terror financing] Risk and Context toolkit for assessors, so that rogue states such as Pakistan cannot fool it with lies, he said. 'FATF is releasing a report on TF risks in a month's time. This is the first time the concept of 'state-sponsored terrorism' is being acknowledged by FATF as a funding source. Only India's National Risk Assessment (NRA) recognises state-sponsored terrorism from Pakistan as a key TF risk. The inclusion of 'state-sponsored terrorism' as a concept in the report demonstrates international recognition of state-sponsored terrorism by Pakistan,' he said.
He quoted FATF president Elisa de Anda Madrazo's recent comments, '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.'
People familiar with the statement said an Indian team comprising officials from the ministries of home and finance, the Enforcement Directorate (ED), and other agencies, which had travelled to Strasbourg, France, for the FATF plenary from June 10-13, highlighted Pakistan's support for terrorism, including the Pahalgam attack, in which 26 tourists were killed. 'Evidence has been provided to prove that Islamabad has failed to enforce anti-money laundering and counterterror reforms and made no headway in prosecuting UN-designated terrorists,' said an officer, who asked not to be named.
Pakistan was removed from the FATF grey list in October 2022 but Indian officials have highlighted that its support to terrorism persists and that Islamabad provides safe haven to designated terrorists. It is due for an evaluation in 2026, and Indian officials are making efforts to convey to the international community that Islamabad needs to be put back in the increased monitoring category (grey list).
Before Pahalgam, a similar statement was issued by FATF in 2019 after the Pulwama terror attack, in which 40 Central Reserve Police Force (CRPF) personnel were killed. Both the incidents forced India to respond by conducting air strikes deep inside Pakistan and brought both the countries on the brink of full-scale war.
The Pahalgam attack was raised by India last month at a UN meeting in Vienna as well, saying Pakistan based UN-proscribed terrorist groups such as Lashkar-e-Taiba, Jaish-e-Mohammad and their proxies have orchestrated attacks on Indian soil, leading to tragic loss of innocent lives.
'Incidents such as the 2008 Mumbai attacks, the attacks in Uri and Pathankot in 2016, the 2019 Pulwama suicide bombing, and most recently, the heinous terror attack in Pahalgam where 26 tourists were shot dead, remain deeply etched in our national consciousness,' the Indian government said last month in a statement in Vienna.
In response to the Pahalgam attack, India launched Operation Sindoor on May 7. Indian forces bombed nine terror camps in Pakistan and Pakistan-occupied Kashmir (PoK) in pre-dawn strikes — in which at least 100 terrorists were killed —and sparked a series of attacks and counter-attacks across the western border, involving fighter jets, missiles, armed drones, and fierce artillery and rocket duels. In one such attack on the night of May 9-10, the Indian Air Force struck targets at 13 Pakistani airbases and military installations. After four days of fighting, military hostilities were stopped on May 10 evening as the two nations reached an understanding.
The National Investigation Agency (NIA) is currently investigating the terror attack and is looking for terrorists — estimated to be four in number—who shot 26 tourists at close range before fleeing. The federal agency has interrogated several individuals including pony operators, vendors, photographers and those employed in adventure sports activities apart from hundreds of overground workers to get clues in the case.
Asserting that as terrorism continues to threaten societies and citizens around the world, FATF said in its statement on Monday that it supports over 200 jurisdictions within its global network to build and enhance their counter-financing of terrorism (CFT) measures, including through the strategic use of financial intelligence – making this 'one of the most powerful instruments for dismantling terrorist financing networks'.
It further said that 'in addition to setting out the framework for combating terrorist financing, the FATF has enhanced its focus on the effectiveness of measures countries have put in place'.
'That is how, through our mutual evaluations, we have identified gaps that need to be addressed'.
The global watchdog claimed that it has developed 'guidance on terrorist financing risk to support experts that contribute to evaluations of the 200+ jurisdictions in the global network'.
FATF asserted that it is working to improve its support to countries to stay ahead of terrorist financing risks – for example, relating to abuse of social media, crowd funding, and virtual assets -- and release a comprehensive analysis of terrorist financing.
'To improve this picture, the FATF will soon release a comprehensive analysis of terrorist financing, compiling cases provided by our global network. It will also host a webinar to help public and private sectors understand the risks and stay alert to emerging threats,' FATF added.