India will take up terror funding charges against Pakistan to make a case for putting it back in the ‘grey list’ of Financial Action Task Force (FATF), the global money laundering and terror financing watchdog, government sources said. India is specifically going to point out the non-compliance of legal provisions that Pakistan had promised to comply with when it was taken off the grey list in 2022, sources said.
“Yes, we will take it up. Work is under progress to prepare for it,” a government source said. The government is preparing a dossier to be submitted at the next plenary meeting of likely to be held in June, sources said.
Also, India would be raising objections to a review of World Bank funding to Pakistan which is slated for June.
On May 2, about the Indian government considering the move at FATF to curb financial flows that aid the neighbour fund terror activities as part of its escalatory matrix against Pakistan for the terror attack in Pahalgam on April 22 that killed 26 civilians.
Pakistan was put in the ‘grey list’ in June 2018, and faced “increased monitoring” till it was removed in October 2022. Being in this list adversely impacts FDI and capital flows as businesses have to undertake enhanced due diligence. Government officials had earlier said this had helped curtail illicit fund flows from Pakistan into India, especially into J&K.
India had earlier this month also raised objections at the board meeting of the International Monetary Fund (IMF) for the release of funds under the $7-billion aid package for Pakistan that commenced July 2024, citing diversion of funds by the neighbouring country for nefarious activities and terror attacks.
For India to initiate a nomination process demanding a ‘grey list’ status for Pakistan, India would require the support of other FATF member countries. The plenary is the decision-making body of the FATF, which meets three times a year, usually in February, June and October.
The FATF has 40 members, and over 200 jurisdictions have committed to the FATF recommendations through the FATF-Style Regional Bodies. Pakistan is not a member of FATF, but of Asia Pacific Group on Money Laundering (APG), the largest FATF-Style Regional Body. India is a member of APG as well as of the FATF.
