Significance of Condemnation
- FATF officially condemned the Pahalgam terrorist attack (22 April 2025).
- It noted that such attacks “could not occur without money and means to transfer funds“—directly linking terror to financing channels.
- This is only the third condemnation of a terror attack by FATF in the last 10 years, highlighting the exceptional severity of this case.
Relevance : GS 3(Internal Security) ,GS 2(International Relations)
International Concern
- The international community reportedly exerted pressure, showing global consensus on the seriousness of the attack.
- Signals growing fatigue with Pakistan’s role in cross-border terror financing.
Upcoming FATF Report
- FATF to release a report within a month that will:
- For the first time, officially include “state-sponsored terrorism” as a distinct source of terror financing.
- Mark a policy shift, aligning FATF’s global framework with India’s long-standing position on Pakistan.
- India’s National Risk Assessment is currently the only one acknowledging Pakistan’s state-sponsored terror as a financing risk.
New FATF Tools
- FATF has developed a Terror Financing Risk & Context Toolkit for assessors.
- Aim: To prevent countries like Pakistan from misleading FATF using incomplete or false data.
- Enhances transparency and consistency in assessing terror financing threats.
Public-Private Engagement
- FATF to host a webinar to sensitize public and private sector players on:
- Risks of terror financing.
- New and emerging threats.
- Importance of compliance and vigilance.
India’s Dossier
- India reportedly sent a detailed dossier to FATF urging renewed scrutiny of Pakistan, possibly to push for re-greylisting.
- Aimed at exposing continued violations by Pakistan despite previous warnings.
Broader Implications
- Policy shift at FATF adds global legitimacy to India’s narrative on Pakistan’s role in terrorism.
- May pave way for stricter sanctions, greylisting, or blacklisting, especially if Pakistan’s role is directly cited.
- Enhances international pressure on state sponsors of terrorism.
FATF – Key Facts
- Established: 1989 at the G7 Summit in Paris.
- Headquarters: Paris, France.
- Members: 39 (including India).
- Secretariat: Hosted by the OECD.
Main Objectives
- Combat money laundering, terror financing, and proliferation of weapons of mass destruction.
- Set global standards through 40 Recommendations.
Key Tools
- Maintains “Grey List” (Jurisdictions under increased monitoring).
- Maintains “Black List” (High-risk jurisdictions with serious strategic deficiencies).
- Conducts Mutual Evaluations and follow-ups to assess compliance.
India & FATF
- India became a member in 2010.
- Actively supports inclusion of Pakistan in the grey list for state-sponsored terror financing.
Recent Developments
- FATF is now recognizing state-sponsored terrorism as a key source of terror financing.
