Security personnel during a search operation in Anantnag district, Jammu and Kashmir following a terror attack at Pahalgam (file photo)
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In the wake of the devastating Pahalgam attack on April 22, 2025, where 26 tourists lost their lives to terrorists linked to The Resistance Front (TRF), India faces a critical opportunity to hold Pakistan accountable on the global stage.
Among other responses, the Financial Action Task Force (FATF), an international body tasked with combating ‘money laundering’ and ‘terrorist financing’, offers a powerful platform for India to press its case.
The body sets the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard through its comprehensive framework, the FATF Recommendations, aimed at tackling illicit global financial flows.
With the next plenary meeting slated for June 2025, fresh findings on Pahalgam’s cross-border funding links could prove decisive in determining whether Pakistan is placed back on the “grey list”.
Pakistan’s tangled history with the FATF
Pakistan has a well-documented history of scrutiny by the FATF, marked by repeated placements on the grey list due to persistent deficiencies in its AML/CFT regime and, crucially, its failure to effectively counter ‘terrorist financing’ emanating from its territory. This includes inadequate action against UN-designated terrorist groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).
Despite its removal from the grey list in October 2022 following acknowledged progress on technical action plans, India voiced scepticism, emphasising the necessity of verifiable, irreversible, and sustained action against terrorism, highlighting a cyclical pattern where Pakistan’s compliance efforts may not be consistently maintained.
Notably, Indian intelligence and security assessments regard TRF as a proxy of the Pakistan-based Lashkar-e-Taiba, a UN-designated terrorist entity with a long history of attacks against India, including the 2008 Mumbai carnage. Reports suggest that senior LeT commander Saifullah Kasuri, a close aide of Hafiz Saeed, orchestrated the Pahalgam attack with support from operatives in Pakistan.
India can strategically leverage the FATF framework by focusing squarely on Pakistan’s persistent failure to meet its obligations under FATF recommendations, particularly in the context of the Pahalgam attack’s links to LeT.
Building a case
A key focus must be Pakistan’s non-compliance with FATF Recommendation 6, which mandates targeted financial sanctions against UN-designated terrorists and their organisations.
Despite LeT’s UN designation, India should present concrete evidence to the FATF demonstrating Pakistan’s continued failure to effectively implement these sanctions against LeT and its key operatives, including those linked to the Pahalgam attack. This evidence must include the continued presence and activities of LeT leaders and operatives within Pakistan.
Furthermore, India must meticulously present the financial trails of TRF operations, detailing how funds and resources originate from Pakistan and reach the operatives involved in the Pahalgam attack. This can be achieved by leveraging intelligence reports from agencies like the NIA and the J&K Police.
Supplementing this with open-source intelligence analysis to trace financial networks, including the use of hawala channels or cryptocurrency, and providing specific transaction details and linkages where possible, will strengthen the case.
Despite Pakistan’s assertions of action against UN-designated terrorists, India should underscore the lack of effective prosecution and conviction of key leaders and the continued operational capacity of their organisations.
Crucially, presenting evidence of the involvement of Pakistan’s ISI in supporting and guiding these terrorist groups is essential, directly implicating Pakistan in ‘state-sponsored’ terrorism.
What’s next for India?
Navigating the complex geopolitical landscape is paramount to India’s efforts. The stances of key FATF members heavily influence outcomes.
The United States, the United Kingdom, and France have historically demonstrated a strong stance against terror financing and are potential allies for India.
Conversely, China, a close ally of Pakistan, may provide diplomatic resistance. The positions of Saudi Arabia, a key player, and the UAE, recently removed from the grey list and potentially more inclined to support strict standards, also hold significant weight and can be complex. The broader geopolitical dynamics, particularly the US-China rivalry and Pakistan’s close ties with Beijing, add layers of complexity. This necessitates sustained and nuanced diplomatic engagement with key member countries.
India must emphasise the universal threat of terrorism and the imperative of upholding FATF standards irrespective of political alignments.
Given the FATF’s consensus-based decision-making and the potential for politicisation, India’s strategy must focus strategically on presenting undeniable technical evidence of Pakistan’s non-compliance.
Moreover, the issue must be consistently raised at FATF Plenary meetings and working groups, emphasising Pakistan’s repeated failure to meet its commitments and advocating for concrete action, including re-listing on the ‘grey list’ or even blacklisting.
The writer is a student at the Rajiv Gandhi National University of Law (RGNUL)
Published on May 6, 2025
