In a rare but powerful move, the Financial Action Task Force (FATF) has publicly condemned the brutal terror attack in Pahalgam that claimed 26 lives on April 22, 2025. This statement, titled “Strengthening efforts to combat terrorist financing”, underscores the global urgency to tackle the deep-rooted financial networks that fuel terrorism.
While terror attacks tragically continue to disrupt peace worldwide, the FATF highlighted a fundamental truth — terrorism cannot thrive without money. The statement read, “This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters.”
This condemnation has not gone unnoticed in New Delhi, where officials view it as a significant diplomatic victory, reinforcing India’s continuous efforts to expose Pakistan’s involvement in terror financing.
Why FATF’s Condemnation Matters
For those unfamiliar, FATF rarely issues public statements about individual terrorist attacks. In fact, this marks only the third time in a decade that the FATF has formally condemned a terror attack. Previous instances were in 2015 and 2019, both in response to attacks that deeply shook the international community.
That makes the condemnation of the Pahalgam attack exceptionally significant. According to sources cited by PTI, the perpetrators of the Pahalgam attack were trained by Pakistan-backed terrorist groups, further strengthening India’s stance in global forums regarding Islamabad’s complicity in terrorism.
India’s Push to Grey List Pakistan Again
Indian officials and all-party delegations have ramped up global diplomatic outreach to highlight Pakistan’s role in financing terrorism. Their key demand: reinstatement of Pakistan on the FATF grey list.
Being on the grey list (officially termed “Other monitored jurisdictions”) subjects a country to stringent financial scrutiny, restricted access to global markets, and mounting pressure to reform its financial systems. Pakistan had been placed on this list in 2018 due to its links with terror financing but was removed in 2022 after what many experts called a “superficial compliance effort.”
Re-listing Pakistan could potentially weaken the financial backbone of several terror outfits operating in South Asia and beyond.
What is FATF and Why is It Important?
The Financial Action Task Force (FATF), headquartered in Paris, France, is the global watchdog against money laundering and terrorist financing. Founded in 1989 by the G7 countries, FATF was originally focused on combating money laundering but expanded its mandate in 2001, after the 9/11 terrorist attacks, to also tackle terrorism financing.
Today, FATF has 38 member jurisdictions, including India, and two regional organisations representing the world’s leading economies and financial hubs. Alongside these, 28 international organisations — such as the United Nations, World Bank, and International Monetary Fund (IMF) — serve as observer members.
Countries failing to meet FATF standards risk being placed on the blacklist (officially called “Call for Action”), facing complete financial isolation. Currently, Iran, Myanmar, and North Korea remain on this dreaded list.
Upcoming Global Action Against Terror Financing
FATF has announced that it will soon publish a “comprehensive analysis of terrorist financing”, drawing from case studies submitted by its Global Network of 200 jurisdictions. This will provide governments, financial institutions, and private sector companies with actionable insights to stay ahead of emerging terror-financing risks.
Additionally, FATF plans to host webinars and training sessions, focusing on threats like:
- Misuse of social media platforms
- Crowdfunding for extremist causes
- Illegal transactions through cryptocurrencies and virtual assets
As FATF noted, “We have been working for 10 years to help countries stay ahead of terrorist financing risk.”
Collective Responsibility: ‘No Single Country Can Win Alone’
Speaking at the No Money for Terror Conference in Munich, FATF President Elisa de Anda Madrazo of Mexico emphasized the global responsibility involved in combating terror financing. “No single company, authority, or country can combat this challenge alone,” she said.
Her message resonated globally — terrorists need to succeed just once, but governments must succeed every time to stop them. This asymmetry makes the war on terror financing particularly challenging.
Conclusion: A Turning Point for Global Anti-Terror Financing?
With the Pahalgam attack thrusting the issue of terror financing into the global spotlight, FATF’s condemnation may very well represent a turning point in international cooperation. India’s continued diplomatic efforts, combined with mounting global awareness, may push Pakistan toward renewed scrutiny.
The release of FATF’s detailed terror financing analysis could set the stage for more stringent regulations, better monitoring, and, most importantly, global unity in the fight against terrorism.
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