What is Financial Action Task Force (FATF) and what did it say on Pahalgam terror attack? | Explained

The Financial Action Task Force (FATF) has strongly condemned the 22 April terrorist attack in Pahalgam that claimed 26 lives, stating that such brutal acts are made possible only through the flow of funds between terrorist networks.

The statement titled ‘Strengthening efforts to combat terrorist financing’ read, “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.”

Indian officials viewed this as a sign of appreciation for New Delhi’s efforts to push for Pakistan’s return to the FATF grey list. Countries on the grey list face heightened scrutiny and are required to follow an action plan, with their progress reviewed every four months. Failure to show sufficient improvement can result in being moved to the blacklist and subjected to countermeasures. As of now, the countries on the FATF blacklist (formally called the “Call for Action”) are Iran, Myanmar, and North Korea.

Earlier, as part of their global outreach programme to highlight India’s stance against terrorism following the recent terror attack, all-party delegations raised concerns about Pakistan's financing of terrorism. They advocated for Pakistan’s reinstatement on the FATF grey list as a measure to curb such funding. Being grey-listed (formally referred to as “Other Monitored Jurisdictions”) by the FATF restricts a country's access to international financial assistance. Pakistan was placed on the grey list in 2018 and subsequently removed in 2022.

The FATF rarely issues condemnations of terrorist attacks; this marks only the third time in the past decade that it has done so. It previously condemned attacks in 2015 and 2019, both considered severe enough to warrant international attention. According to sources cited by PTI, those statements emphasised that such attacks would not go unpunished and noted that they were carried out by Pakistan-trained terrorists.

What is the Financial Action Task Force (FATF)?

FATF is the global watchdog on terror financing and money laundering. It establishes international standards to combat illegal activities. Founded in 1989 in accordance with the G7 initiative to develop policies to prevent money laundering through the implementation of legal, regulatory, and operational measures, FATF's mandate expanded to encompass terrorism financing in 2001 after the 11 September attacks.

Its headquarters are in Paris, France, and it was founded by a group of seven, an intergovernmental political and economic forum, namely Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union (EU) is a “non-enumerated member”.

As of 2023, it has 38 member jurisdictions, including India, and two regional organisations, representing most major financial centres worldwide. There are 28 international organisations holding “FATF Observer” status. These include the International Monetary Fund, the United Nations, along with its six expert groups, the World Bank, and the OECD. All observer organisations have anti-money laundering as one of their key tasks.

It has announced that it will soon release a “comprehensive analysis of terrorist financing”, featuring cases submitted by its global network of 200 jurisdictions.

“The FATF has been working for 10 years to help countries stay ahead of terrorist financing risk, for example, relating to abuse of social media, crowdfunding, and virtual assets. 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,” ANI quoted it as saying.

‘No single company, authority, or country can combat this challenge alone’

While speaking at the recent No Money for Terror Conference in Munich, FATF President Elisa de Anda Madrazo of Mexico reiterated the significance of global unity. “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,” she said, while stressing the collective responsibility to prevent terrorist financing, according to ANI.

(With inputs from PTI and ANI)