Jan 26 – Pakistan has faced sustained international scrutiny over alleged money laundering and terrorist financing, with critics arguing that authorities have repeatedly failed to make deep institutional reforms needed to curb both practices.
Those concerns saw the Financial Action Task Force (FATF) place Pakistan on its “grey list” three times between 2008 and 2022: from February 2008 to June 2010, February 2012 to February 2015, and June 2018 to October 2022.
During the latest period, a FATF-affiliated body, the Asia-Pacific Group (APG), conducted an onsite evaluation mission from October 8 to 19, 2018. Its 2019 Mutual Evaluation Report cited significant shortcomings in Pakistan’s anti-money laundering and counter-terrorist financing framework, including gaps in implementing the FATF action plan.
FATF also said in a public statement after its February 2019 Paris plenary that Pakistan had not shown a sufficient understanding of terror-financing risks linked to groups such as ISIS, Al Qaeda, Jamaat-ud-Dawa, Lashkar-e-Taiba, Jaish-e-Mohammed, the Haqqani Network and individuals affiliated with the Taliban.
In 2022, Hafiz Saeed—founder of Lashkar-e-Taiba and described by Indian authorities as a key figure in the 2008 Mumbai attacks—was sentenced to 33 years in prison on terror-financing charges, rather than for carrying out terrorist violence, according to the account.
Later that year, FATF said Pakistan had completed all 34 action-plan items and removed it from the grey list following its October 2022 plenary in Paris. However, the account argues that open-source investigations continue to allege militant groups operate from Pakistani soil, sometimes through proxies and evolving funding methods, including outfits such as Jaish-e-Mohammed, which is listed under the UN 1267 sanctions regime and proscribed by several countries.
