The Financial Action Task Force (FATF), the global watchdog against terrorist financing and money laundering, reviewed Pakistan’s progress during its October 2021 plenary session and decided to retain the country on its Grey List. Pakistan at the time claimed that Jaish-e-Mohammed (JeM) chief Maulana Masood Azhar was “untraceable” and a proclaimed offender, while making a token gesture by placing Jamaat-ud-Dawah (JuD) chief Hafiz Saeed under house arrest. These superficial moves were insufficient to prevent continued censure.
Despite repeated calls by FATF to demonstrate credible action—specifically through investigations and prosecutions targeting senior leaders of UN-designated terrorist organisations—Pakistan remains far from compliance. Groups such as JeM and JuD continue to operate openly, organising meetings, conferences, and social media campaigns with impunity, a clear indication of the tacit support they enjoy from the state.
Between September and December 2021, JeM’s Maulana Masood Azhar regularly published incendiary articles glorifying jihad. In September he celebrated the Taliban’s “Islamic victory” in Afghanistan. On 10 September, JeM organised a conference titled Salam Shuhada-e-Islam, at which it openly declared intentions to launch fidayeen attacks in India, with cadres already deployed at the Line of Control. Banners urged donations to fund militancy, while JeM also circulated a 2022 training calendar for “basic” and “advanced” courses at madrassas in Karachi and Bahawalpur—thinly veiled terror training programmes.
JuD and its affiliates have been no less active. They continued to run radicalisation campaigns, openly soliciting donations for mosque and madrassa construction projects—fundraising fronts that in practice finance militant recruitment and training.
Pakistan has been under FATF scrutiny since 2018, facing reviews every four months to assess progress against a detailed action plan. Yet Islamabad shows little appetite for genuine reform. Its continued support—whether active or passive—for proscribed terrorist groups has not only undermined global security but has also come at a steep domestic cost.
An Islamabad-based think tank, Tabadlab, in its paper Bearing the Cost of Global Politics – The Impact of FATF Grey-Listing on Pakistan’s Economy, estimated that Pakistan’s repeated placement on the FATF Grey List between 2008 and 2019 may have resulted in cumulative GDP losses of up to USD 38 billion.
The FATF plenary scheduled for 21 February to 4 March in Paris will be a crucial test. The continued free rein of UN-designated groups inside Pakistan highlights Islamabad’s indifference to FATF standards. After years of half-measures, deliberate inaction, and economic self-harm, Pakistan’s case no longer merits indulgence. Its persistent failure to curb terrorist financing and dismantle militant networks makes it a strong candidate for elevation from the Grey List to the Black List.