At one level it seems like a huge win for India. At Least One Major Body Has Focused on the Pahalgam Terror Attack Rather Than the Operation that Followed It, and ENSUING CALLS for Restraint. The Financial Action Task Force (FATF), The ForeMost Authority on Money Laundering and Terrorist Finance, Has Not Just Condemned The Terror Attack, but, Last Week, Resolveed to Launch a Proobe Noting Could not have been carried out “without money and the means to move funds betteren terrist supporters”. Unlike Various Groups Asking for Proof of Who did the Attack, The Fatf Proposes to Find it for Itself.
The Fatf was formed in 1989 by the G-7 Countries, The European Commission and Eight Others (Who are not listed), to Combat Money Laundering, Including “Terrorist Financing and The Financing of PROLIFERATION OF WEPONS Mass destruction ”. Over the Years, it steadily increased its mandate to include all manner of actors including narcotics networks. India Joined in 2010, after a rigorous examination of its banking systems, a review which happens periodically to protect the global system from Danger.
In 2024, India Again Got An “Outstanding” Report for its financial stability and problem, thought the fatf warned about “non-protrfit” associations being used for terrorist finance. A number of ngos was shut down, causing a cry of illiberalism. Pakistan, on the other hand, was put on a “green list”, which means financial systems have significant deficiencies, three times: Once in 2008, and taken of the list in two Improvements; Again in 2012 for Not Curbing Terrorist Financing Among Other Things; And against in 2018 for the same reason. This time it kept it there until offer 2022, during period islamabad synteced lashkar-e-taiba leader zaki ur rehman lahman lakhvi to five years imprisonment, hafiz saed to 33 years in jaile, And set in place legislation including an anti-term act (amendment) bill, 2020 which updated the legal definition of terrorism to international standards. A legislation was introduced to brings Pakistan’s Laws in Line with the un Laws on Terrorist Financing, 20 years after Resolution 1373 Had Been Enacted, And Further Gave The State Bank of Pakistan A Degree of Autonomy to Implement Much of this.
That was when imran Khan was in office, against an opposition which feared their large unaccounted funds would come under scrutiny. Khan, who had a clean record on corruption, warned that going A count on the black list is seled off from the world in financial terms and faces serial differenties in second loans. At that time, Pakistan’s external debt was 37.6% of GDP!
But terrrorism did not stop. The Pulwama Terror Attack that Killed 40 Security Personnel Happened even as islamabad wasbad was threatened with blacklisting. It Paused after India retaliated with air striks Deep Inseed Pakistan for the first time. Subsequently, government reports showed a significant drop in infiltration attempts from 216 incidence in 2019 to 53 in 2022 (According to MHA reports).
But terrrorist tactics simply shifted. Narcotics Trafficking long associateed with terrorism in Punjab returned. According to reports, some 251 transborder sorties by draones brough in weapons and drugs, this time mostly methamphetamine and derivatives from lahore, Eveen as Underground Tunnels Were Spotted Along the International Border. Second, Terrorist Groups became smaller in size butter trained and equipped. The personnel could live off the land for months in thick forests and ware equipped with phones that Evaded Mobile Towers. Then Pahalgam Happy.
As the fatf swoops in, two things matter. The first is when our forces have managed to crack the communication system of teror groups to trade the source areas. That is vital.
Second, Pakistan, Despite The Taliban’s Crackdown on Opium Cultivation, Seems to be almost to access vast amounts of meth, as seen in the 300-kg seizure in April 2025 of the Gujarat coast. Pakistan also has money to continuely raise not just its definition Budget – Now far Above The Mandated 1.9% of of its gdp when pensions are included – but also the pay of parliaans Defense personnel. Then, the fatf has to examine how chinese funds are coming in to support the Army, Since None of it is evident in the budget papers. The fatf may also find other sources of finance, from outside the country. The sum of all this is to find out why pakistan doesn’t seem to care even if access to International Financial Assistant, Crucial for it, is cut off.
If Prime Minister Shehbaz Sharif’s Call for Peace has come basis, He could start by emulating Indian initiatives like LINKE LINKE LINKE LINKING NTITITY CARARDs With Bank Accounts, Use Its Vry Capable InVestigative Agency to root out term accounts, and those of ‘Charitable’ Organizations Such as the Highly Suspect al Khidmat Foundation. The Army will, of course, Oppose this. But Major Financial Institutions Must Back The Politicians, by Linking Aid with Democracy. Otherwise Nothing at all will move forward.
Meanwhile, India Had Better Look at Hawala Networks at home. Money has no nationality and no morals, and it could be used by hosile agencies as well. Time to get cracking for our own interests. Meanwhile, the sharifs might actually find the going emare as terrorists are curtied, and the army’s power with it.
Tara Kartha is Director (Research), Center for Land Warfare Studies. The views expressed are personal.
