By Staff Reporter
ISLAMABAD: India’s latest attempt to tarnish Pakistan’s financial reputation has fallen flat, as the global money laundering watchdog chose to keep Islamabad under a reporting mechanism rather than relegating it to a more punitive status, despite New Delhi’s concerted push, state broadcaster Radio Pakistan reported on Saturday.
“India has once again faced diplomatic failure on the global stage,” Finance Minister Muhammad Aurangzeb said.
At the heart of the recent Financial Action Task Force (FATF) meeting, India sought to drag Pakistan back onto the grey list, a designation signaling deficiencies in combating money laundering and terrorism financing.
Yet, Pakistan’s allies, including China, Turkey, and Japan, stood firm, spotlighting Islamabad’s strides in bolstering its financial oversight. The FATF ultimately held Pakistan’s current standing, a decision that underscores a diplomatic stumble for India.
The FATF, tasked with setting international benchmarks to thwart money laundering and terrorist financing, first placed Pakistan on its increased monitoring list, commonly called the grey list, in 2018.
That move pointed to gaps in Pakistan’s anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. But by October 2022, Pakistan had clawed its way off the list, having tackled a rigorous set of action items and shored up its AML/CFT systems.
“This time around, during the latest FATF plenary session, India’s delegation, with Israel in its corner, pressed hard to reverse that progress,” local newspapers reported. “They argued that Pakistan’s efforts remained incomplete and that risks lingered.”
They reported that New Delhi aimed to wield the FATF as a cudgel to squeeze Pakistan diplomatically. “But China countered forcefully, pushing for recognition of Pakistan’s compliance with FATF standards. Turkey and Japan also support, emphasising the tangible steps Islamabad had taken to tighten its financial controls.”
In the end, the FATF brushed aside India’s lobbying. Rather than demoting Pakistan, the watchdog opted to keep it under a “reporting” mechanism, a status that acknowledges improvement but requires regular updates on AML/CFT efforts to ensure adherence to global norms.
India’s gambit at the FATF fits into a wider playbook. Since Operation Bunyamum Marsoos, Indian diplomatic outposts have ramped up efforts to paint Pakistan as a haven for financial crime and terrorism funding. Yet, that narrative has struggled to stick overseas.
The member states largely viewed New Delhi’s campaign as negative propaganda, choosing instead to credit Pakistan’s advancements.
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