Pakistan Under FATF Radar Again: Fresh Report Uncovers Missile Proliferation and Terror-Financing Links

In a striking development, the Financial Action Task Force (FATF), the global authority on monitoring money laundering and terrorist financing, has once again turned the spotlight on Pakistan. A newly released report reveals serious concerns about Pakistan’s alleged involvement in both missile proliferation and the financing of terror activities—despite its previous removal from the FATF “grey list” in 2022.

Pakistan caught red-handed again: FATF's new report exposes the dirty tricks of Islamabad | Economic Times

Missile Technology Smuggling: A 2020 Shipment Revisited

A key revelation in the FATF report revolves around a 2020 incident in which Indian customs authorities intercepted a consignment of industrial autoclaves headed for Karachi. These highly specialized machines, commonly used in the manufacturing of high-energy materials such as solid-fuel missiles, were misdeclared in official shipping documents.

Investigations traced the consignment to Pakistan’s National Development Complex (NDC), a key player in Islamabad’s long-range ballistic missile program. FATF expressed grave concern over the misrepresentation of such dual-use goods, warning that such practices blatantly violate international export control norms. The use of front companies and forged paperwork, the report noted, appears to be a deliberate strategy to conceal the shipment’s true nature.

The Pahalgam Attack: FATF’s Rare Public Condemnation

FATF also made direct reference to the deadly terrorist attack that occurred on April 22, 2025, in Baisaran Valley near Pahalgam, Jammu and Kashmir. The attack left 26 innocent civilians dead, including many tourists, in what was one of the deadliest terror incidents in India in recent years.

In a highly unusual move, FATF publicly condemned the attack, stating that such an act “could not have happened without funding.” The language used in the report indicates FATF’s growing frustration with the persistence of terror financing routes, some of which reportedly originate from Pakistan. This marks only the third time in FATF’s history that it has issued a formal public censure of a specific terrorist incident.

Echoes of the A.Q. Khan Network: A Pattern of Proliferation

The report also draws troubling parallels with Pakistan’s notorious A.Q. Khan network, which from the 1970s to early 2000s exported nuclear technology to countries like Iran, North Korea, and Libya. By invoking this dark chapter of proliferation history, FATF signals that systemic flaws in Pakistan’s oversight mechanisms remain unaddressed even decades later.

The organization’s findings suggest that Pakistan has yet to implement credible and enforceable checks on its sensitive technologies, raising questions about the role of the state in enabling these recurring violations.

India’s Diplomatic Offensive: Push for Grey List Reinstatement

Reacting swiftly to the FATF report, India has launched an active diplomatic campaign to have Pakistan re-listed on the FATF grey list. A comprehensive dossier detailing Pakistan’s continued support for terrorist activities and its involvement in illicit proliferation is reportedly being prepared by Indian authorities.

According to officials, India plans to present this evidence at both the upcoming Asia-Pacific Group meeting and the FATF plenary session. New Delhi’s push is supported by several regional and Western partners who share concerns over Pakistan’s growing strategic defiance of international norms.

Economic and Political Fallout for Pakistan

The implications of a return to the FATF grey list are significant. Pakistan’s economy, already reeling under debt and inflation, could face further isolation. Grey list status brings with it heightened scrutiny, tighter monitoring, and restricted access to international financial markets.

Multilateral lenders such as the IMF and World Bank typically impose stricter conditions on countries under FATF watch. Pakistan may also find its creditworthiness downgraded, limiting foreign investment and deepening the country’s economic crisis.

Moreover, the FATF report mentions Pakistan’s lack of consistent legal actions against convicted terror financiers. Although some arrests and asset seizures have occurred, these actions have not led to significant legal convictions—something the watchdog considers a failure of implementation.

Conclusion: A Familiar Pattern Resurfaces

The latest FATF findings reaffirm longstanding concerns about Pakistan’s role in global security threats. From the misdeclared autoclave shipment to the deadly Pahalgam attack, and the resurfacing of links to historical proliferation networks, the report paints a picture of a state either complicit in or incapable of curbing dangerous activities within its borders.

While FATF stopped short of immediately re-listing Pakistan, the warning signs are unmistakable. Unless Islamabad demonstrates genuine political will and legal reforms to dismantle terror-financing and proliferation infrastructure, a return to the grey list appears imminent. With India rallying international support and global pressure mounting, Pakistan may soon face both financial consequences and a diplomatic reckoning.

(Sources: Economic Times, News18, IndiaTV News)