The Financial Action Task Force (FATF), the global watchdog for money laundering and terror financing, has strongly condemned the brutal terrorist attack in Pahalgam, Jammu and Kashmir, on April 22, 2025, which resulted in the deaths of 26 people. FATF highlighted that such terrorist acts are not possible without financial resources and mechanisms to transfer funds between terrorist networks. The statement emphasized that terrorism continues to kill and instill fear globally and underscored the importance of disrupting financial channels that support such violence.

Following the Pahalgam attack, India launched “Operation Sindoor” on May 7, targeting terrorist infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK). This military action led to a three-day-long confrontation between the two countries. While FATF did not explicitly name Pakistan in its statement, India has declared its intention to present a case against Pakistan's role in terror financing and push for its re-listing on the FATF grey list.

The FATF statement followed its recent plenary meeting, during which Indian officials reportedly raised concerns about Pakistan’s support for cross-border terrorism and highlighted specific attacks on Indian soil. FATF stressed that its focus has evolved beyond just setting global standards to assessing the actual implementation and effectiveness of anti-terror financing measures in member countries. It acknowledged that mutual evaluations have revealed significant gaps in existing frameworks that need urgent attention.

To enhance global understanding and counter-terror strategies, FATF announced that it would soon publish a comprehensive report on terrorist financing, using case studies shared by its international network. The organization will also host a webinar to help both public and private sectors stay informed about evolving threats and the necessary precautions to prevent them.

Referencing a speech by FATF President Elisa de Anda Madrazo at the recent "No Money for Terror Conference" in Munich, the watchdog reiterated the need for global unity in combating terrorism. The president noted that while terrorists need only one successful attempt to cause harm, law enforcement and security agencies must succeed every time to prevent attacks. This highlights the constant vigilance required to counter terrorism effectively.

The FATF also provided an update on Pakistan’s status. Though Pakistan was removed from the grey list in October 2022, it was placed under an enhanced follow-up process due to its partial compliance with Recommendation 38. This recommendation deals with mutual legal assistance (MLA) related to freezing and confiscating the proceeds of crime, especially when crimes are committed outside the country, but the assets are located within it. Despite issuing MLA guidelines, Pakistan was found to have significant shortcomings in its ability to assist other countries in tracking and freezing terror-related finances.

In conclusion, FATF’s strong stance on the Pahalgam attack signals growing international concern about terror financing. The watchdog’s commitment to improving global anti-terror frameworks and its scrutiny of countries like Pakistan underline the critical role financial systems play in enabling or dismantling terrorist networks. India’s diplomatic push to re-expose Pakistan’s lapses further illustrates the geopolitical implications of terror finance monitoring.