Will FATF put Pakistan back in Grey List? Here's how the listing could shatter Islamabad's IMF bailout dreams

While Islamabad continues to deny its involvement in cross-border terrorism, India is leaving no stones unturned to expose Pakistan in front of the world. The latest step taken by the Centre is to apprise the Financial Action Task Force (FATF) of the evidence regarding Lashkar-e-Taiba and Jaish-e-Mohammad terror camps destroyed by India during Operation Sindoor.

Will FATF put Pakistan back in Grey List?

It should be noted that the anti-terror watchdog takes action based on compliance with its anti-money laundering and counter-terrorism financing recommendations. If a Grey Listed country fails to adhere to these recommendations, economic sanctions could follow.

If India is able to expose Pakistan's funding for money laundering and terror activities, FATF could put the cash-strapped country in Grey List. Pakistan was first included in the Grey List in 2008 and later removed in 2009. It was back in the list from 2012 to 2015 and 2018 to 2022.

FATF Grey List can in turn prevent the listed country from accessing funds from bodies like the World Bank or IMF. India's FATF move comes after IMF warned Pakistan that tensions with India could affect the bailout programme's "fiscal, external and reform goals".

India had earlier abstained from voting at a key IMF meeting, objecting to the Fund's decision to provide fresh loans to Pakistan, citing potential misuse for financing state-sponsored cross-border terrorism.

New Delhi is also sending a delegation of MPs from various parties, including the opposition, to 32 countries as well as the EU headquarters in Brussels to present its resolve to counter terrorism following the deadly Pahalgam attack.

World