Washington, January 30 – The Financial Action Task Force (FATF), the global watchdog on money laundering and terrorist financing, has raised serious alarms about Pakistan’s compliance with its 40 recommendations. While the country’s legal framework appears aligned on paper, ground-level implementation reveals glaring inconsistencies that allow terror networks to thrive.
A comprehensive FATF update report on 2025 terrorist financing risks highlights rapid shifts in funding methods. Terror groups linked to Pakistan are ditching traditional banks for fintech platforms to evade detection, making oversight increasingly challenging.
In an analysis for ‘The Cipher Brief,’ Washington-based national security analyst Siddhant Kishore warns that Pakistan will once again project itself as a responsible counter-terror partner at the FATF plenary and working group meetings in Mexico City in February 2026. ‘Far from South Asia’s violence, conference rooms will see Pakistan tout compliance reports, legal amendments, and reform promises to polish its image,’ he writes.
Kishore points out a stark disconnect: Pakistan’s financial laws mimic those of other developing democracies on paper, but terror-financing networks persist and adapt relentlessly. ‘This growing gap between form and function is what Western policymakers must confront ahead of FATF’s next review,’ he asserts.
Citing open-source intelligence and documented financial patterns, the report details how groups like Jaish-e-Mohammed (JeM) and Lashkar-e-Taiba (LeT) – designated by the UN – have not been dismantled but modernized. They exploit humanitarian crises like the Gaza conflict to raise funds under the guise of relief efforts.
JeM chief Masood Azhar’s son Hammad Azhar and brother Talha al-Saif are using digital wallets through fake charity appeals and mosque reconstructions, the analysis reveals. These networks collect micro-donations and cryptocurrencies, hopping between scattered wallets and platforms to dodge identification.
Funds are allegedly funneled to bolster terror infrastructure, including over 300 new mosques and rebuilding sites damaged in India’s 2025 ‘Operation Sindoor’ – locations tied to LeT training camps.
The report urges US and EU delegations at the Mexico meeting to push for ‘results-based assessments’ focusing on ongoing probes, verified asset seizures, and dismantling enablers of terror financing. Failure to act could undermine global efforts against these evolving threats.