FATF flags Pakistan for ballistic missile violations; India poised to push for return to 'grey list'

FATF flags Pakistan's ballistic missile development

A new report by the Financial Action Task Force (FATF) has flagged Pakistan for violating international norms through its ballistic missile development program, citing a 2020 shipment bound for Port Qasim in Karachi that was intercepted by Indian customs officials.

In its latest report, 'Complex Proliferation Financing and Sanctions Evasion Schemes,' the FATF highlighted that dual-use goods essential for ballistic missile technology were mis-declared in export documents and traced directly to Pakistan’s National Development Complex, which is involved in developing long-range ballistic missiles.

“In 2020, Indian custom authorities seized an Asian-flagged ship bound for Pakistan. During an investigation, Indian authorities confirmed that documents mis-declared the shipment’s dual-use items. Indian investigators certified the items for shipment to be ‘Autoclaves’, which are used for sensitive high energy material and chemical coating of missile motors" the report mentioned.

“The sensitive items are included in dual-use export control lists of the Missile Technology Control Regime, India, and other jurisdictions," it added.

FATF on Pahalgam attack 

The report follows heightened FATF scrutiny of state-sponsored terrorism in Pakistan, particularly after the April 22 terror attack in Pahalgam, Jammu and Kashmir, which claimed the lives of 26 tourists.

The FATF condemned the attack, noting that such an incident would not have been possible without the financial resources and mechanisms enabling the flow of funds among terror networks.

“The FATF notes with grave concern and condemns the brutal terrorist attack in Pahalgam on 22 April 2025. This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters," the global watchdog said in a public release.

FATF may put Pakistan back on 'grey list'

This came amid the India's diplomatic efforts to highlight the resurgence of cross-border terrorism and expose the financial networks behind it.

An report by Moneycontrol indicated that Pakistan could be placed back on the FATF’s “grey list” for the fourth time in the coming weeks, citing sources familiar with the matter and pointing to its ongoing failure to curb terror financing.

Top Indian officials have reportedly shared intelligence with key member countries in the FATF’s Global Network - which includes over 200 jurisdictions - in a bid to build consensus for grey-listing Pakistan once again.

At the FATF plenary held last week in Strasbourg, France, India highlighted Pakistan's terror networks and the alleged support they receive from the Pakistani government, sources told Moneycontrol.