FATF condemns Pahalgam attack, to release report on ‘state-sponsored terror’ for first time

The Financial Action Task Force is the global money laundering and terrorist financing watchdog and sets international standards that aim to prevent these illegal activities. File
| Photo Credit: AP

The Financial Action Task Force (FATF), the apex inter-governmental anti-terror financing watchdog, has issued a statement condemning the Pahalgam terror attack, noting that it “could not occur without money and the means to move funds between terrorist supporters”.

According to sources, this is a significant condemnation as it is only the third time in the last decade that a terror attack has been condemned by the FATF. Further, it is learnt, that the FATF will release a report next month which, for the first time, will include state-sponsorship as a separate source of funding of terror.

The Hindu had reported earlier about how the government was sending a dossier to the FATF to argue in favour of including Pakistan in the ‘grey list’ of countries that warranted greater scrutiny. 

“Terrorist attacks kill, maim and inspire fear around the world,” the FATF said in a statement. “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.”

According to sources aware of these developments, the FATF “rarely” issues a condemnation of terrorist acts. 

“It is only the third time in the last decade that they have issued a condemnation of a terrorist attack,” the source said. “It has issued the condemnation because the international community has felt the severity of the attack and highlights that such attacks will not go unpunished.”

According to the sources, the ⁠FATF has also developed a Terror Financing Risk & Context toolkit for assessors, so that countries such as Pakistan cannot “fool them with lies” about the terror financing risks from their jurisdictions.

The FATF will soon release a comprehensive analysis of terrorist financing and will host a webinar to help public and private sectors understand the risks, and stay alert to emerging threats. Sources said this report would be out in a month.

“The ⁠FATF is releasing a report on terror financing risks in a month’s time,” the source said. “This is the first time the concept of ‘state-sponsored terrorism’ is being acknowledged by FATF as a funding source. Only India’s National Risk Assessment recognises state-sponsored terrorism from Pakistan as a key terror financing risk.”