The United States' designation of The Resistance Front (TRF) as a global terror organization, believed to be behind the Pulwama terror attack, provides significant support to India’s ongoing efforts to place Pakistan on the Financial Action Task Force (FATF) grey list. Reports indicate that the Indian government has sent another letter to the FATF, urging the body to consider this request. 

After being removed from the grey list in 2022, Pakistan has been accused by India of misusing financial aid and funds, with the money reportedly being funneled into terror activities. Recently, an interim FATF report condemned terrorist acts, a rare occurrence, signaling the international community’s recognition of the severity of such attacks and the need for accountability.

Being placed on the FATF grey list means a country faces increased scrutiny over its efforts to prevent money laundering and terror financing, while its access to global trade and financial systems is restricted. Additionally, Pakistan could encounter difficulty securing loans from international bodies such as the IMF and the World Bank. The grey list serves as a warning, with the potential for the country to be moved to the more severe FATF black list if corrective measures are not taken. The next FATF meeting is expected to take place in September or October.

India has continued to make its case, sending multiple letters and engaging with FATF members, including Mexico, Argentina, Canada, and Denmark, behind the scenes. The US’s recent move to label TRF as a terrorist group has further strengthened India’s stance, giving hope to Indian officials that Pakistan’s actions will be brought to the global forefront.