Context:

• International terror financing watchdog, the Financial Action Task Force (FATF) has decided to keep Pakistan on its grey list at the end of its week-long plenary meeting in Paris. 
• India had made a strong push to ensure that Islamabad is not taken off the list, in the aftermath of Pulwama terror attack. Terror outfit Jaish-e-Mohammad had claimed responsibility for the Pulwama attack.
• Paris-based FATF said Pakistan has made only limited progress in curbing money laundering and terrorism financing.
• It failed to show a proper understanding of the risks posed by terror outfits like Lashkar-e-Taiba, Jaish-e-Mohammad, Jamat-ud-Dawa and others.
• The global financial body said, Pakistan has until October this year to either comply with the demands made by FATF members or it could be blacklisted.
• The FATF has asked Pakistan to swiftly complete its action plan that includes showing sanctions were being applied in cases of money laundering and terrorism financing.
• It also has to demonstrate better cooperation between authorities, identify illegal money flows, and enhance support for prosecutors, among other measures.

Financial Action Task Force (FATF)

• FATF is an inter‐governmental policy making body established in 1989 with ministerial mandate to establish international standards for combating money laundering and terrorist financing.
• Its objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering,terrorist financing and other related threats to integrity of international financial system.
• Initially it was only dealing with developing policies to combat money laundering. But in 2001 its purpose was expanded to act against terrorism financing.
• Currently, it comprises two regional organisations and 35 member jurisdictions, including India, UK, US, China and the European Commission.