Islamabad is buzzing with the impending news of Pakistan’s likely removal from the “grey list” of the Financial Action Task Force (FATF), the global body which combats terror financing. While Pakistan’s exit from the FATF grey list is not yet a done deal, the fact that the country has cracked down on some terror out-fits – albeit under sustained pressure and even if not with the rigour with which it ought to have – has raised hopes in the Pakistani establishment. 

Especially as the FATF president announced on 17 June the approval of Pakistan’s performance report at the organisation’s plenary session in Berlin. The powers-that-be in Pakistan is touting this as “recognition” of the action taken by them against terrorists and terror organisations listed by the United Nations (UN) operating from their country. 

Over the past few years, FIRs and charge sheets have been filed against over 40 terrorists (including some whose names are figured in dossiers shared by India). They include Hafiz Saeed, Masood Azhar, Yahya Mujahid, and Zaki-ur-Rehman Lakhvi who have been sentenced to imprisonment ranging from nine to 30 years in terror financing cases. 

But these convictions are open to further judicial processes. The suspicion in India, especially among the policy hawks, is that the action taken thus far by Pakistan is aimed solely at getting off the FATF list and has little to do with any genuine change in its policy of using terror as an instrument of state policy. 

The betting is that if all goes well for Islamabad in the October review of its grey list by the FATF, this “tokenism” will be exposed in the months that follow. New Delhi, therefore, continues to be wary of taking Islamabad at face value; in fact, it expects both an increase in acts of terror and a spike in terror financing if Pakistan exits the FATF grey list. 

Media reports quoting senior intelligence and security officials say the flow of arms and IEDs being sent into Jammu and Kashmir from across the border continues uninterrupted and that Indian security forces see Pakistan’s list of so-called actioned points submitted to the FATF as a sham. 

The reality, according to the Indian security establishment, is that Pakistan remains a safe haven for terrorists as is evidenced by the fact that convictions in the 26/11 terror attack case remain a far cry and many of those who plotted it including Sajid Mir roam unmolested. 

Action has also been conspicuously absent against Talha Saeed (son of 26/11 mastermind Hafiz Saeed), who is now the face of Jamaat-e-Dawa, the parent organisation of the globally proscribed Lashkar-e-Tayyaba. 

But there is no denying that FATF scrutiny and the costs it has imposed on Pakistan have curbed business as usual. More than 1,000 properties of India-centric terrorist organisations have been confiscated by the Pakistani state, over 1,000 bank accounts of these organisations and individuals connected with them have been seized or frozen, and there has been a sweeping crackdown on their social media presence. If Pakistan can build on this, India could take the opportunity to work with the relatively moderate Shahbaz Sharif regime to contain the spread of terror across South Asia emanating from Pakistan.