OPINION — Within the shadow of Mexico Metropolis’s historic Palacio de Bellas Artes, international monetary watchdogs will convene in February 2026 for the Monetary Motion Job Power (FATF) Plenary and Working Group Conferences. In convention rooms far faraway from South Asia’s violence, Pakistan will as soon as once more current itself as a accountable counterterrorism companion, armed with compliance experiences, legislative amendments, and assurances of reform. On paper, Pakistan’s monetary laws more and more resemble these of many growing democracies. On the bottom, nevertheless, the networks that finance and allow terrorism proceed to adapt and function with troubling resilience. The widening hole between kind and performance is exactly what Western policymakers should confront as FATF prepares its subsequent spherical of assessments.
The Compliance Phantasm
Pakistan’s removing from the FATF gray record in 2022 was broadly portrayed as a success story. Officers pointed to new anti-money laundering legal guidelines, terrorist financing prosecutions, and institutional reforms as proof of a course correction. FATF itself acknowledged technical enhancements, but it additionally emphasised that effectiveness, not laws, stays the last word benchmark. That distinction has confirmed important.
Open-source reporting and documented monetary intelligence patterns counsel that terrorist organizations corresponding to Jaish-e-Mohammad (JeM) and Lashkar-e-Taiba (LeT) haven’t been dismantled however moderately modernized. Current paperwork reveal how these UN-designated outfits exploit humanitarian crises, such because the Gaza battle, to funnel funds into terror actions. Underneath the guise of support appeals and mosque reconstructions, figures like Hammad Azhar, son of JeM chief Masood Azhar, and Azhar’s brother Talha al-Saif orchestrate campaigns utilizing digital wallets like EasyPaisa, SadaPay, and JazzCash, aggregating micro-donations and cryptocurrencies to evade detection. These efforts combination micro-donations and cryptocurrency transfers, typically using fragmented pockets buildings and chain-hopping throughout platforms to keep away from detection. Funds have reportedly supported militant infrastructure, together with the institution of greater than 300 Mosques and the reconstruction of areas traditionally linked to LeT coaching amenities broken throughout India’s 2025 Operation Sindoor.
This sample displays greater than opportunism. Pakistan’s authorized framework might align with FATF’s 40 suggestions on paper, however operational enforcement stays deeply inconsistent. Sanctioned people corresponding to Hafiz Talha Saeed have led public rallies in Lahore below police safety, issuing threats towards Indian Prime Minister Narendra Modi. In 2025, senior Pakistani legislature Rana Muhammad Qasim Midday reportedly visited militant-affiliated reconstruction websites alongside native officers, revealing overt collaboration between state and non-state actors. Recruitment drives disguised as spiritual gatherings, typically coordinated with Jamiat Ulema-e-Islam networks, have featured speeches praising Osama bin Laden and al Qaeda, delivered by JeM commander Masood Ilyas Kashmiri at amenities corresponding to Markaz Shohada-e-Islam in Khyber Pakhtunkhwa.
Collectively, these instances level to a long-standing “administration” mannequin of extremism. Militant teams usually are not dismantled however rebranded, with political fronts corresponding to the Pakistan Markazi Muslim League contesting elections whereas violence is normalized as a political instrument. As Greece-based coverage analyst Dimitra Staikou has argued, this mannequin exports instability by regional alignments and shields militancy behind formal democratic processes.
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Why Mexico Metropolis Issues
The February 2026 FATF conferences come at a second when Pakistan’s engagement with the USA and Europe is deepening whilst its inner safety scenario deteriorates. Militant violence has surged considerably, pushed by assaults from the Tehrik-e-Taliban Pakistan and Baloch rebel teams. Reasonably than prompting a clear break with all types of militancy, this instability dangers reinforcing the proxy logic that FATF scrutiny is supposed to dismantle. For Western policymakers, the hazard lies in conflating cooperation with convergence in safety priorities. Intelligence sharing, entry agreements, or financial partnerships don’t essentially replicate aligned counterterrorism priorities. As I argued beforehand in The Milli Chronicle, Pakistan’s strategic incentives proceed to reward selective tolerance of militant actors, significantly these oriented towards India. FATF’s effectiveness framework exists to check whether or not states are keen to disrupt these incentives, not merely masks them with procedural compliance.
FATF’s 2025 Complete Replace on Terrorist Financing Dangers underscores the urgency. The report highlights a marked improve in hybrid digital strategies, according to Pakistan-linked entities shifting from banks to fintech platforms to evade oversight. Though Pakistan exited the gray record in 2022 after 4 years of financial pressure, FATF President Elisa de Anda Madrazo warned in October 2025 that the removing was “not bulletproof,” citing unregulated digital transactions as a unbroken vulnerability.
Mexico Metropolis ought to due to this fact function a turning level. US and EU delegations ought to press for outcome-based evaluations targeted on sustained investigations, verifiable asset seizures, and the dismantling of facilitation networks. Explicit scrutiny have to be directed towards digital fee programs, casual charities, and micro-donation fashions that exploit regulatory blind spots. Western governments also needs to coordinate extra carefully to observe cross-border flows linked to high-risk jurisdictions, making certain that Pakistan’s reforms translate into measurable disruption moderately than rhetorical reassurance.
Conclusion: Selecting Substance Over Stability Theater
Pakistan will argue that renewed scrutiny dangers destabilizing a fragile state. That argument has been persuasive earlier than, and it has failed earlier than. Stability constructed on tolerated militancy isn’t stability in any respect; it’s deferred threat. Western capitals ought to due to this fact anchor their engagement round two imperatives.
First, worldwide companions ought to transfer past accepting legislative reforms and as a substitute situation high-level diplomatic, safety, and financial engagement with Pakistan on verifiable enforcement outcomes. This implies tying cooperation to demonstrable actions corresponding to sustained terrorist-financing prosecutions, asset freezes towards UN- and US-designated people, and the disruption of digital fundraising networks linked to teams like JeM and LeT.
Second, Washington and Brussels ought to deal with Pakistan-linked terrorist financing as a transnational monetary integrity menace, not a regional safety problem. This requires enhanced monitoring of fintech platforms, cellular wallets, charities, and micro-donation programs utilized by diaspora-linked networks in Europe and North America. FATF has repeatedly warned that terrorist teams more and more exploit digital funds and new monetary applied sciences to evade conventional controls. The EU and US ought to broaden joint typology sharing, require increased due-diligence thresholds for transactions linked to high-risk jurisdictions, and defend activists and journalists focused by transnational repression tied to Pakistan’s safety equipment.
In Mexico Metropolis, Pakistan will communicate within the language of compliance and reform. Past the convention halls, the true take a look at will probably be whether or not the networks that finance violence are lastly dismantled or quietly allowed to endure. If Western governments select substance over symbolism, this second can mark a turning level. If not, the paperwork will move, and the dangers will return—extra adaptive, extra opaque, and extra harmful than earlier than.
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