Will Pakistan finally act on terror finance?

(The Editor's Pick is a new newsletter from The Hindu that provides a snapshot of the most important stories from today's edition of our newspaper, along with a note from our top editors on why we chose to give prominence to these stories.)

International terror-financing watchdog Financial Action Task Force has retained Pakistan on its "grey list" for increased monitoring till February 2021. Pakistan has received several extensions to comply with the 27 conditions that the FATF had laid down when it was put on the grey list in June 2018. Now, the watchdog has found that the country has complied with only 21 of those. The remaining issues include preventing charitable organisations from working as fronts for terror organisations, and delayed prosecution of terrorists such as Lashkar-e-Taiba's Hafiz Saeed and Zaki Ur Rahman Lakhvi, as well as Jaish-e- Mohammad's Masood Azhar.

The "grey list" is a popular term for a set of countries that the FATF says have "strategic deficiencies" in fighting terror financing, including the likes of Sri Lanka and Ethiopia. Continuing non-compliance could land Pakistan on the black list -- countries that FATF consider high-risk and ask member nations to deploy counter-measures --along with North Korea and Iran. However, China has stepped in to prevent backlisting when Pakistan was at risk of being downgraded earlier. At yesterday's meeting, Turkey had fought for Pakistan to be removed from the grey list, however the move did not get any support even from China. Pakistan needs the support of three of the 39 FATF member countries to stay off the blacklist, and 12 to get off the grey list.

Pakistan was placed on the grey list primarily as a U.S. move against the country. While Pakistan has been involved in the Afghan peace process --a possible appeasement of the U.S. -- the unresolved issues such as the slow movement on the 26/11 attack case and Masood Azhar remaining "untraceable" are of concern to India. These are also issues that are allegedly connected to the powerful military establishment in Pakistan, making further compliance with FATF a dicey issue. While the Imran Khan government has passed some laws on terror financing towards FATF compliance, it is likely that it will now look to diplomatic outreach to get it off the grey list. The question of whether the pressure will stay on Pakistan to resolve these India-related issues is what makes this story important.