FATF Flags Pakistan Over Illicit Weapons Funding Network
The Financial Action Task Force (FATF) has issued a global alert highlighting Pakistan’s alleged role in the financing of illicit weapons networks. The watchdog has warned that Pakistan’s failure to plug critical gaps in its financial system has created fertile ground for money flows linked to arms procurement and extremist networks.
Weapons-Funding Alert Issued
FATF’s latest risk notice warns financial institutions across the globe to exercise heightened vigilance over transactions involving Pakistani entities. The alert cites credible patterns of financial misuse, including the use of shell companies, disguised remittance routes, and laundered funds supporting underground arms supply chains. These findings are part of FATF’s broader review of global compliance with anti-money laundering and counter-terrorism financing frameworks.
Oversight and Regulatory Lapses
According to FATF’s internal assessments, Pakistan has yet to fully implement key safeguards such as enhanced due diligence and real-time transaction tracing mechanisms. The continued lack of enforcement against financial facilitators of extremist groups has drawn criticism, with particular concern over inadequate supervision of non-banking financial intermediaries and cash-based channels.
These loopholes have allowed illicit actors to finance activities that threaten not only regional but also global security, FATF noted. The agency emphasized that Pakistan has failed to meet benchmarks set during prior evaluations, despite repeated extensions and technical support.
Global Systemic Risk Identified
FATF has warned that unchecked financial activities in Pakistan now constitute a “significant risk” to the international banking system. It has urged member countries and partner financial bodies to monitor fund flows to and from Pakistan, particularly where end-use involves military-grade equipment, dual-use goods, or high-risk jurisdictions.
Urgent Call for Coordinated Action
The watchdog is now encouraging a coordinated global response. Financial intelligence units, customs authorities, and international banking regulators are being asked to strengthen inter-agency information sharing and enhance screening tools for detecting Pakistan-linked anomalies. The FATF stressed that tracking illicit weapons funding requires collaborative enforcement across jurisdictions to ensure global security and financial stability.
