Terrorist groups in Pakistan are still active through various proxy networks, continuing to finance and promote terrorism while adapting their funding strategies to avoid international detection. The Financial Action Task Force (FATF) has placed Pakistan on its “grey list” multiple times due to insufficient measures against terror financing. The Asia-Pacific Group (APG) highlighted significant deficiencies in Pakistan’s anti-money laundering and counter-terrorist financing framework during an onsite evaluation in 2018.
The FATF, in 2019, criticized Pakistan for not adequately addressing the terror financing risks posed by groups like ISIS, Al Qaeda, and others. Despite these concerns, Pakistan was removed from the grey list in 2022 after meeting all 34 action plan requirements. However, reports suggest that Pakistan is still supporting terrorism, with militant groups now using proxy organizations and new funding techniques.
According to investigations, groups like Jaish-e-Mohammed and Lashkar-e-Taiba have shifted to digital wallets, mobile payment platforms, and cryptocurrency for transactions, bypassing traditional banking channels. Jaish-e-Mohammed, designated as a terrorist organization by several countries, is allegedly using platforms controlled by the family of its founder to avoid international monitoring. The group is also accused of raising funds under false pretexts like humanitarian aid for Gaza and mosque construction.
Lashkar-e-Taiba, based in Punjab province, has reportedly resorted to collecting funds directly through digital wallets to evade FATF scrutiny. The group has initiated humanitarian projects to circumvent sanctions and operates through front organizations like Jamaat-ud-Dawa. By diversifying funding sources through humanitarian projects and religious campaigns, these terrorist outfits manage to sustain their activities while avoiding regulatory oversight.
