The report emphasises that “the funding of terrorism, or the resourcing of a terrorist entity, by any State, is incompatible with adherence to the FATF Standards and mandate, as well as the International Convention for the Suppression of the Financing of Terrorism, and paragraphs 1(a) and 2(a) of UNSC Resolution 1373 (2001).” It further notes that “several forms of support have been reported, including direct financial assistance, logistical and material support, or the provision of training.”
A case study from Pakistan underscores these vulnerabilities. In July 2021, a vehicle-borne improvised explosive device detonated in a major city, an attack claimed by Tehrik-e-Taliban Pakistan. Investigators found that the attacker “reactivated a dormant bank account, conducted a cash withdrawal of ₹9,400 and two transactions of PKR 20,000, before closing the accounts,” using these funds to purchase the attack vehicle. Further inquiry revealed a facilitator injected “PKR 1,000,000 in cash” to support the plot.The FATF also highlights terrorists’ exploitation of digital commerce: “Terrorists have used EPOMs platforms for operational procurement—equipment, weapons, chemicals, 3D-printing materials—owing to the discretion they offer compared to physical shops.” In India, a February 2019 suicide bombing targeting a security convoy revealed that “a key component of the improvised explosive device used in the attack, aluminium powder, was procured through the EPOM Amazon platform.”
The report further documents the use of online payment services in lone-actor plots. In April 2022, an ISIL-inspired attacker at Gorakhnath Temple “transferred ₹669,841 ($7,685) via PayPal to foreign countries in support of ISIL, employing international third-party transactions and VPN services to obscure the IP address,” and “also received ₹10,323.35 ($188) from a foreign source.”
Countries exhibiting “strategic deficiencies” face “increased monitoring,” commonly known as the FATF grey list; they must commit to action plans and undergo regular review. While this report does not detail the grey-list process, the 69% deficiency rate suggests many jurisdictions remain vulnerable to heightened scrutiny unless they strengthen their counter-terrorist financing frameworks.
The FATF calls on member states to deepen cross-border cooperation, fully implement targeted financial sanctions, and extend regulation to emerging sectors, such as virtual asset service providers, in order to close loopholes terrorists exploit to fund their operations. The report warns that “methods based on informal channels and practices, such as cash transportation and usage, unregistered remittances, and HOSSPs (hawala and other similar service providers), remain very prevalent,” underscoring the urgent need for evidence-based measures aligned with India’s resolve to disrupt cross-border terrorism and hold state sponsors accountable.
