FATF Introduces 'State Sponsored Terrorism' in Landmark Report on Global Terror Financing

In an unprecedented move, the Financial Action Task Force (FATF) has introduced the concept of 'state sponsored terrorism' in its latest report. This initiative highlights the longstanding threat that such activities pose to international peace, regional financial stability, and political systems.

India had previously identified state-sponsored terrorism stemming from Pakistan as a significant risk in its 2022 ML/TF risk assessment. FATF's July 2025 report corroborates India's concerns, specifically pointing to financial support patterns of Pakistan-based groups such as LeT and JeM. The report condemns their alleged use of e-commerce platforms to facilitate terrorist attacks, citing the 2019 Pulwama incident as a notable example.

Additionally, the report discusses the decentralization trend among global terrorist groups. Organizations like al-Qaeda have shifted from a centralized structure to regional operatives such as AQIM and AQAP, which now conduct operations independently, securing local funding. The FATF emphasizes the critical need to address these evolving financing methods to safeguard international security.