Global anti-terror financing watchdog Financial Action Task Force on Friday decided to retain Pakistan on its “grey list” and gave the country four more months to achieve full compliance with its 27-point action plan to avoid being put into the “black list”, The Hindu reported.

“All deadlines in the action plan have expired,” the task force said. “While noting recent and notable improvements, the FATF again expresses concern given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the terror financing risks emanating from the jurisdiction.”

The announcement was made at the end of the group’s plenary meeting in Paris. The Pakistani delegation was led by Minister for Economic Affairs Hammad Azhar.

Unidentified officials from the global watchdog told Pakistani newspaper Dawn that Islamabad was found “fully or close to fully compliant” on more than half of the 27 targets of the action plan. It asked the country to continue to address its strategic deficiencies and achieve 100% compliance by June 2020. “We are satisfied with the progress so far,” it added.

The watchdog warned Pakistan of stern action if it fails to check the flow of money to terror groups, PTI reported. Pakistan’s performance will be judged in the next plenary of the watchdog in October 2020.

In June 2018, Pakistan was put on FATF’s “grey list” and given a 27-point action plan to implement in order to be taken off the list. In October 2019, the watchdog indicted Pakistan for failing to deliver on 22 out of 27 targets. The task force also warned Pakistan that it would be blacklisted if it failed to achieve the targets by February 2020.

At present, the Pakistan government is finalising amendments to at least a dozen of its laws to meet the task force’s requirements. The matter was discussed in two back-to-back meetings at the Federal Board of Revenue the National Counter Terrorism Authority, and the Ministry of Interior on Wednesday and Thursday. An implementation strategy was also shared with the Pakistani delegation in Paris. New laws include the Anti-Terrorism Act, which is already pending in Parliament, and the Mutual Legal Assistance Act.

The global watchdog on Monday said several terrorist groups continue to benefit from funds raised through illegal activities and from supporters worldwide despite tight standards on the flow of money.

Without naming Pakistan, it said terrorists use various methods to launder money, including social media, identify new followers for financing, and other forms of material support. It added that individuals sympathetic to humanitarian causes or vulnerable to violent messaging are often targeted.

“The FATF has tightened its standards on terrorist financing, which has helped disrupt access to funds for groups such as ISIL and Al-Qaeda,” the watchdog added. “However, various groups still benefit from funds raised through illegal activity and from supporters worldwide.”

The global body said it was also monitoring illicit financing through new payment methods, such as cryptocurrencies.

In January, Pakistan submitted a 650-page review report to the global watchdog outlining steps taken by the country between October 2019 to January 2020 to implement the group’s recommendations.

India, which is a member of the Financial Action Task Force, has repeatedly asked Pakistan to take necessary steps to meet international standards in stopping financial crimes. Being on a blacklist of the financial watchdog has the potential to severely cripple and isolate a country financially, which could lead to a downgraded credit rating and denial of loans and developmental assistance. Islamabad’s economy is already struggling with a balance of payment crisis.

Turkish President Tayyip Erdogan had on February 14 said he would help Pakistan stay off a terrorism financing blacklist. A minimum of three votes are required for any country to escape the blacklisting.