NEW DELHI: Pakistan has taken satisfactory steps against terror groups, the Financial Action Task Force has said, according to diplomatic sources. The FATF at its 3-day review meeting in Beijing evaluated Pakistan’s compliance efforts vis-à-vis money laundering and terror financing.

The sources said China, United States, United Kingdom, Australia, New Zealand, Japan, among others, did not make any adverse remark on Pakistan’s action plan. The FATF statement is a major reprieve for Pakistan, which last October was asked to comply with its recommendations by February.

“America needs Pakistan to assist it in Afghanistan, as it tries to expedite a deal with Taliban, as well as in its initiatives to counter Iran, both neighbours of Pakistan. They appear to have shaped Washington’s decision to go soft on Pakistan’s compliance on FATF strictures ahead of Donald Trump’s re-election,” said a source.

The delegation from Islamabad is learnt to have convinced FATF members that it would swiftly complete the action plan to check fund flows to terrorist groups. Officials in New Delhi, however, expressed fear that the anti-terror body’s decision would lead to revival of militant groups like Lashkar-e-Taiba and Jaish-e-Mohammad, which have carried out a series of attacks on security forces in J&K and other parts of India. “FATF action may provide relief to Pakistani militant groups active in India. We expect escalation in militant activities in J&K in the coming days,” a senior government official told ET.

The official, however, added Pakistan remains in the grey list but chances of black listing looked unlikely now. Currently, Iran and North Korea are on the FATF black list. Pakistan was placed on the grey list in June 2018 and given a plan of action to be completed by October 2019, or face the risk of being blacklisted. Ahead of the Beijing meet, Pakistan lobbied hard with the US as its presence in the grey list had adversely impacted its sagging economy. Foreign minister Shah Mehmood Qureshi was in Washington last week, lobbying with the US on removing it from the FATF grey list. Subsequently, US principal deputy assistant secretary of state Alice Wells visited Islamabad this week and lauded Pakistan’s efforts to comply with FATF guidelines.

Pakistan PM Imran Khan’s trip to Davos and meeting with the US President too gave hope to Pakistan. China too came to its rescue. Beijing stated on Thursday that Pakistan made “visible progress” to strengthen its counter-terrorism financing system, which should be encouraged by the world community. “We hope FATF will continue to offer constructive support and assistance to Pakistan in its continued efforts to improve the counter-terrorism financing system and effectively fight terrorist financing,” a Chinese official said. Pakistan’s allies Turkey and Malaysia, tacitly backed by FATF chair China, provided three necessary votes to avoid blacklisting at last year’s FATF meets.