The FATF already has Pakistan on its "grey list" of countries with inadequate controls over curbing money laundering and terrorism financing
A global anti-corruption body warned Friday that Pakistan could join a blacklist of nations failing to fight money laundering and terror financing unless it changed course within four months.
"Despite a high level commitment by Pakistan to fix these weaknesses, Pakistan has not made enough progress," Xiangmin Liu, president of the Financial Action Task Force (FATF), said in Paris.
"If by February 2020 the country has not made significant progress, we will consider further actions which potentially could include placing the country... on the blacklist," he said.
Pakistan has been on the FATF's so-called grey list since 2018, when it agreed to an "action list" of 27 measures to curb illicit money transfers used by terror groups operating in the country.
So far it has sufficiently addressed only five of them, the FATF said after this week's plenary meeting in Paris, where it is based.
Pakistan had been on the FATF grey list for years before it was removed in 2015 following "significant progress" in fighting terror financing.
Prime Minister Imran Khan, elected last year, has been struggling to stamp out terror threats while coming under pressure over painful austerity measures taken to rectify a shaky economy and conform to the terms of its latest IMF bailout.
"The Pakistani government has demonstrated strong political will to implement its action plan," Liu said.
"We will provide all the necessary training and assistance, and we have called on our members and our global network to help in that regard," he added.
Only two countries, North Korea and Iran, are on the FATF blacklist, which severely crimps their access to the global financial system as well as international aid.
On Iran, already straining under United States sanctions imposed after Washington pulled out of a 2015 deal to curb Tehran's nuclear activities, Liu said "not enough progress has been made in addressing the serious terror financing threat it poses."
As a result, FATF members moved this week to re-impose a serious of countermeasures including audits of Iranian bank branches and subsidiaries abroad.
The stricter controls would return permanently if no action is taken by the FATF's plenary meeting in February 2020, Liu said.