Pakistan avoids financial watchlist over militancy funding: minister

Hafiz Saeed is a prime suspect in the 2008 Mumbai attacks

Pakistan has narrowly avoided being targeted by a global watchdog over terrorism financing, the foreign minister said, after reports that the US had supported a motion to place its ally on the group's watchlist.

The country was granted a three-month reprieve by the Financial Action Task Force (FATF), according to a tweet late Tuesday by Khawaja Asif, after a meeting in Paris failed to reach agreement on the matter.

"No consensus for nominating Pakistan," Asif wrote, adding that the forum instead proposed a three-month pause along with the submission of a new report to the body.

"Grateful to friends who helped," he added.

FATF declined comment, with a spokeswoman saying any formal decision would be made by Friday.

The US State Department said it also expected a formal decision in coming days. "We're anticipating that the final decision would be made on Thursday of this week," a spokesperson said.

Earlier this month Pakistan quietly amended its anti-terror laws to ban groups listed as terrorists by the United Nations.

Following the move, officials began seizing assets from the Jamaat-ud-Dawa group, whose leader Hafiz Saeed is a prime suspect in the 2008 Mumbai attacks.

Reports claimed earlier this month that the US had tabled a motion to add Pakistan to the FATF watchlist, as ties fray over accusations that Islamabad gives safe haven to militants who launch attacks in neighbouring Afghanistan.

The FATF move rattled officials and businesses, who fear any type of financial restrictions could crimp the country's economic prospects.

Relations between Pakistan and the US have been tense since President Donald Trump lashed out at Islamabad last August, upbraiding it for sheltering "agents of chaos".

In January Trump ordered the suspension of US military aid to Pakistan, saying it was not doing enough to target the Afghan Taliban and the Haqqani insurgent group.

Pakistan had been on the FATF watchlist for years but was removed in 2015 following "significant progress" in meeting its demands.

Parliament that year approved amendments to an anti-money laundering law to make it more effective in targeting the financing of extremists and bring it into line with global standards.

FATF is an inter-governmental body established in 1989 to help combat money-laundering and financing for extremists.