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NEW DELHI : A sub-group of the Financial Action Task Force (FATF) on Tuesday recommended retaining Pakistan in the ‘grey list’ of the global terror financing watchdog for its failure to check terror funding with a final decision due later this week, two people familiar with the development said.

The decision was taken at a meeting of FATF’s International Co-operation Review Group (ICRG) at the Paris plenary, which began Sunday with more than 800 representatives from 205 countries and jurisdictions besides organizations such as the International Monetary Fund, the United Nations and the World Bank.

“Six days of meetings will focus on global action to follow the money that fuels crime and terrorism and reduce the harm caused to people and society," FATF said in a statement posted on its website over the weekend.

India said it would keep up the pressure on Pakistan to cut finances to terrorist groups, in particular seeking action against Jaish-e-Mohammed chief Maulana Masood Azhar and Lashkar-e-Taiba leader Zaki-ur-Rehman Lakhvi, diplomats familiar with the matter said. Lakhvi, along with Hafiz Saeed, are seen as the main plotters of the 2008 November terrorist attacks on India’s financial capital Mumbai, which claimed 166 lives. India has also been prepared to give locations and addresses of safe houses where Azhar and Lakhvi are said to be lodged in case Pakistan says it is unaware of where the two are.

Days before the FATF plenary was to start, Pakistan sentenced Saeed, the chief of LeT, who is accused by India of planning the Mumbai attacks, to a total of 11 years in prison for two cases of funneling money for terrorist activities. The two sentences are to run concurrently, which means that his term in prison will effectively be slightly more than five years. The move was expected to ease some pressure on Pakistan which is looking to exit the FATF’s ‘grey list’, which results in increased spotlight on the country and its financial mechanisms.

The sentencing of Saeed was welcomed by the US as an important step, which buoyed spirits in Islamabad. Washington, which is looking for a deal with the Taliban to reduce its military footprint in Afghanistan, is seen as dependent on Islamabad to ensure that a nascent peace pact with the Taliban holds, given the former’s influence on the latter.

India is expected to point out that Saeed’s conviction can go into appeal, putting the irreversibility of Pakistan’s action under question. The Indian foreign ministry had made it clear last week that it was not impressed with the Pakistani move of convicting Saeed, calling it part of the neighbouring country’s international obligations. India also pointed to the timing of the move, as it came ahead of the FATF meeting. “Hence, the efficacy of this decision remains to be seen," India had said.

According to a person familiar with the developments in Pakistan, Islamabad is looking for a favourable outcome from the Paris plenary. It is expected to show complete compliance on 16 of 27 parameters and partial compliance on nine others and one benchmark without compliance at the Paris meet. Islamabad’s argument is expected to be supported by evidence that it hopes to provide that it has two legislations in the Pakistan National Assembly awaiting passage. This will in turn show it is making progress on the last parameter where its compliance is not complete. “Pakistan will show it is making progress at the (Paris FATF) meet. Getting out of the grey list will not happen this time. However, it will happen this year either in June or in September," the person mentioned above said, referring to forthcoming meetings of the FATF. There is no question of Pakistan being blacklisted as it enjoys the support of Turkey, China and Malaysia, this person said.

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