The international anti-money laundering watchdog-FATF is committed to deter the flow of black money in the international market and to curb the cult of terrorism– caused by financial assistance both regionally and globally. Since its genesis in 1989, the FATF body is busy in exploiting the task of marinating transparent norms, stipulations and by-laws that seem to have posed tumultuous challenges for the global South. It is essential to ensure that the global AML/CFT standard is well understood and accurately implemented and that countries and their financial institutions are provided with support in designing AML/CFT measures that meet the goal of financial inclusion. In October 2019. FATF had retained Pakistan on its ‘Grey List’ till February 2020 for its failure to take adequate action against money laundering and terror financing. Over the past year, the co-operative, mild-mannered world of anti-money laundering, or AML, policymaking has fundamentally descended into an international bar-room brawl. The fraying of global norms has affected the hitherto technical world of AML as it takes on an increasingly political hue. For 30 years, global standards on tackling money-laundering and other forms of financial crime have been set by the Financial Action Task Force, a body made up of nearly 40, mainly rich, countries. Until recently, the FATF has enjoyed a monopoly on assessing countries’ AML standards and updating “grey lists” of those that fall short three times a year. The country representatives who attend FATF meetings – many of them veterans of years of attendance – guard this role jealously. FATF Recommendations and Glossary that clarify how the Recommendations apply in the case of financial activities involving virtual assets. These changes add to the Glossary new definitions of “virtual assets” and “virtual asset service providers” The origins of the AML/CFT regime are located in the dual consequences of globalization, both the rapid economic growth resulting from increasing financial and capital liberalization and negative externalities undermining the financial system, and the changing pattern in global governance toward new, softer types of international regulation and institutions as alternative regimes to address issues of global concern. Compliance with the AML/CFT international standards is examined using the assumption that states’ behaviour, or misbehaviour, regarding their international obligations can be analyzed in terms of causality with different variables. Inspired by the regime and managerial approaches, the compliance of a FATAF regime is a function of specific determinants of which the regime is made acting on their own but more often with greater impulse arising out of their interaction. The present analysis relies on a mixed analytical-empirical methodology to analyze selected variables such as the soft law nature of the AML/CFT normative regime, its institutional design, compliance monitoring and sanction process, and legitimacy. Understanding compliance with the international AML/CFT standards, however, is distinctively marked by the considerable impact of soft power. The intrinsically soft law nature of the AML/CFT standards contributed significantly in shaping the policies and laws of many countries, forcing recognition of the ML threat Given the urgent need for an effective global, risk-based response to the AML/CFT risks associated with virtual asset financial activities, the FATF has adopted changes to the FATF Recommendations and Glossary that clarify how the Recommendations apply in the case of financial activities involving virtual assets. These changes add to the Glossary new definitions of “virtual assets” and “virtual asset service providers” – such as exchanges, certain types of wallet providers, and providers of financial services for Initial Coin Offerings (ICOs). These changes make clear that jurisdictions should ensure that virtual asset service providers are subject to AML/CFT regulations, for example conducting customer due diligence including ongoing monitoring, record-keeping, and reporting of suspicious transactions. They should be licensed or registered and subject to monitoring to ensure compliance. The FATF will further elaborate on how these requirements should be applied in relation to virtual assets. The FATF policy exclusively focuses on de-risking as the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach. “De-risking” have various reasons, such as concerns about profitability, prudential requirements, anxiety after the global financial crisis, or reputational risk. This issue of de-risking is of crucial importance because of the fact: De-risking can introduce further risk and opacity into the global financial system, as the termination of account relationships has the potential to force entities and persons into less regulated or unregulated channels. Moving funds through regulated, traceable channels facilitates the implementation of AML/CFT measures; 1- successfully investigate and profoundly prosecute against money laundering and terrorist financing;2-Properly train law enforcement and prosecutorial authorities, and equip them with sufficient powers and resources; 3- Deprive criminals of their criminal proceeds and the resources needed to finance their illicit activities; 4- Implement effective mechanisms to freeze, seize and confiscate criminal assets. scions to implement effective measures to both the financial and non?financial sectors about their business to be able to differentiate rds that could be crucial for intelligence unit for analysis and possible dissemination to law and institutions and other businesses and professions comply with AML/CFT financial institutions and requirements. The European Union announced to impart its technical support to Pakistan for the implementation of the Financial Action Task Force (FATF) action plan by the country, according to a media report. On November 13, Pakistan’s Parliamentary committee passed a bill which will allow the government to get information about foreign assets and bank accounts of Pakistani citizens. The said Bill– The Mutual Legal Assistance (Criminal Matter) Bill, 2019- will also allow other countries the respective information from Pakistan. An official of the Chinese foreign ministry said Beijing disapproves of the politicisation of FATF as several countries are pursuing a political agenda against Pakistan. “China stood with Pakistan and blocked any attempt to place it on the blacklist. We have made it clear to the United States and India that China cannot do this and it goes beyond the purpose of FATF,” Yao Wen, Deputy Director-General for Policy Planning of Asian Affairs, told a group of visiting Pakistani journalists in Beijing. In November 2019, The European Union announced to impart its technical support to Pakistan for the implementation of the Financial Action Task Force (FATF) action plan by the country, according to a media report. In this connection, a joint press release issued at the conclusion of the 10th session of the EU-Pakistan Joint Commission in Brussels on November 16, said the two sides emphasised the importance of the implementation of FATF action plan by Pakistan. Like other developing economies of the developing world, Pakistan faces crucial challenges in terms of complying the FATF regulations. Being already put on FATF grey-list, the government of Pakistan has to constantly work out a policy fulfilling TATF set goals or targets. In recent months, Islamabad has taken profound measures to combat terror financing. The NAP-set plan is underway to take the course towards convincible progress. But a gradual policy approach is always pragmatic for the developing economy like Pakistan. But a polarized FATF- approach towards Pakistan cannot be taken as a right move. Though it is expected that Pakistan may stay on FATF’s grey list beyond February, Islamabad expects that its reform-promoting efforts must be positively reciprocated by FATF’s forward-looking approach. And therefore, Islamabad rightly expects from the upcoming FATF plenary to remove Pakistan from its Gray-list benchmarking. Needless to say, a neutral, disinterested FATF’s role free from bodi politic is inevitable to fulfil FATF’s policy credo.