NEW DELHI: Global terror financing watchdog FATF on Friday decided continuation of Pakistan in the "Grey List" and warned the country that stern action will be taken if it fails to check flow of money to terror groups like the LeT and the JeM, sources said.

The decision has been taken at the Financial Action Task Force's plenary in Paris. The FATF decided to continue Pakistani in the "Grey List". The FATF also warned Pakistan that if it doesn't complete a full action plan by June, it could lead to consequences on its businesses, a source said.

According to a report in the Dawn newspaper, the international terror financing watchdog was set to give Pakistan time till June 2020 to achieve full compliance with its 27-point action plan and secure exit from the FATF grey list.

Sources from Paris said that Pakistan was found fully or close to fully compliant on more than half of the 27 targets. "We are satisfied with the progress so far. There was no case at all for blacklisting us," a source was quoted as saying in the report.

Pakistan is already finalising major amendments to at least a dozen of its laws to meet the FATF requirements by June this year.

Based on that, the country's performance would be judged in the next FATF plenary in October 2020, the report said. Pakistan submitted a 650-page review report to the FATF on January 8.

The report was submitted in response to 150 questions raised by the FATF regarding new Pakistani policies on money laundering. The report outlined the steps taken by Pakistan between October 2019 to January 2020 to implement the group's recommendations.

In January, Pakistan urged the US to support its bid to exit from FATF's grey list ahead of a key meeting of the international terror financing watchdog in Beijing in which Islamabad's efforts to adopt stricter laws against terror financing and money laundering were scrutinised.