Pakistan is under immense pressure as the Financial Action Task Force (FATF) will take a decision on whether to retain the grey list designation for Islamabad or blacklist it alongside Iran and North Korea.
The crucial decision will be announced by the terror watchdog on Friday.
Pakistan was placed on the grey list by the FATF, the global terror watchdog, in June last year and was given a plan of action to complete it by October 2019 or face the risk of being placed on the blacklist with Iran and North Korea.
The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
Earlier, sources close to the proceedings said Pakistan would remain on FATF grey list despite efforts of the country to muster votes to get off that list.
"Pakistan in pre-plenary meetings was trying to achieve two things - to get off the grey list and secondly, to block any move to be blacklisted," sources said.
What are the chances that Pakistan evades blacklist
Sources said Pakistan could avert being blacklisted where it needs three votes but may fail to get off the grey list since that requires 15 votes of support. Since China, Malaysia and Turkey are going to side with Pakistan, they have warded off the danger of blacklist which in other words is the 'FATF Public Statement'.
Even if Pakistan escapes the blacklist, it will not be completely off the hook until it proves it is genuinely severing ties with Islamist militants and take significant steps to fight terrorism.
Head of the Pakistani delegation, Minister for Economic Affairs Division Hammad Azhar, is slated to make his statement on Friday and a decision would be announced by FATF president Xiangmin Liu.
What it means for Pakistan
If blacklisted, Pakistan faces financial consequences and economic setbacks at a time when its economy is facing a balance of payment crisis.
At the ongoing plenary of the FATF, chances are high that Pakistan will be retained on the 'grey list' as it has complied with just one of the 40 recommendations set by the global anti-money laundering watchdog at the time of its inclusion in the list.
If Pakistan continues with the 'grey list', it will be difficult for the country to get financial aid from the IMF, the World Bank and the European Union, making its financial condition more precarious.
Watchdog's Asia Pacific Group critical report on Islamabad
Ahead of the current plenary, the watchdog's Asia Pacific Group on Money Laundering (APG) issued a critical report on progress made by Islamabad since last year.
Of the 40 recommendations, the report said, Pakistan fully complied with only one, largely complied with nine, partially complied with 26, and totally missed four parameters, which were mandatory if Islamabad wanted to be removed from the grey list.
It said Pakistan should adequately identify, assess and understand risks associated with militant groups operating in Pakistan such as Islamic State group, al-Qaeda, Jamat-ud-Dawa (JuD), Lashkar-e-Taiba and Jaish-e-Mohammad (JeM), which continue to raise funds openly.
Islamabad says it has seized the groups' assets and put the militants on trials, like the entire leadership of the JuD, including its chief Hafiz Saeed, the alleged mastermind of the Mumbai attacks in 2008, which killed 166 people.
"The main challenge for Pakistan is to convince the FATF that it is taking complete and irreversible steps against terrorist financing," Michael Kugelman, deputy director Asia Program at the Wilson Center think tank, told Reuters by email.
"My sense is that Pakistan has taken very real steps against terrorist financing, but so long as the state retains ties to militant groups, concerns will remain within FATF about Islamabad's genuine commitment to act conclusively," the Wilson Center's Kugelman said.
Pakistani author and analyst Ayesha Siddiqa said Pakistan was unlikely to completely abandon militant proxies any time soon.
"I would start believing when JeM infrastructure gets downsized, its leader Masud Azhar is publicly arrested and put on trial," she told Reuters. "With Afghanistan still brewing, I don't think we are close to cleaning our house."