Some FATF members - notably arch-rival India - could then push for Pakistan to be moved to the organization's blacklist, which would reduce the country's access to the global financial system and potentially disrupt its $6 billion International Monetary Fund programme, the people added. That could trigger a balance of payments crisis, raising the stakes for China and others to head off the move.
Pakistan has been on FATF's "grey" monitoring list since last year, after a campaign by the US and European nations to get the country to do more to combat militancy and close financing loopholes to terrorist groups.
Since then, Pakistan has been asked to comply with a list of 27 measures - including identifying and supervising terror financing risks and boosting controls on illicit currency movement - to avoid joining Iran and North Korea on the blacklist. India has been pressing for such a move after holding Pakistan-based groups responsible for terrorist attacks in Mumbai in 2008. Relations deteriorated further this week over India's move to revoke autonomy for Kashmir, where India accuses Pakistan of supporting terrorists.