An international watchdog said Friday it will keep Pakistan on a so-called “grey list” of countries that do not take full measures to combat money laundering and terror financing but raised hopes that its removal would follow an upcoming visit to Islamabad to determine its progress.

The announcement by Marcus Pleyer, the president of the Financial Action Task Force, was a blow to Pakistan’s newly elected government, which believes that it has mostly complied with the tasks set by the organization.

Expectations had been high in Pakistan that the FATF would announce its removal from the list at Friday’s meeting in Berlin.

Instead, Pleyer said an inspection by the FATF in Pakistan would take place before October, and that a formal announcement on the country's removal would follow. He praised Islamabad for implementing the organization’s action plans — a clear indication that Pakistan is moving closer to getting off the “gray list.”

“Pakistan is not being removed from the gray list list today. The country will be removed from the list if it successfully passes the onsite visit,” he said.

“Pakistan’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress,” the FATF said in a statement, adding that Pakistan’s “necessary political commitment remains in place to sustain implementation and improvement in the future.”

Pakistan’s foreign ministry said the FATF reviewed Pakistan’s progress in countering terror financing during a four-day meeting this week and “acknowledged the completion” of its action plans. It said a visit to Pakistan was authorized as a final step toward exiting from the “gray list.”

Pakistan’s Deputy Foreign Minister Hina Rabbani Khar, who attended the meeting in Berlin, said she was convinced that the process for Pakistan’s removal from the list would begin later this year since Islamabad had fully complied with tasks set by the FATF in recent years.

Also Friday, the FATF removed Malta from its “grey list” but added Gibraltar. Pleyer urged Gibraltar to take steps in the right direction, including focusing on the gatekeepers to the financial system.

The watchdog also expressed concerns over the Russian invasion of Ukraine, offering “its deepest sympathies for the people of Ukraine” and saying it “continues to deplore the huge loss of life and needless destruction caused by the ongoing Russian invasion.”

Because of the invasion, the organization said Friday it has decided to severely limit Moscow’s ”role and influence within the FATF,” which Russia joined in 2003. It was not immediately clear what that step entailed.

The Paris-based group added Pakistan in 2018 to the “gray list,” which is composed of countries with a high risk of money laundering and terrorism financing but which have formally committed to working with the task force to make changes.

At the time, the south Asian country avoided being put on the organization’s “black list” of countries that do not take adequate measures to halt money laundering and terror financing but also have not committed to working with the FATF. The designation severely restricts a country’s international borrowing capabilities.

Then-Prime Minister Imran Khan, who came to power in 2018, had hoped Pakistan would be removed from the list while he was in office and often stressed his administration’s effort toward that goal. He was ousted in April, in a no-confidence vote in Parliament that he claimed was a U.S. plot. Both Washington and Khan’s successor, Prime Minister Shahbaz Sharif, have denied the allegation.

Hammad Azhar, a leader of Khan’s Tehreek-e-Insaf claimed in a tweet later Friday that Pakistan’s removal from the list was now only a formality, and credited Khan’s government for this.

Pakistan’s powerful army chief, Gen. Qamar Javed Bajwa, said Friday's development was a “great achievement," adding that the military has dedicated a special taskforce to ensure the FATF's tasks are implemented.

Still, being on the Paris-based international watchdog’s “gray list” can scare away investors and creditors, hurting exports, output and consumption. It also can make global banks wary of doing business with a country.

Pakistan, whose economy has steadily declined since 2018, has said that it continues to detain suspects involved in terror financing to comply with tasks set by the watchdog. A Pakistani-based independent think tank, Tabadlab, has estimated that it has cost the country’s economy $38 billion since it was put on the gray list.

The FATF is made up of 37 member countries, including the United States, and two regional groups, the Gulf Cooperation Council and the European Commission. Currently, only Iran and North Korea are blacklisted.