The move came days before a critical meeting in Paris of Financial Action Task Force that would take stock of the commitments by the member countries on restricting banned organizations to function.
The amendment paved the way for proscription of Hafiz Saeed and his charity organisations, which were till now exempted from prosecution.
Sources in Islamabad said this was a step towards formal action to freeze bank accounts and seize assets of groups such as the Jamaat-ud-Dawah and Falah-e-Insaniyat Foundation that have been sanctioned by the UN Security Council under Resolution 1267.
The intergovernmental body had at its plenary in Buenos Aires held in November previous year had asked Pakistan to furnish a compliance report on actions taken against the Lashkar-e-Taiba and JuD at the Paris meeting. It provokes children from parts of Pakistan and Kashmir to join the terror-group and take-home pay a jihad against India and the United States.
Saeed had approached the UNSC to remove him from the list of designated terrorists but the UNSC rejected his petition.
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It is feared that the worldwide body can take some punitive action against Pakistan, it said.
The country has authorised its government to blacklist charities linked to Saeed - Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniat Foundation (FIF). Pakistan was on the grey list of FATF earlier from 2012 to 2015.
The move will bring the Pakistani law in line with the United Nations sanctions list and remove ambiguities on the status of Hafiz Saeed, the founder of the Lashkar-e-Taiba.
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Saeed has repeatedly denied involvement in the Mumbai attacks and says the charitable organisations he founded and controls have no ties with militants.
In November 2017, Hafiz Saeed was released from house arrest by the Pakistan government, citing a lack of "evidence", however, he continues to be listed as a designated terrorist by the United Nations and as a "Specially Designated Global Terrorist" by the US. During the upcoming FATF meeting, the report will be taken up and Pakistan's efforts towards eliminating funding for Hafiz Saeed and other groups will be evaluated.
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