Rana Sanaullah, law minister for Punjab province, said on Wednesday that Pakistan's interior ministry had issued a notification against the Saeed-founded Jamaat-ud-Dawa (JuD) charity, as well as its associated organisation, the Falah-e-Insaniat Foundation (FIF).
Pakistan feared that it might be put on the watchdog's global money-laundering and terror-financing "grey list" of FATF following some possible sanctions where it could face a major irritant in its dealing with the worldwide financial sector. "We have received the interior ministry directions and, according to that, Hafiz Saeed and his charities, like JuD and FIF, have been banned from operating in Pakistan", Sanaullah told media.
"We've taken over all the JuD and FIF assets. It will hamper our relief operations in Punjab, Balochistan, Sindh, Azad Kashmir and northern areas", Saeed said after the government's action.
"The government is confiscating the JuD and FIF's assets just to appease U.S and India, which is affecting our humanitarian services, especially in health and education sectors across the country", Yahya Mujahid, a JuD spokesman, told reporters. "We are also quite hopeful that even if the U.S. did not withdraw the nomination that we will prevail and not be put on the watchlist", he said.
Miftah Ismail said that he had held meeting Germany's relevant quarters and apprised them of the steps taken by Pakistan to comply with UN Resolutions and FATF requirements.
The action came after a high-level United Nations sanctions team visited last month to review progress against groups and individuals banned by the world body.
"If Pakistan was downgraded and put into grey list, it will have negative repercussion on the country's credit ratings".
Pakistani officials involved in the seizures of assets said failure to act against the charities could lead to Pakistan's inclusion on the FATF watchlist.
Any downgrading move by the credit rating agencies, the official said, could cause loss to the country's plan for launching another Eurobond anytime within the current fiscal year, said the official.
Pakistan, however, appears to be confident that the USA move to place Pakistan on a list of countries failing to prevent terrorism financing, will not succeed.
Within a few days, a meeting of the Financial Action Task Force (FATF) in Paris will be held where United States of America and India were planning to put pressure on the organisation to put Pakistan in the grey list, which would mean increased costs of doing worldwide business and cross-border transactions for Pakistan. Pakistan was last placed on FATF's grey list in February 2012 and stayed on it for three year.