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Black money Investigation: Trade based money laundering by submitting fake bills now under scanner

Sunday, 10 August 2014 - 10:00am IST | Place: New Delhi | Agency: PTI

Instances of trade-based money laundering including that through submission of forged import bills is likely to be discussed by the Special Investigation Team (SIT), appointed by Supreme Court to decide on black money cases.

Revenue intelligence agencies have noticed new trends in trade-linked money laundering through misrepresentation of price, quantity and content of imports or exports. Of late, the Directorate of Revenue Intelligence (DRI) has found that some importers were submitting fake import bills to get bank remittances in their foreign accounts mainly located in Hong Kong.

"The cases of trade based money laundering will be discussed by the SIT," a source said. The SIT, which was notified on May 29, has held its first meeting on June 2. In its recent investigation, the DRI has found that some traders had submitted bills of imports for consignments that never reached Indian shores resulting in loss worth crores of rupees to the exchequer, official sources said.

The DRI has alerted the Reserve Bank of India (RBI) on this trade based money laundering and illegal transfer of funds abroad which "are being noticed more frequently now", they said. "It is suspected that big corporates are also involved in the trade based money laundering (TBML). These cases worth several crores," the source said. A TBML is process of transferring or moving money illegally through trade transactions.

The basic techniques of TBML include over and under-invoicing of goods and services, multiple invoicing of goods and services and over or undershipments of goods and services among others, they said. As many as 296 cases of suspected trade-linked money laundering were registered by the DRI officials during 2013-14 involving Rs 1,817 crore. Whereas, about 251 such cases involving an amount of Rs 1,130 crore were detected during 2012-13, the sources said.

The SIT on black money is headed by former Supreme Court judge M B Shah and has another former judge of the apex court, Arijit Pasayat, as its vice-chairman. The members of the SIT includes Revenue Secretary, Deputy Governor of Reserve Bank of India, Directors of Intelligence Bureau (IB), Enforcement Directorate (ED), Central Bureau of Investigation (CBI), Financial Intelligence Unit (FIU) and Research and Analysis Wing (RAW). Besides, chairman of Central Board of Direct Taxes (CBDT), Directors General of Narcotics Control Bureau (NCB) and DRI, and Joint Secretary (Foreign Tax and Tax Research Division-I) are also members of the group. The SIT is responsible for investigating cases of black money stashed abroad through coordination of various members.




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