India in 2018-19 made an all-time high number of requests to foreign financial intelligence units as part of probing a multitude of money laundering, terrorist financing and tax evasion cases, according to a latest report comparing last six years' data.
The Financial Intelligence Unit (FIU), the federal economic snoop agency under the Union finance ministry, sent 289 legal requests to its counterparts across the globe during 2018-19 as compared to 177 in 2017-18 and 138 in 2016-17. The comparative data for requests sent to foreign FIUs seeking cooperation in criminal tax evasion and money laundering cases during 2015-16 was 140, 55 during 2014-15 and 82 in 2013-14, the latest FIU report said.
The report, accessed by PTI, added that the FIU also received the maximum such requests (during 2018-19) from law enforcement agencies of the country– like the Income Tax Department, the Enforcement Directorate, the CBI, the National Investigation Agency (NIA), the Directorate of Revenue Intelligence (DRI) and others– over the same six years period. The FIU is the national agency to collect and analyses suspicious transaction reports, counterfeit currency reports and cash transaction reports from banks and other financial intermediaries and disseminate to various probe and intelligence agencies.
It is empowered under the Prevention of Money Laundering Act (PMLA) to do so as part of its mandate to check and flag serious crimes like tax evasion, money laundering, terror financing in country's economic channels. India is part of the global FIU network of 164 member countries as part of the Egmont Group that aims to "provide a forum for FIUs to improve understanding and awareness of issues and an opportunity for enhancement of their capacities to develop intelligence to combat money laundering and terrorist financing."
The Indian FIU became part of this grouping during the May, 2007 plenary of the Egmont Group in Bermuda. As per the report, the FIU received a total of 906 requests from investigative agencies during 2018-19 while the figures for the previous five years were: 463 in 2017-18, 132 during 2016-17, 267 in 2015-16, 96 during 2014-15 and 221 during 2013-14.
A senior official in the finance ministry said the spurt in these requests made by various probe agencies to FIU and from the FIU to its global counterparts is "primarily due to an increased number of investigations taken up by them to investigate various bank loan fraud cases, trade-based money laundering instances and high-profile tax evasion, undisclosed foreign assets holding and terror funding cases". "A number of cross-border company holdings, network of shell firms and undisclosed foreign assets are part of these financial investigations that require cooperation from another country."
"Obtaining such information about an accused or assessee via the FIU channel is the most reliable and quick legal support system apart from other such instruments available like the mutual legal assistance treaty, letters rogatory and Interpol requests," the officer said. A typical such response sent by a foreign FIU contains the banking, asset holding and in some cases residential address of the person against whom the request of criminal tax investigation has been sought, he said.
The foreign FIUs, as per the report, also made the maximum-ever "spontaneous disclosures" information to India during 2018-19 with 160 instances of providing such tax-related information voluntarily as compared to 129 in 2017-18 and 125 during 2016-17. The preceding three years had lesser numbers of this voluntary disclosure of information, the report said.
This latest report of the snoop agency, that has been submitted to the finance ministry, added that the FIU signed new MoUs (memorandum of understanding) with its counterparts in Egypt, the UAE, Bhutan and Cyprus during 2018-19. The FIU has 43 such bilateral MoUs till date, the report said.
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