India is a major money launderer : U.S. report

Shame on the Indian politicians who have brought our country to such low levels so that outsiders can criticise us in such way ! O Indians, please remember that the establishment of Hindu Rashtra having righteous and patriotic rulers is the only solution to all such problems ! - Editor

By Abhinandan Mishra, New Delhi

India is one of the "major money laundering countries" in the world, according to a report prepared by the US Department of State. The report, International Narcotics Control Strategy (INCSR) 2013, which was submitted last month, says that despite taking measures such as bringing amendments in Prevention of Money Laundering Act (PMLA), concerns exist about curbing hawala activities in India. The other countries listed include Afghanistan, Pakistan, Israel, Italy, Hong Kong, Russia, UK and US, among others.

According to the report, "A money laundering country is defined by statute as one 'whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking'." "However, the complex nature of money laundering transactions today makes it difficult in many cases to distinguish the proceeds of narcotics trafficking from the proceeds of other serious crime," the report adds.

The report lists the most common money laundering methods as "opening multiple bank accounts, intermingling criminal proceeds with assets of legal origin, purchasing bank checks with cash, and routing funds through complex legal structures". The report adds, "Transnational criminal organizations use offshore corporations and trade-based money laundering to disguise the criminal origin of funds. Companies use trade-based money laundering to evade capital controls. Tax avoidance and the proceeds of economic crimes are significant vulnerabilities but laundered funds are also derived from narcotics trafficking, trafficking in persons and illegal trade. Counterfeit Indian currency is also a significant problem."

India has a major problem in the area of terror financing as well: "Terrorist groups often use hawalas and currency smuggling to move funds from external sources to finance their activities in India. Indian authorities report they have seized drugs sold by India-based extremist elements to production and/or trafficking groups in neighboring countries."

The report goes on to complain, "As of December 2012, the GOI (Government of India) had not successfully won any court cases involving money laundering or confiscations. Law enforcement agencies typically open substantive criminal investigations reactively and seldom initiate proactive analysis and long-term investigations. Furthermore, while the GOI has taken action against certain hawala activities, these successes generally stem from prosecuting primarily non-financial businesses that conduct hawala transactions on the side."

It has also questioned the lack of follow-ups on leads supplied by the US law enforcement agencies to Indian agencies. "The US investigators have had limited success in coordinating the seizure of illicit proceeds with their GOI counterparts. While intelligence and investigative information supplied by the US law enforcement authorities have led to numerous money seizures, a lack of follow-through on investigational leads has prevented a more comprehensive offensive against violators and related groups."

It is important to note that the number of terror financing cases in India have shot up from 200 in 2009 to 1,400 in 2012. The Financial Intelligence Unit of India (FIU), which looks into suspicious financial transactions in the country, listed 1,444 cases of terror financing last year. In 2011, a total of 428 cases were reported. The number was 316 in 2010.

Union Home Minister Sushilkumar Shinde recently admitted that terror modules were investing in the Indian stock market. Sources said that hawala transactions, despite a close watch being kept, have not declined. "Hawala is being used to fund terror activities and despite best efforts we are still struggling to control it," a security official said.

According to officials, proceeds from drug trafficking are also entering the country through individuals and hawala. "Individuals park a specific amount of money in their account that doesn't attract the attention of the agencies. If ten such individuals use their account to collectively fund a terror strike then they will have more than enough money to arrange the resources required," added the official.

Source : The Sunday Guardian

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