FIU tracking overseas money transfers to check black money
28 April 2015
The Financial Intelligence Unit (FIU), the intelligence wing of the finance ministry, has begun tapping information on all suspicious cross-border fund transfers made from India to offshore destinations, as part of enhanced vigilance to check black money flows.
The FIU had detected over Rs7,848 crore of illegal monies stashed within the country and abroad during 2013-14, recording the highest number of cases of suspicious transactions in the country's economic channels, according to finance ministry sources.
The new system rolled out by the finance ministry's snooping wing mandates all banking and financial institutions to file formatted Cross Border Wire Transfer Reports (CBTRs) exceeding Rs5 lakh to it under the provisions of anti-money laundering laws.
All financial intermediaries and agencies operating in India have to send reports on such transactions to the FIU on a monthly basis. They should also inform the FIU of fund transfers where the funds movements are below Rs5 lakh but look "suspicious or inter-related."
"The Indian FIU is one of the few agencies of its kind in the world to have implemented this new mechanism, aimed to check black money, from the domestic economic channels to locations abroad.
"The FIU is aggressively working to enhance its new platform to analyse Illicit Financial Flows (IFF) from India which has been a major irritant when it comes to combating the menace of illegal funds. The job is being done aggressively and diligently," a senior official said, quoting the report.
The report, while commenting on the new action of the FIU, said "several studies, including those by the OECD (global economic body), indicate that developing countries lose hundreds of millions of dollars every year through illicit flows, including through trade mis-invoicing.
"It is hoped that the analysis of CBTR data will help in analysing the problem of IFF from India," it said.
FIU has notified the new measure to all banking organisations, financial intermediaries, insurance companies, payment system operators and capital market operatives under the provisions of the Prevention of Money Laundering Act (PMLA) beginning 2013-14, the report said.