In a recent development, the Directorate of Revenue and Intelligence (DRI) is all set to have a discussion on trade-based money laundering with representatives of Australian Border Force, Her Majesty’s Revenue and Customs from the UK, Customs Administration of the Netherlands and Interpol through a video conferencing.
Finance minister Nirmala Sitharaman will attend the celebrations along with minister of state for finance Anurag Singh Thakur.
Trade-based money laundering is the process of disguising the proceeds of crime and moving value through the use of trade transactions by individuals, criminal networks, terrorists etc; in an attempt to legitimise its illicit origins. This is achieved through the misrepresentation of the price, quantity or quality of imports or exports.
It has been a cause of concern for global money laundering watchdog Financial Action Task Force (FATF) which has defined the basic techniques of trade based money laundering as over and under-invoicing of goods and services; multiple invoicing of goods and services; over and under-shipments of goods and services; and falsely described goods and services.
The Centre has, for past few years, stressed on cracking down on shell companies used to transfer illegal money through international trade.
Referring to the shell companies, Thakur had said in Parliament in September this year that more than 380,000 companies have been struck off the official records under companies law in the past three years. He had said that such companies are used for illegal purpose, such as tax evasion, money laundering, obscuring ownership and benami properties.
DRI is an important enforcement agency under the ministry of finance that deals with countering organised crime groups engaged in smuggling of contraband goods such as arms, ammunitions and explosives, narcotic drugs and psychotropic substances, gold and diamonds, counterfeit currency notes, wildlife items, hazardous and environmentally sensitive materials and antiques.
The directorate also has expertise in unearthing commercial frauds, plugging leakage of government’s tax revenue and countering trade based money laundering and black money. It has Customs Mutual Assistance Agreements with over 60 countries, where thrust is on information exchange and learning from the best practices between customs administrations.
In Financial Year 2019-20, the DRI detected 412 cases of smuggling resulting in seizure of contraband worth Rs1,949 crore. Also, it arrested 837 economic offenders in different cases.
