Offshore destinations used by politicians, and businessmen to park black money might not be as attractive a proposition anymore as India’s asset recovery from international cooperation shows assets worth Rs 10,786.1 million (EUR 119.85 million) being seized in the last five years. This represents 7.6 per cent of all attached assets located abroad where requests were made between 2018-2023.
Improving asset recovery abroad is high on the agenda of the ED armed with legislation like the Fugitive Economic Offenders Act (2018), for recovering assets linked to absconding offenders. Other laws, including the Black Money Act and the Benami Transactions Act further support confiscation efforts.
In a first, the ED has established direct contacts with key strategic partners such as the UAE, UK, Singapore and the United States to enhance informal relationships.
Quiet strides have been made by the country’s Overseas Investigation Unit (OIU) where the Enforcement Directorate is using its specially trained staff to help coordinate formal and informal international cooperation.
The OIU steps in regularly, coordinating and discussing with key partners to monitor the progress of requests and execute them.
Sources said the ED has been receiving informal requests for assistance in money laundering cases through channels such as Camden Asset Recovery Inter-Agency Network (CARIN), Asset Recovery Interagency Network Asia Pacific (ARIN-AP), as well as a number of bilateral arrangements.
Sharing risk profiles in the financial sector has become part of this international cooperation in the last 4-5 years and this isn’t being done alone by the ED, the Financial Intelligence Unit of the Finance Ministry (FIU-IND), National Investigation Agency and Intelligence Bureau are also engaging with counterparts abroad.
The Financial Action Task Force Mutual Evaluation in September revealed that while India may not be an attractive destination for criminal proceeds, although cross-border risks for money laundering and terror financing exist, New Delhi is prioritising requests coming from other countries and collecting digital and other perishable evidence and criminal intelligence involving financial crimes reducing the response time to their foreign counterparts from 1000 days in 2018 to 195 days in 2022.
An estimate shows the response time anywhere between 1.5 months to a year to revert to foreign counterparts.
The outcome is that during the last four years, 106 requests related to money laundering were received by the ED out of which 83 requests (approximately 78 percent) have already been executed.
What are ED’s seven ways of identifying money laundering cases?
While there is much speculation on what is the basis for the ED’s money laundering probes, it has told the FATF that it can identify money laundering cases in seven ways- open sources, referrals from law enforcement agencies through ED nodal officers, ED identification through an IT system that monitors predicate cases like the Crime and Criminal Tracking Network and System), the initiation of the ED’s director, referrals from ongoing cases, FIU dissemination as well as international cooperation.
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Meanwhile, the agency is training its officers to detect predicate activity that is most likely to result in money laundering cases where techniques of investigation, asset tracing capability, drafting of statutory orders, inter-agency cooperation, as well as developing a skill set for intelligence collection, using covert and overt tools, has become the focus.
Today, ED investigators have access to various databases and information exchange systems like Crime and Criminal Tracking Network and Systems (CCTNS), FINNET and National Intelligence Grid. When needed, the ED can also seek information from overseas open databases to develop evidence.
The PMLA allows for unlimited fines imposed by Special Courts based on the nature of the offence and its extent.
While the powers of the ED act as a deterrent, it also gives the agency a wide canvas for money laundering investigations.
As per ED’s estimates, the average custodial sentence for money laundering convictions is 4.8 years, ranging from 3 to 7 years, while the average fine is Rs 1.05 million (approximately EUR 11,515), with fines ranging from Rs 5,000 (EUR 55) to INR 20 million (EUR 219,300).