Govt detects trade-based money laundering cases of Rs 900 cr

Alleged trade-based money laundering (TBML) cases involving routing of about Rs 900 crore have been detected by financial intelligence agencies including Directorate of Revenue Intelligence (DRI).
DRI, which acts as lead agency to check smuggling and cases of commercial frauds, and Central Economic Intelligence Bureau (CEIB) have found about 200 such cases involving illegal movement of over Rs 900 crore during 2013-14 (till December), official sources said.
TBML is process of transferring or moving money through trade transactions. In practice, this can be achieved through misrepresentation of price, quantity or quality of imports or exports.
The basic techniques of TBML include over and under- invoicing of goods and services, multiple invoicing of goods and services and over or under-shipments of goods and services among others, they said.

DRI alone registered 251 cases of suspected TBML during 2012-13 involving a revenue of Rs 1,130.84 crore as against 336 in 2011-12 having duty evasion of Rs 1,280.11 crore, the sources said.
DRI officials said they in coordination with other intelligence agencies are keeping a vigil on dubious consignments going out and coming into India.

According to a Finance Ministry report on black money, international trade system is subject to a wide range of risks and vulnerabilities, which provide unscrupulous entities the opportunity to launder money.
"Companies and individuals also shift money from one country to another to diversify risk and protect their wealth against the impact of financial or political crises.

"A common technique used to circumvent currency restrictions is to 'over-invoice' imports or 'under-invoice' exports. The primary method used is the falsification of import and export invoices," the report said.
Misuse of export promotion schemes such as drawback, Duty Entitlement Pass Book, Duty Free Import Authorisation, Vishesh Krishi Gram Upaj Yojana, also lead to generation and flow of black money, it said.
"Several cases of forgery of export promotion scheme scrips or licences, meant to claim duty exemption in imports have been detected, which highlight another aspect of black money generation and movement," the report added.