Tuesday, February 14, 2012

[HumJanenge] Black money deposits by Indians largest, says CBI

Black money deposits by Indians largest, says CBI

NEW DELHI: CBI director AP Singh on Monday acknowledged that Indians are the largest depositors of illegal money in banks abroad with an estimated $500 billion - nearly 24.5 lakh crore - stashed away in tax havens.

"It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss Banks are also reported to be Indians," the CBI director said while speaking at the inauguration of first Interpol global programme on anti-corruption and asset recovery. According to Singh, India has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, British Virgin Islands, etc.

Singh also said the investigations by his agency into the recent scandals have been pointing to transfer of large amounts of money to tax havens. "In some of the recent important cases being investigated by CBI, such as 2G, CWG and Madhu Koda cases, we find that money is taken to Dubai, Singapore, Mauritius, from where it goes to Switzerland and other such tax havens.

For criminals, all it involves is setting up of a few shell companies and then making layered transfers from account to another in a matter of hours as there are no boundaries in banking transactions," he said.

Singh said accessing information about illegal transactions was a time-consuming process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.

"53% of the countries said to be least corrupt by the Transparency International Index are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven," Singh said.

He said there is a lack of political will in the leading tax haven states to part with the information because they are aware of the extent to which their economies have become "geared to this flow of illegal capitals from the poorer countries."

Singh said tracing, freezing, confiscation and repatriation of stolen assets is a legal challenge, a complex process which requires expertise and political will.

"Managing the asset recovery investigation is complex, time-consuming, costly and most importantly requires expertise and political will. There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries," Singh said.
From – Economic Times, 14.2.12.

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