Posts Tagged ‘India’

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Modi cocks gun and takes aim at illicit money

June 1, 2014

Newly elected prime minister Narendra Modi is reportedly putting the finishing touches on a new framework to tackle illicit money in India. While some of the new task force’s work will probably be geared toward ferretting out money allegedly stashed in Swiss bank accounts by political opponents, their objectives will also include the detection of hawala and terrorist financing.

Illicit money has been flowing into India from Kashmir and Pakistan for years under the Congress party’s nose. Modi’s BJP party must act as quickly as possible in order to begin reversing that.

Thanks to Sumon Chakraborty for sending this in from India Today:

Black money: Modi’s task force is almost ready

It could be the first big step from PM-designate Narendra Modi to bring back black money stashed abroad.

Sources in central agencies tell Indiatoday.in that a framework for a new task force to deal with black money has been prepared.

“Under the directions of senior officials of Department of Revenue, this task force has been created. It will be headed by the Financial Intelligence Unit,” said an official, requesting anonymity.

Central agencies such as the Enforcement Directorate, the Income Tax Department and Directorate of Revenue Intelligence are the members of the task force.

The task force will deal with black money derived from corruption, money laundering, hawala, terrorist financing or through off-shoring of wealth via tax havens.

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Terrorist tycoon ‘mortally afraid’ of Modi

May 26, 2014

Terrorist billionaire and organized crime kingpin Dawood Ibrahim is said to be “mortally afraid” of India’s newly elected prime minister, Narendra Modi.  So much so that he has fled his longtime safe haven in Karachi for a city within the Taliban’s control on Pakistan’s border with Afghanistan.  Such a move suggests that Dawood Ibrahim is paying off the Taliban as an extra layer of security protection–a potentially highly lucrative arrangement for the Taliban.

As Money Jihad predicted at the end of last year, Modi’s election would, “represent a significant threat to the established criminal and terrorist underworld in India and Kashmir that are being backed by Pakistan.”  More recently, Modi has promised to crack down on illicit money, hawala, and tax evasion.  At long last, Dawood can see the writing on the wall.

From DNA on May 20 (hat tip to @RushetteNY):

Scared of Narendra Modi, Dawood Ibrahim, gang members go in hiding

Tuesday, 20 May 2014 | S Balakrishnan

With Narendra Modi all set to become the prime minister, India’s most-wanted don, Dawood Ibrahim, has relocated himself to an unknown location close to the Af-Pak border, which is under the Taliban. His base has been in Karachi.

During the poll campaign, Modi had told a Gujarati news channel that he would bring Dawood to India from Pakistan if he comes to power. Now that Modi is in power, the general expectation of the intelligence community is that he will tighten the screws on Dawood. Fearing a commando-type operation, Dawood is believed to have shifted his base to a remote corner and got the ISI to beef up his security.

“With Modi coming to power, he is mortally afraid,” an intelligence official said. It is expected that Modi may seek the services of Ajit Doval, retired chief of the Intelligence Bureau (IB) who is known for his brilliant operational capabilities, to zero in on the don. Doval is currently associated with the Vivekananda centre in New Delhi.

BJP has already started adopting a strong position vis-a-vis Pakistan. In a recent TV debate, senior BJP leader Nitin Gadkari made it clear that the new government will have “zero tolerance” to terrorism. He said the response of the new dispensation will be vastly different from that of the erstwhile Manmohan Singh-led UPA government, which was afraid to strike.

Sushilkumar Shinde, home minister in the UPA government, had only talked about bringing Dawood back to India and had claimed that the government was in touch with the FBI for it. But RK Singh, who was the then Union home secretary and is currently with BJP, had pooh-poohed Shinde’s claim. Singh too is known to be keen on targeting Dawood and is expected to help the new government in it.

It’s not only Dawood who has done the vanishing act, even many members of his gang in Mumbai have pulled out of the metropolis. Though the police is under the Congress-NCP-led Maharashtra government, central agencies can pick up people suspected of links with terror networks and organised crime.

Former IPS officer YC Pawar, the man who effected the first breakthrough in the investigation into the March 1993 Mumbai serial blasts masterminded by Dawood in tandem with Pakistan’s ISI, is of the opinion that the don can indeed be brought to India. He had told dna recently: “Modi is a man of tremendous will power and a go-getter. These qualities are needed at the topmost level to operationalise a plan to eject Dawood out of Pakistan. I am not saying this as a member of BJP but as a professional cop who has dealt with organised crime for several years”…

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NaMo pledges new task force on black money

May 4, 2014

If elected, Indian prime ministerial candidate Narendra Modi promises to create a new task force to take five to ten percent of foreign black money seized and distribute it to law-abiding citizens on fixed incomes:

“Black money,” a catch-all term in India for illicit money, whether it is money derived from corruption, money laundering, hawala, terrorist financing, or through the off-shoring of wealth through tax havens, was referred to by Modi during remarks in February mostly in the context of tax evasion.  It appears that Modi’s proposal is somewhat narrow in focus, but he would be well-served by expanding his proposal to include all types of black money—not just wealth accumulated through graft by his political opponents that is deposited in Swiss bank accounts.

Delhi should rigorously pursue the coffers of the Indian Mujahideen and related groups through raids and asset seizures.  If authorities want to distribute a portion of those assets to middle and low income Indians, that’s fine, but the main purpose of such programs should be to dry up the finances of Islamic terrorist threats to India rather than to fund redistribution schemes.

Modi poses the most serious threat to black money of any Indian politician to date but he needs to address the total issue, not just one aspect of it.

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Armed, funded jihad: recommended reading

April 17, 2014
  • “Although funding terrorism was criminalised in Finland 12 years ago, no-one has yet been convicted”… more>>
  • Anti-tank missiles are being shipped through Turkey and Saudi Arabia to Syrian rebels… more>>
  • Pakistani front charities like JKART are funding the Indian Mujahideen… more>>
  • A love for his friend or a love for jihad? Prosecutors say Khurram Syed Sher knew exactly who he was funding… more>>
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Thousands of NGOs get foreign money but don’t report it

April 14, 2014

MHA warns of terror fundings in NGOs

India’s home ministry has found that the number of non-governmental organizations receiving funds from outside India is on the rise, and that most of the groups receiving the foreign funds aren’t reporting it as they are required to do under the law, highlighting the vulnerability that such funding goes toward terrorist purposes.

Some of the external funding involved comes from Western nonprofits that send money to Islamic front charities or alleged Kashmiri relief groups that are actually turning over the cash to jihadi militants.

India isn’t alone in the struggle to get nonprofit organizations to disclose foreign sources of funding. Compliance in the U.S. with the Foreign Agents Registration Act is a joke. Penalties for noncompliance with 501(c)(3) filing requirements are miniscule. The tendency for regulators globally is to be tougher on existing groups that have gone through the registration process rather than on discovery of groups that have failed to register.

These noncompliant groups need a site visit from the police. The policemen can wait while a manager at the NGO completes the required paperwork.

From the Daily Mail‘s India edition:

Government warns of NGOs’ vulnerability to terror funding and money laundering

By Abhishek Bhalla

PUBLISHED: 21 March 2014

Thousands of NGOs which receive foreign aid, many of whom do not file returns on such contributions, are vulnerable to terror funding and money laundering, the home ministry has warned.

Though there are more than 22,000 NGOs registered under the Foreign Contribution Regulation Act (FCRA), intelligence inputs indicate that there are many others that work secretly and are not registered.

On the other hand, 19,000 of the registered organisations do not file returns on foreign contributions.

Foreign funding for NGOs has risen by almost 12 per cent in 2011-12, with Rs 11,549 crore being pumped into these organisations from abroad every year, according to the home ministry’s latest report on the FCRA.

According to the report, foreign contributions worth Rs 2,253 crore come for activities other than the most common causes listed by the Ministry of Home Affairs for foreign contributions.

The common sectors for foreign funding are rural development, welfare of children, health, awareness camps and religious purposes.

“We need to know where this money is being used. We need to coordinate with the authorities of the donor countries and crack down on some of these NGOs,” said an official in the home ministry.

The five major donor countries are the US, Britain, Germany, Italy and Netherlands. Countries like the UAE, Mauritius, Austria, Sweden and Spain are also among the top 15 donor nations…

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India’s currency change combats counterfeiting, but backdoor still wide open for money laundering

February 28, 2014

An email from our old friend Puneet aprised us to a new initiative in India to replace old currency notes with new notes with enhanced security features.

The reason for the change is speculated by many, including the BBC, to reduce the flow of black money (including undeclared, untaxed, counterfeit, and laundered money) through India’s economy.

Indeed, counterfeiting is a national crisis in India, and the new security features on the bills should help reduce the ability of counterfeiters to replicate the notes.

But in terms of getting illegally acquired but genuine notes off the street, this program doesn’t do much to cleanse the economy from the scourage of black money.

Live Mint points out that anybody who wants to exchange their old bills for new ones will be able to do so, and they won’t have to divulge their identities:

…If one looks at the RBI announcement, it is clear that the old currency notes can be exchanged for new ones at any bank branch from April to June 2014 without any questions being asked as to the name of the person giving the notes, her Permanent Account Number (PAN), address, etc. One can exchange the notes even at branches where one does not have a bank account. It is only after 30 June that one would have to give the name and PAN to exchange high denomination currency notes. Therefore, any person having undisclosed cash in her possession can easily exchange the old currency notes till June 2014 without disclosing her identity…

Also, Money Jihad notes that there doesn’t seem to be any provision in the new currency roll-out for bank tellers to report unusual amounts of cash that are brought in for exchange, or for them to report exchanges that they suspect are being made on behalf of undisclosed third parties.  Officials should move to incorporate such safeguards.

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This Valentine’s Day, give her diamonds. (Money is easier to launder that way.)

February 14, 2014

International financial watchdog FATF has issued a report that raises concerns about the use of diamonds to launder money in five countries that voluntarily disclosed information for the report.

India cited cases of overvaluation of diamonds sold abroad as a means of transferring illicit money back to India.  Trade-based money laundering is one of, if not the largest mechanism worldwide for transferring value without being detected.

As John Cassara and Avi Jorisch have noted in their book, On the Trail of Terror Finance, “diamonds are the most condensed form of physical wealth in the world. As a result, they are widely used in global laundering and value transfer schemes.”

Cassara and Jorisch also noted that Dubai, which maintains significant business relationships with diamond dealers in Mumbai, India, “are adept at invoice manipulation,” which Dubai traders can use to transfer significant amounts of value without transferring physical money.

Thanks to Sal Imburgia for first notifying Money Jihad about the report.

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