India probing 1,704 money laundering, terror funding cases

New Delhi, June 26: India has intensified the crackdown on money laundering and terror funding, with the number of cases under probe rising to 1,704, but conviction levels remain low, an inter-governmental agency said on Wednesday.

In a report, Paris-based Financial Action Task Force (FATF) lauded India for addressing the deficiencies in its Anti-Money Laundering and Countering Financing of Terrorism regime.

The FATF, which sets standards and develops policies to combat money laundering and terrorist financing across the world, said India's compliance with global standards for such regulations had reached a satisfactory level.

But, there remains an "effectiveness issue in the process that leads from accusation to conviction" in the cases of suspected money laundering and terror funding, the agency said.

The number of money laundering investigations in India increased from 798 at the end of 2009 to 1,561 on April 30, 2013, the FATF said, quoting a status update provided by the country last month.

India is also probing 143 cases of terror funding (as on March 31,2013) in which 470 people are accused, according to the FATF's 46-page report on India.

"India is taking various actions to effectively implement the Prevention of Money Laundering Act. As a result, an increase in money laundering investigations and prosecution complaints can be observed. However, the absence of any money laundering conviction remains a serious effectiveness issue," the agency said.

On the terror financing cases, the FATF said the number of persons convicted was low, namely five between 2006 and March 2013, while there had been no convictions since April 2011.

"In addition, there were no cases under trial in 2012. These figures reflect an effectiveness issue in the process that leads from accusation to conviction in India."

The FATF, however, noted the home ministry had undertaken several awareness raising initiatives for implementation of the Countering Financing of Terrorism legislation this year.

"Even though some improvement regarding effectiveness since the 2010 Mutual Evaluation Report (of regulatory checks in India) can be observed, the deficiency regarding effectiveness remains."

Despite these concerns, India has made significant progress in addressing the deficiencies in its regulatory framework in this regard and is being removed from the regular follow-up by the FATF for its compliance status.

India was placed for a regular follow-up in 2010, after various deficiencies were found in its regulatory regime to fight the menace of black money and terror funding concerns.

Black money is a term widely used in India to describe undeclared funds, often meant to avoid taxes.

PTI