India’s Supreme Court-appointed Special Investigation Team (SIT) has asked the Directorate of Revenue Intelligence (DRI), an arm of the central board of excise and customs, to investigate whether or not the country saw US$505 billion of illicit financial flows (IFFs) between 2004 and 2013.

The figure of US$505 billion was estimated by the non-profit IFF-focused advocacy organisation, Global Financial Integrity (GFI), in its report, Illicit Financial Flows from Developing Countries 2004-2013 (Trade-based Financial Crimes, 30 December 2015).

Verification needed

“The SIT obtained detailed calculations of illicit financial flows for each of these years from GFI. Thereafter, the details have been sent to DRI…[and it] has been asked to verify the extent to which the calculations are correct,” according to a statement issued by India’s finance ministry.

“The SIT has also observed that since reports like those of GFI which calculate illicit financial flows from various countries are widely used in academic circles and inform the debate on this issue, it is very crucial to ascertain the veracity of such reports. Further necessary action shall be taken by SIT after receipt of the report from DRI,” the statement added.

Calls for action

The SIT has repeatedly pointed to trade-based money laundering as a major route for IFFs and recommended institutional mechanisms for examining mismatches between export and import data with India’s trading partners.

It has also called for an international system to check prices of commodities traded globally.

The full GFI report, executive summary and report data for Illicit Financial Flows from Developing Countries: 2004-2013 can be downloaded from this page, here

Categories: Trade Based Financial crimes News