India to introduce electronic checks on L/Cs and remittances to curb TBML

The Indian government is tightening up on trade-based money laundering (TBML) by creating a system to electronically compare the value of remittances made abroad under letter of credit (L/C) transactions with the value of imported goods received.

The electronic system will correlate or identify discrepancies in data held by the Reserve Bank of India (RBI), banks and customs authorities.

Simplified processThe move comes after the Directorate of Intelligence’s discovery of major TBML cases, one very substantial one involving traders submitting the same documents in multiple banks to transfer funds abroad against imports.

The new process should simplify import requirements. For example, the RBI will no longer require banks to obtain a physical copy of the bill of entry from the importer as evidence of a genuine import.

This is because customs or special economic zones can securely send the bill of entry data electronically to banks.

Direct comparison

Bill of entry data can then be compared directly with import payments data from banks.

The aim is that transactions where an amount has been remitted abroad and there is no corresponding evidence of an import for a matching amount can be easily identified.



Categories: Trade Based Financial crimes News

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