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New Documents

India’s Directorate of Enforcement announced significant actions taken in two cases relating to financial fraud and money laundering.

India’s Directorate of Enforcement announced that it obtained a Provisional Attachment Order under the Prevention of Money Laundering Act, 2002, to attach assets derived from bank fraud.

News

Enforcement Actions

The Reserve Bank of India imposed a monetary fine against the Mumbai, India-based bank for failure to adhere to its know your customer obligations.

The Reserve Bank of India penalized the Nagpur, India-based bank for failure to meet its regulatory obligations, including its know your customer duties.


Important Facts

  • The U.S. State Department labels India as a major money laundering country. India continues to face vulnerabilities, including informal financial networks, complex onshore and offshore corporate structures, and enforcement capacity constraints. Despite efforts by Prime Minister Narendra Modi to curtail illicit financial activity, the country still sees informal remittance systems used extensively to evade transaction charges and to conduct both legitimate remittances and money laundering. Transnational criminal organizations use offshore corporations and trade-based money laundering to disguise illicit funds and companies use trade-based money laundering to evade capital controls.  The most common money laundering methods include intermingling criminal proceeds with legitimate assets, purchasing bank checks with cash, routing funds through employees’ accounts, and complex legal structures. Illicit funds in India are also laundered through real estate transactions, gold purchases, charities, election campaigns, and educational programs. The illicit proceeds are most commonly derived from tax avoidance, corruption, narcotics trafficking, human trafficking, and illegal trade. The State Department report noted that India prioritizes crimes of tax evasion and counterfeit currency, while anti-money laundering and terrorist financing are lower priorities. India has comprehensive know-your-customer and suspicious transaction reporting requirements and uses enhanced due diligence for politically exposed persons. India has addressed shortcomings in the criminalization of money laundering, and in its domestic framework for confiscation and provisional measures.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 5 High :
Largely Compliant : 25 Substantial :
Partially Compliant : 15 Moderate :
Non-Compliant : 4 Low :

BASEL i

Rank : 70/141
Score : 5.15/10

TRANSPARENCY INTERNATIONAL i

Rank : 86/179
Score : 40/100

Tax Justice Network i

Rank : 47/133
Score : 48/100