Advocating inclusion of offences committed under various other statutes under the ambit of the Prevention of Money Laundering Act (PMLA), the Special Investigation Team on black money has suggested institution of a statutory mechanism empowering the Enforcement Directorate to initiate proceedings suo motu.
Under PMLA, the ED is presently authorised to probe money laundering, prosecute the accused and attach proceeds of only those crimes that are listed in the statute’s schedule. A total of 156 such offences under 28 statutes are right now listed as scheduled offences in the Act.
The SIT proposes that statutes like the Mines Act, the Mines and Mineral Development Act as also the offences under the Income-Tax Act, the Customs Act and other direct and indirect tax laws also need to be included to expand the ambit of money laundering investigations.
In this regard, the ED, the Central Board of Direct Taxes and the Central Board of Excise and Customs have been told to submit their recommendations.
Apart from recommending appropriate amendments in the Foreign Exchange Management Act, the SIT has also concluded that amendments in the Double Taxation Avoidance Agreements (DTAA) with the other countries are a must to ensure that the information obtained from them under these treaties can be shared with investigating agencies, particularly with the ED, without any legal hurdle.
India has comprehensive DTAAs (which cover most types of incomes), Limited DTAAs, Limited Multilateral Agreements and Tax Information Exchange Agreements with over 110 countries.
While SIT has been instituted for a probe into unaccounted money stashed abroad, the body has found that in the context of financing of heinous offences, domestic black money is also required to be treated more seriously than as a mere case of civil dispute. Dilution of offences under foreign exchange regulations to that of a civil nature would trivialise the issue.
For a coordinated action against black money, the SIT has also recommended development of integrated software for seamless information exchange between the probing agencies.
