Government tightens routes for trade based money laundering

Source: The Economic Times, Dec 02, 2016

NEW DELHI: The government has tightened an oft-used route for trade-based money laundering.a Issuance of remittances or opening of letter of credit in trade will now be done electronically involving the Reserve Bank of India, banks and customs authorities.

The move comes after the Directorate of Intelligence detected a major laundering case in which traders submitted same documents in multiple banks to transfer funds abroad against imports.

The new process will make it easier for exporters and importers to do business. As part of the plan, the RBI has decided to do away with the requirement for the banks to obtain a physical copy of the bill of entry from the importer as an evidence of import, because this data can be transferred in a secured manner from the system of the customs department.

It has been, therefore, decided to discontinue the printing of bill of entry copy, a Central Board of Excise and Customs directive to field formations. Bill of entry is the document that gives details of the actual shipment for importing a consignment.

Under this new system, physical transfer (bill of entry) of data from customs or special economic zones will be collated with import payments data from banks.

Accordingly, transactions where the amount has been remitted abroad but import for matching amount has not been evidenced, can be easily identified and monitored, the government said.


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