A new law, or an amendment to an existing law (such as the Prevention of Money Laundering Act), requiring all Indian citizens to disclose all their assets and bank accounts in India and abroad needs to be introduced, senior Supreme Court lawyer Prashant Bhushan has suggested to Prime Minister Narendra Modi.
“The primary reason why black money has such a stranglehold on our economy is because our system not only allows, but in fact encourages the siphoning out of illicit funds abroad, laundering those funds through tax havens, and re-investing the same in India as legitimate investment through non-transparent instruments such as participatory notes and anonymous investments through companies registered in tax havens,” Mr. Bhushan said in his letter. “This allows individuals to first transfer their black money into foreign accounts through hawala transactions, and then bring it back into the country, usually as investments in their own companies or trusts by way of participatory notes or anonymous investments by banks or other shell companies situated in tax havens. All of this is unfortunately given legal sanction by the domestic laws of our country, which run counter to several provisions of the U.N. Convention Against Corruption (UNAC).
A law, he said, should require citizens to annually disclose a full list of their assets and liabilities. Any income or assets that are not disclosed in the required form would be deemed to be ‘proceeds of crime’, and included as ‘predicate offences’ defined under the UNCAC. This would enable the law enforcement agencies to recover the assets under provisions of the Prevention of Money Laundering Act or the UNCAC.
