During the last three years, increased focus on black money stashed in Swiss banks and other tax havens like Virginia Islands, Mauritius and Indonesia has resulted in shifting of black money, tainted money or ill-gotten money and drug money to other destinations, including the Gulf countries, according to K. Raamamoorthy, former Chairman, Adjudicating Authority, Prevention of Money Laundering.
The former Additional Chief Secretary of Kerala, who was on a visit to Madurai, said this drive against black and other kinds of illegal money resulted in a situation where the amount available in the chests of Swiss banks dwindled. Moreover, the Swiss banks stuck to their earlier stand that unless criminality was proved or a criminal case was filed against those who had deposited black money they would not be able to share information of the account holders and the amount stashed by them.
“It is posing a problem for the present government, even though it is quite serious in its efforts at unearthing black money. India is not able to flex its muscle like the United States of America,” he said. “In our country, black money or ill-gotten money is stealthily ploughed in to fund drug cartels, terrorist outfits, realtors and smugglers.”
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Expressing concern over the spread of drug addiction among the youth in Punjab, Haryana and Delhi, which proportionately increased the circulation of drug money or tainted money, Mr. Raamamoorthy recalled that in one case an expert from Mexico was brought to Haryana to set up a laboratory to produce synthetic drugs, which were sold in the northern and western States and in Canada. The money generated from the drug business returned to India through money changers.
Pointing to the booming realty sector, he said, “In the globalised economy, this sector has received so much money through hawala channels. In some cases, projects got delayed whenever there was delay in receipt of hawala money.”
The all-pervasive tainted money also funded terrorist activities, especially in the North-east where the “system is so flexible that it is easy to extract money from moneyed people at gunpoint.” The money transfer companies also served as conduits to tainted money for funding terrorist activities in Kashmir and the North-east. There should be perfect coordination between the local police and the Enforcement Directorate to punish money launderers, he said.
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