Lok Sabha Question No. 555 (UNSTARRED), answered on 2016-11-18
Subject: Money Laundering and Tax Havens
Ministry: FINANCE
Asked by: PRATAPRAO GANPATRAO JADHAV, HARISHCHANDRA DEORAM CHAVAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO.555

## TO BE ANSWERED ON FRIDAY, THE NOVEMBER, 2016 KARTIKA 27, 1938 (SAKA) 18th

## 555. SHRI PRATAPRAO JADHAV: SHRI HARISHCHANDRA CHAVAN:

Will the Minister of FINANCE be pleased to state:

- (a) the details of the acts in force for money laundering and curbing tax havens along with the cases unearthed violating the provisions of the said acts during the last three and the current year; years
- (c) the corrective steps taken by the Government to check such practises?
- (b) the total amount of money involved in such cases and the number ofpeople found guilty along with the action taken against the offenders; and

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

- (a) The prevention of Money-laundering Act; 2002 (PMLA) and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act; 2015 are in force to curb money laundering and to specifically deal with  black money   stashed  abroad respectively. Number of cases registered by Enforcement Directorate under PMLA during the last three years and the current year are as under:
- (b) As on 31,10.2016, 658 Provisional Attachment Orders have been issued by attaching   properties worth Rs.18886 Crores    (Approx): Further, 283 Prosecution Complaints have been filed for the offence of Money Laundering:
- (c) Besides, effectively enforcing aforesaid Act as mentioned in (a) , the Government has taken several effective steps, both by way of policy level initiatives a8 well as through more effective enforcement action on the ground, the menace of money laundering and curbing tax havens in the country. These steps inter-alia include following:
- (\_) In a historical move that will add record strength in the fight against corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes, the Government of India has decided the five hundred and one thousand rupee notes will no longer be legal tender from midnight; 8th November; 2016.
- (i) Constitution of the Special Investigation Team (SIT) on Black Money under the Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme Court.
- (iii) Vide the Finance Act; 2015, Section 132 of the Customs Act; 1962, which deals with offence relating to false declaration/documents in the transaction of any business relating to Customs has been made predicate offence under Prevention of Money-laundering Act; 2002 to curb trade based money laundering: Further, vide the Finance Act; 2015, the definition of 'proceeds of crime' under PMLA has been amended. Under the revised definition 'proceeds of crime' would also include "where such property is taken or held outside the country; then the property equivalent in value held within the country" . This provision will enable action in those cases where 'proceeds of crime' is taken or heid outside the country and enable action to be taken for attachment of equivalent asset located in the country:
- (iv) The offence of wilful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money (Undisclosed Foreign Income and Assets) and imposition of Tax Act; 2015 has been made a scheduled offence under PMLA
- (v) Insurance Broker and Registrar or Sub-registrar have been notified under PMLA as person carrying on designated business or profession thereby including them under PMLA reporting regime.
- (vi) The Foreign Exchange Management Act; 1999 (FEMA) has also been amended vide Finance Act; 2015 to the effect that if any foreign exchange, foreign security of any immovable property situated outside India is held in contravention of the provisions of this Act; then action may be taken for seizure and eventual confiscation of assets of equivalent value situated in India: These contraventions are also being made liable for of penalty and prosecution with punishment of imprisonment up to five years. levy
- (vii) The legal regime has been strengthened by amendments in the section 15 of the the damage to the monetary stability of India by way of production or smuggling or circulation of High Quality Fake Indian Paper currency, coin or any other material has been declared as a "terrorist act".
- (viii) Benami Transactions (Prohibition) Amendment Act, 2016 has been notifiedon 10.08.2016 to amend the Benami Transaction (Prohibition) Act; 1988 with & view to, interalia, enable confiscation of Benami property and provide for prosecution

| Serial No   | Financial Year               |   Number of Cases |
|-------------|------------------------------|-------------------|
| 1           | 2013-14                      |               137 |
| 2.          |                              |               214 |
| 3           | 2015-16                      |               111 |
|             | 2016-17 (upto October; 2016) |                89 |