Get serious

Updated: Mar 22 2006, 05:30am hrs
Finance minister P Chidambarams presence at a relatively nondescript function like the opening of the head office of the Financial Intelligence Unit-India (FIU-Ind) is an indication of how serious the government is about tackling money laundering. To some extent, it makes up for the fact that it took more than a year for the government to find a proper office for this critical organisation. The FIU-India reports to the Economic Intelligence Council, an entity headed by the finance minister. It was established in November 2004 as the central nodal agency for receiving, processing, analysing and disseminating information relating to suspect financial transactions and coordinating with other national and international agencies involved in curbing money laundering.

Hopefully, the ministry will accord due importance to the unit and arm it with sufficient wherewithal to discharge the onerous duty cast on it by the Prevention of Money Laundering Act (PMLA), 2002. It will need to interact with international agencies like the Financial Action Task Force, the Egmont Group and the Asia/Pacific Group on Money Laundering and help regulatory and enforcement bodies unmask the faces behind money laundering and other crimes. The FIU-Inds present strength of 43 is not impressive, considering the amount of work the unit will have to perform and the responsibilities it is expected to shoulder. The ministry must think of involving more experts and professionals, even from the private sector, in this endeavour of fighting powerful syndicates and organised crime. It may be worthwhile for the unit to associate chartered accountants and lawyers to sift the information that will constantly come from banks and financial institutions and help the relevant agencies prepare foolproof criminal cases against persons involved in anti-national activities.

Money laundering is a serious issue. Given its links with terrorism and drug trafficking, in particular, it has implications beyond mere tax evasion. With computerisation on in a big way in IT offices, tax administration will improve. Add developments like the shift to value-added tax and the authorities will be much more able to tackle the menace. Fortunately.