To check large-scale foreign exchange violations and generation of slush funds, a Special Investigation Team (SIT) on black money has asked RBI and Enforcement Directorate (ED) to jointly take on cases of huge exports outstanding.
The SIT, for the first time, has authorised the ED to obtain regular information on export outstanding amount of more than Rs. 100 crore, a data till now shared only by the banking regulator with investigative and enforcement agencies like DRI and Customs.
Under the current protocols, every exporter, be it an individual or business firm, has to file an export outstanding (XOS) statement to RBI within nine months after it ships goods or products to a foreign destination which is extendable by another six months.
If a person or business house does not file the XOS it means either that entity has been duped of its income or the case qualifies to be one of forex violations or hawala dealings as the money got has not been recorded for.
Sources said the SIT found that a number of such instances are being reported and hence it has asked RBI to begin providing the ED dossiers on such defaults as it is the lead agency to check forex contraventions and the hawala route of illegal payments.
“To begin with, the ED, twice in a year, will be provided the XOS data by RBI. This is a step initiated to check hawala funds and black money generated thereof,” a source privy to the development said.
The ED regulates forex related crimes under the Foreign Exchange Management Act (FEMA).
“In a number of instances it was detected that FEMA violations also lead to cases of money laundering, income tax evasion and under-reporting of customs declarations. The SIT decided on the new protocol to check on these incidents,” the source said.
The ED, after receiving information on the defaulters, would issue showcause notices and take up cases under the FEMA.
The sources said the new measure is aimed at streamlining flow of information on black money cases between all the agencies who deal with instances of hawala through exports frauds.
Hawala is a process under which the legal banking channels are skirted to conceal ill-gotten monies.
The SIT on black money has been tasked to suggest ways and procedures to not only curb on instances of illegal generation of wealth but also to prepare robust mechanisms to penalise and adjudicate on such cases which have already occurred.
The first report on steps taken by the SIT in this regard was submitted to the Supreme Court last month.
SIT is headed by Justice (retd) M B Shah with 11 other investigative and enforcement agencies part of this high-level panel.