SIT on Black Money Submits Report

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Chairman of Special Investigation Team (SIT) on Black Money, appointed by Supreme Court, has impressed upon the imperative need to establish the following institutional mechanism for sharing of data with the RBI in its various data bases with the Enforcement Authorities so that the data could be cross checked with other information available with Enforcement Authorities and illicit financial flows could be curbed :

(a) Foreign Exchange Transactions Electronic Reporting System (FET–ERS):–

FET–ERS was introduced through RBI Circular No.77 dated 13.03.2004. All authorized dealers are obligated to report each foreign exchange transactions (inward and outward remittances in FET–ERS). Access to this database would needs to be given to authorities like Enforcement Directorate and Directorate of Revenue Intelligence, so that the above analysis could be done;

For this, SIT has suggested that FET–ERS data should capture the PAN number of the importer or the exporter and that RBI take necessary steps for the same to get this done on an urgent basis.

(b) Export Outstanding Data:–

In the data provided by RBI to the SIT, huge amounts were found outstanding beyond a period of one year in violation of FEMA. The SIT had noted that the possibility of the concerned Companies having wrongly claimed duty drawback also cannot be ruled out. Further, the possibility of the concerned Companies having availed of various export promotion schemes also cannot be ruled out.

In light of this, the SIT has asked the Enforcement Directorate, Directorate of Revenue Intelligence and Ministry of Commerce to analyze the data of export outstanding and take necessary action in this regard.

RBI maintains export realization data in its EDPMS database. Chairman, SIT in his letter has observed that it is important to co–relate shipping bills with confirmation from banks on the EDPMS database itself rather than Bank Realization Certificate (BRC) which is different database and that RBI may impress upon the banks to inform regarding realization of export proceeds on the EDPMS itself.

(c) Monitoring of Advance Remittances against Imports:–

In wake of the Bank of Baroda scam, the SIT had asked RBI to institutionalize a mechanism for cross checking of advance remittances against Bill of Entry irrespective of value of advance remittances sent. RBI had informed the SIT that huge advance remittances running into billions of dollars were outstanding as on 30th September, 2015 for which Bill of Entry correlation has not been done.

SIT had thereafter asked RBI to get this co–relation completed and inform. Chairman, SIT in his letter has asked RBI to complete this exercise at the earliest and send information to SIT. Chairman, SIT in his letter expressed satisfaction that IDPMS (Import Data Processing and Monitoring System) is being set up by RBI which is expected to be launched by the end of September which will enable cross checking of each advance remittance irrespective of value against the Bill of Entry.

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