The Special Investigation Team Chairman, Justice (retired) M.B. Shah, in a letter dated August 11 to Reserve Bank of India (RBI) Governor Raghuram Rajan has impressed upon the imperative need to establish the following institutional mechanism for sharing of data with the enforcement authorities to curb illicit financial flows, finance ministry said in a statement.
"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," he said, as per the statement.
Presently, RBI holds the information with respect to all types of foreign exchange transactions.
The SIT on black money, appointed by the Supreme Court, is of the view that there should be effective sharing of information between various government departments, particularly of enforcing agencies, it said.
The data can be shared only by having one agency such as Central Economic Intelligence Bureau (CEIB) or any other agency, as a data warehouse, it added.
"From the said data warehouse, various agencies can gather the relevant information for taking early appropriate action. This is so since the data available with one agency can be relevant to action expected to be taken by other law enforcement agency," according to the statement.
The SIT said that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies like Enforcement Directorate, Directorate of Revenue Intelligence and Central Board of Direct Taxes (CBDT) is of critical importance.
SIT has suggested that Foreign Exchange Transactions Electronic Reporting System (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.
In the data provided by RBI to the SIT, huge amounts were found outstanding beyond a period of one year in violation of the Foreign Exchange Management Act (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 companies concerned having availed of various export promotion schemes also cannot be ruled out.
"SIT in the letter expressed satisfaction that Import Data Processing and Monitoring System (IDPMS) 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," it said.
