ED receives maximum tips on money laundering from media and social sites: FATF
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Open source information such as media reports, social media comments, tip-offs and complaints form the bulk of the information that leads the ED to identify potential money laundering cases, the FATF said on Thursday in its latest mutual evaluation report for India.
The Financial Action Task Force (FATF), which spearheads the fight against money laundering and terrorist financing, also praised India’s systems and regime put in place for this fight and asked the country to make “major improvements” to strengthen prosecution in such cases.
“The largest number of money laundering investigations are identified by the ED (Enforcement Directorate) through public sources, the general public, media reports and information from social networks. The information is then verified through the CCTNS (crime and criminal tracking network and systems) database and money laundering reports from LEAs (law enforcement agencies),” the report said.
According to the FATF, the ED uses “seven avenues” to identify potential money laundering cases. These cases are driven by open source platforms, followed by referrals from LEAs. The ED identifies cases through an IT system that monitors underlying cases (the CCTNS), the ED Director’s orders, referrals from ongoing cases, Financial Intelligence Unit (FIU) distributions and international cooperation.
“A significant portion of ML (money laundering) investigations are also based on direct referrals from ED nodal officers. Every LEA, both at the central and state level, has appointed one of its own staff as a nodal officer for the ED.
“The focal point officer is normally a senior civil servant, with a team of supporting officials who deal with the day-to-day operations within the relevant LEA, monitoring day-to-day operations and entering data into the case management system (CCTNS),” the report said.
Data was also provided in this regard showing that open source platforms led to the identification of 84 cases of money laundering in 2018-2019, 249 in 2019-2020, 447 in 2020-2021, 548 in 2021-2022 and 605 in 2022-October 2023.
The second best way for the ED to get information about possible ML cases was through referrals from LEAs. In 2018-2019, this was 78 cases, in 2019-2020 227, in 2020-2021 375, in 2021-2022 448, and in 2022-October 2023 396.
The other sources had lower numbers than these two inputs.
A team of FATF experts drawn from agencies in Russia, the UAE, the US, Brazil, the UK, South Africa and Japan conducted the on-site assessment while in India between November 6 and 24, 2023. The report for India was reviewed by experts from Portugal, New Zealand and Tajikistan, the FATF said.
The report also noted ED’s manpower.
“Resources (for the ED) have steadily increased by approximately 50 percent since 2018. Nevertheless, based on the National Action Plan, resources for the ED are expected to triple again over the next five years.
“Given the size and risks of the country and the expected volume and complexity of money laundering investigations and prosecutions, there is a need for increased resources for the Emergency Department,” the report said.
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First publication: Sep 19, 2024 | 10:20 PM IST