SIT on black money recommends empowering ED

As the NDA government continues its efforts to recover black money stashed abroad, CNBC-TV18 learns that the Special Investigation Team (SIT) on black money has sought amendments to Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA). Justice MB Shah has written to Finance Ministry seeking amendments to both the regulations that would empower Enforcement Directorate (ED) to expedite its probe on black money.

According to sources, SIT on black money has recommended that the enforcement agency be allowed to initiate a probe without any predicate offences under PMLA. Predicate offences are investigated by agencies such as Police, Customs, Sebi, CBI etc. Currently, Enforcement Directorate can initiate probe only after other agencies have registered or referred the cases to them.

It is learnt that SIT on black money has also recommended that certain provisions under FEMA be amended that would make the offences criminal. Under existing provisions under section 5 & 6 of FEMA, are civil offenses and the enforcement agency can only levy monetary penalties. Criminal offenses would mean the Enforcement Directorate will be able to seek information from countries that are signatories to Mutual Legal Assistance Treaty (MLAT).

At present, about 54 countries are signatories to MLAT. Amendments to these provisions under FEMA will ensure speedy information sharing between India and the country where black money is suspected to be stashed.