FATF cites ED'€™s asset recovery efforts in money laundering cases

New Delhi, Nov 5 (PTI) Global terror financing watchdog Financial Action Task Force (FATF), in its report on global best practices, extensively mentioned cases where India's Enforcement Directorate (ED) has efficiently dealt with money laundering cases and recovered assets from economic offenders.

The FATF report on 'Asset Recovery Guidance Best Practices' provides an updated framework for strengthening global systems of asset recovery against financial crimes and cites case studies on how enforcement agencies cracked down on fraudulent activities concerning investment, property, banking and offshore money laundering.

The FATF guidance cites several examples from India, illustrating good practices in tracing and recovery of assets. One example highlights the case of Agri Gold, where coordinated action between the ED and Andhra Pradesh State Crime Investigation Department resulted in the attachment and restoration of assets worth Rs 6,000 crore (USD 690 million) to victims of an investment fraud.

Another case related to the IREO group notes the attachment of immovable properties worth RS 1,777 crore (USD 204 million), equivalent to proceeds of crime transferred outside India, under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA), demonstrating India's use of value-based confiscation.

The guidance also references India's Fugitive Economic Offenders Act, 2018, as a notable illustration of the doctrine of fugitive disentitlement, which enables confiscation of property belonging to offenders evading judicial processes.

Under the section on expeditious measures, the guidance presents the case of the BitConnect Ponzi Scheme, where, based on intelligence regarding web wallets and digital devices containing cryptocurrencies, ED took swift action by seizing cryptocurrencies worth approximately Rs 1,646 crore (USD 190 million) during search and seizure operations.

The seized virtual assets were secured in a cold wallet held by the Directorate, and additional movable and immovable properties worth Rs 4.89 crore (USD 56 million) were attached in connection with the scam.

As an example of international cooperation, the guidance highlighted the case of Banmeet Singh & Others, where India received a mutual legal assistance request from the US in relation to two Indian individuals under investigation for drug trafficking and money laundering.

Acting on this request, ED conducted search operations, seizing 268.22 bitcoins valued at approximately Rs 130 crore (USD 29 million) and attaching immovable properties worth USD 1.1 million. A prosecution complaint was subsequently filed for the confiscation of the seized and attached assets.

The guidance also includes examples under restitution and victim compensation. In one instance, the case of the Rose Valley Scheme is highlighted, where they raised public funds through secured debentures and diverted the money into shell companies.

ED provisionally attached assets and coordinated with the Asset Disposal Committee constituted by the High Court to manage restitution. The court authorised the release of attached properties worth Rs 538 crore (USD 62.8 million) to reimburse more than 75,000 investors. Victims were able to submit claims directly through an official website established by the committee, avoiding legal expenses.

The guidance also references Indian practices related to coordination among law enforcement, financial intelligence, and tax authorities, the use of corresponding value attachment, and the application of technology and financial data analytics in asset-tracing and interim management.

India's legislative framework under the PMLA and the Fugitive Economic Offenders Act is cited as a comprehensive structure supporting effective asset recovery and management.

Paris-based FATF is a 40-member body that sets international standards to ensure that nations can effectively go after illicit funds linked to drug trafficking, illicit arms trade, cyber fraud and other serious crimes. PTI JD BAL BAL