The Reserve Bank of India (RBI) has sent an advisory to banks cautioning them about the new trend of using forged or fake Bills of Entry to remit funds abroad, especially to tax havens such as Hong Kong. The apex bank has also started synchronising databases with the customs department to detect fraud.
The RBI move comes in the wake of the revenue department, under the finance ministry, raising alarm that it has detected more than Rs 1,000 crore sent abroad through this route over the past few months and suspect that the new modus operandi is showing an increase in the trade-based money laundering.
The revenue department in its communication with RBI had expressed concern that the fake and forged bills are getting cleared by banks.
According to finance ministry sources, Drive India Enterprise Solutions, a subsidiary of TATA group recently informed the central board of excise and customs (CBEC) that a fake high seas sales contract in the firm’s name was used to make illegal foreign remittances.
After the revenue department red-flagged the issue, the RBI has started synchronising export and import data with customs databases.
This modus operandi in the hawala trading comes at a time when the government has started putting in place mechanisms to curb the traditional export and import related money laundering activities, soon after the Supreme Court-appointed Special Investigation Team on Black Money provided specific recommendations.
According to the RBI and forex rules, wherever foreign exchange is involved, banks should ensure that the importer furnishes evidence of import through Bills of Entry, Postal Appraisal forms or Customs assessments. The RBI, in September, had informed the revenue department that “an advisory has been issued to all the authorised dealer banks to exercise due caution in handling the import documents and ascertain the authenticity/ genuineness thereof through the Customs Authorities/CBEC website.”
RBI had additionally said told CBEC through a letter, “We have also initiated the process of transmission of import data from the Directorate General of Systems, Customs and Central Excise for devising a suitable module to monitor and process the import transactions.” Till a new system is placed, RBI has asked banks to compulsorily cross check documents with customs authorities if the country of origin is a tax haven or a financial secrecy jurisdiction.