Getting information about such illegal transactions is a time taking process and judicial requests are to be made to the country where such deposits have been made.
Mr A P Singh, the Director, CBI speaking at the inauguration of first Interpol global programme on anti-corruption and asset recovery said that Indians are the largest depositors in banks abroad with an estimated $500 billion (nearly Rs 24.5 lakh crore) of illegal money stashed by them in tax havens .
The largest depositors in Swiss Banks are also reported to be Indians, CBI Director further said that getting information about such illegal transactions is a time taking process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.
“Fifty three per cent of the countries said to be least corrupt by the Transparency International Index. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven,” he said.
Mr Singh said tracing, freezing, confiscation and repatriation of stolen assets is a legal challenge, a complex process which requires expertise and political will. Not only it is a specialized legal process with delays and uncertainty, but there is also a lack of trust when working with other countries,” Mr. Singh said.
He said global financial markets allow money to travel faster and further making tracking the money trail is even more difficult . The criminals are using the territorial issues of investigating agencies to their advantage by spreading their crimes.
“In some of the recent important cases being investigated by the CBI such as 2G, CWG and Madhu Koda, we find that money is taken to Dubai/Singapore/Mauritius from where it goes to Switzerland and other such tax havens.
“For criminals all it involves is setting up of a few shell companies and then making layered transfers from account to another in a matter of hours as there are no boundaries in banking transactions,” he said.
The World Bank estimates the cross border flow of money from criminal activities and tax evasion is around 1.5 trillion US dollars of which 40 billion is bribe paid to government servants in developing countries.