Plot thickens: Switzerland finds 'organised crime' link in India money laundering trail

Bern/New Delhi: As Indian government steps up pressure on Switzerland to share information about alleged black money flow, a Swiss government agency has disclosed having come across suspicious money laundering activities related to cases of “organised crime” in India.

The disclosure has been made by the Money Laundering Reporting Office Switzerland (MROS), which is part of the Swiss Federal Office of Police. MROS functions as a relay and filtration point between financial intermediaries and the law enforcement agencies.

Under the Swiss Money Laundering Act, MROS receives and analyses Suspicious Activity Reports (SARs) in connection with money laundering and, if necessary, forwards them to the law enforcement agencies.

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As per MROS’ latest update on developments in the fight against money laundering, organised crime and terrorist financing in Switzerland, as many as 1,411 SARs were received by this central agency during 2013, involving suspicious assets worth a record high amount of nearly 3 billion Swiss francs (over Rs 20,000 crore).

While MROS did not disclose the specific number of India-related cases, it said the number of SARs involving ‘organised crime’ increased to 104 during 2013 – from 97 in the previous year.

In terms of the size of assets involved in these cases, criminal gangs from Italy were on the top, the MROS said, while adding that “further cases of organised crime involved occurrences in China, Brazil and India”.

Switzerland’s central money laundering prevention agency, however, did not divulge any specifics about the cases of organised crime in India. Detailed queries sent to MROS head Stiliano Ordolli remained unanswered in this regard.

MROS data further showed the number of SARs involving terrorist financing has also increased more than two-fold – from 15 in 2012 to 33 in 2013.

During 2013, MROS received inquiries from foreign Financial Intelligence Units (FIUs) involving a record high number of 3,061 foreign nationals or entities, with Argentina and USA topping the list with 512 and 321 cases respectively.

Surprisingly, India does not figure on this list of inquiries from foreign FIUs, while other countries included Liechtenstein (279), France (137), Germany (115), UK (104), Spain (96) and Luxembourg (89).

Further, the MROS data does not figure any inquiry related to Indians for over a decade now. The last time the MROS disclosed having received a foreign inquiry about Indians was in the year 2002.

During 2002 and also in 2001, India was among the “countries which made inquiries about only a small number of individuals or companies”.

Prior to that, MROS had received four suspicious activity reports in the year 2000 with Indians as beneficial owners, while the number of such cases in the previous year (1999) stood at three. There were no cases involving Indians in 1998.

MROS further said it replied to 660 inquiries from 93 countries during 2013, but it was unable to answer 30 foreign FIU inquiries on “formal grounds”.

It further said MROS responded to FIU inquiries during 2013 within an average of seven working days following receipt, while the foreign FIUs took an average of 25 working days to reply to Swiss requests.

Earlier in 2012, MROS had taken an average of 6 working days to reply to inquiries from abroad, while the equivalent time period for foreign FIUs stood at 24 working days.

Following a revision of the Anti-Money Laundering Act (AMLA), MROS has also been authorised to exchange financial information with foreign FIUs, while it also has got powers to collect information from financial intermediaries mentioned in a SAR submitted by another financial intermediary.

Besides, the revised Act also authorises MROS to conclude technical co-operation agreements with foreign FIUs. MROS is a member of the Egmont Group, which is an international association of FIUs from across the world, including India.

The objective of this group is to foster a prompt and legally admissible exchange of information in order to combat money laundering and terrorist financing.

PTI