Financial Intelligence Unit- India: An overview

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Financial Intelligence Unit- India: An overview

Introduction:

  1. Financial Intelligence Unit – India (FIU) is the central, national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs.
  1. FIU was set by the Government of India vide O.M. dated 18th November 2004. FIU is a member of the Egmont Group, an international network of financial intelligence units that work together to combat money laundering and terrorist financing.
  1. FIU is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and related crimes.
  1. FIU is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.

The functions of FIU are:

  1. Collection of Information: Act as the central reception point for receiving Cash Transaction reports (CTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on Purchase or Sale of Immovable Property (IPRs) and Suspicious Transaction Reports (STRs) from various reporting entities.
  1. Analysis of Information: Analyze received information to uncover patterns of transactions suggesting suspicion of money laundering and related crimes.
  1. Sharing of Information: Sharing information with national intelligence/law enforcement agencies, national regulatory authorities and foreign Financial Intelligence Units.
  1. Act as Central Repository: Establish and maintain national data base on cash transactions and suspicious transactions on the basis of reports received from reporting entities.
  1. Coordination: Coordinate and strengthen collection and sharing of financial intelligence through an effective national, regional and global network to combat money laundering and related crimes.

Constitution of FIU

  1. The FIU – IND is a multidisciplinary body with a sanctioned strength of 74 members from various government departments.
  1. The members are inducted from organizations including Central Board of Direct Taxes (CBDT), Central Board of Indirect Tax and Customs (CBIC), Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Department of Legal Affairs and Intelligence agencies.

An example of information collection by FIU:

As per the guidelines issued by the Reserve Bank of India (RBI), financial institutions are required to file Non Profit Organisation Transaction Report (NTR) for transactions exceeding Rs. 10 lakh (or its equivalent in foreign currency) in a single day for Non Profit Organisations. The purpose of NTRs is to help FIU-IND detect and prevent money laundering, terrorism financing, and other illegal activities that may be carried out through NPOs.

 

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