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New Delhi, Feb 13 (IANS) Indians are the largest depositors in Swiss banks and have stashed away $500 billion in black money in overseas tax havens, but the government is finding it "difficult" to recover the ill-gotten wealth as other nations are not cooperating, officials said Monday.

Disclosing the estimated amount of Indian black money in foreign banks, Central Bureau of Investigation (CBI) Director A.P. Singh said India suffered from the flow of illegal funds to tax havens like Mauritius, Switzerland, Lichtenstein and British Virgin Islands.

"It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad," he said at the opening of a six-day training programme for Interpol officers.

Minister of State for Personnel V. Narayanasamy, who inaugurated the CBI training programme, said the recovery of black money needed cooperation from other nations.

"Political will in other countries is not very encouraging. They say we are bound by laws," the minister said.

"We are finding it difficult to bring back black money stashed away in foreign banks."

The Indian government has drawn bitter criticism from opposition parties and activists and faced heat in the Supreme Court for its alleged failure to get back the ill-gotten wealth.

A study by the Global Financial Integrity last year estimated that $462 billion of Indian black money was parked in overseas tax havens.

The CBI chief agreed with the minister's view and said "inadequate international cooperation and bank secrecy laws" had made it difficult to trace and get back the stashed away "stolen wealth".

"Tracing, freezing, confiscation and then repatriation of stolen assets is a legal challenge," A.P. Singh said.

He said obstacles included "legal process filled with delays and uncertainty, language barriers and a lack of trust when working with other countries".

The CBI chief expressed surprise that offshore tax havens were those countries which were "said to be least corrupt as per the Transparency International index".

"Fiftythree percent of the countries said to be least corrupt are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand, which is ranked the least corrupt country, Singapore is ranked number 5 and Switzerland number 7."

The minister warned that tackling black money had assumed significance because terror outfits were repeatedly using innovative electronic ways to deposit wealth in tax havens "for siphoning off funds for terrorism related activities".

The CBI director cited World Bank estimates and said the cross-border flow of money from criminal activities and tax evasion was around $1.5 trillion, of which $40 billion is bribe paid to government servants in developing countries.

He said only $5 billion of this money had been repatriated in the last 15 years.

The six-day training exercise, a first by the CBI, is being attended by 30 Interpol officers from countries like Afghanistan, Sri Lanka, Britain, China, Malaysia, the Philippines and Indonesia. This is part of Interpol's initiative on anti-corruption and asset recovery.

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$500 billion black money hidden abroad: CBI

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New Delhi, Feb 13 : CBI Director Amar Pratap Singh today said Indians are the largest depositors of black money in foreign banks and about 500 billion US dollars or about Rs 24.5 lakh crore of illegal money has been stashed away by Indians in tax havens.

''India, in particular, has suffered from the flow of illegal funds to tax haven countries such as Switzerland, Lichtenstein, British Virgin islands, Mauritius and others,'' he said speaking at the inauguration of first Interpol global programme on anti-corruption and asset recovery.

Mr Singh said the largest depositors in Swiss Banks were reportedely also Indians.

Highlighting the complex issue of jurisdiction in asset recovery, he said criminals use this very aspect to their advantage, often spreading the crime over two or more countries.

''The global financial market allows money to travel further and faster than ever before. Lack of political will in tax haven countries to part with information also adds to the challenge to trace ill-gotten assets,'' he added.

The CBI Director said getting information about such illegal transactions is a time consuming process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.

He said tracing, freezing, confiscation and repatriation of stolen assets is a legal challenge, a complex process which requires expertise and political will.

''Managing the asset recovery investigation is complex, time consuming and costly process. Most important it requires expertise and political will. There are many obstacles to asset recovery. Not only it is a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries,'' Mr Singh said.

He added that in some of the recent high-profile cases of corruption such as 2G spectrum scam and 2010 Commonwealth Games scam, the CBI found that money was taken to Dubai, Singapore and Mauritius from where it goes to Switzerland and other such tax havens.

Mr Singh further said systems and procedures which are opaque, complicated, centralised and discretionary are a fertile breeding ground for corruption.

He called for innovative solutions to tackle corruption as it is a complex socio-economic and cultural phenomenon.

''The support of the global community through Interpol and other multilateral organisations is essential in tackling corruption and asset recovery,'' he added.

He hoped that the Interpol's global programme will sensitise participating countries to mutual legal assistance in trans border investigations. (UNI)

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500 billion US dollar stashed in tax havens by Indians : CBI

Published on Feb 13, 2012

NEW DELHI (AFP) - Rich Indians have stashed away almost US$500 billion (S$627 billion) of illicit money in tax havens abroad, the country's top police agency said on Monday.

'It is estimated that around US$500 billion of illegal money belonging to Indians is deposited in tax havens abroad,' A. P. Singh, director of the Central Bureau of Investigation (CBI), told an Interpol conference in New Delhi.

Mr Singh said the countries rated as being the least corrupt by Transparency International, a global anti-graft watchdog, turned out to be the ones where 'most of the corrupt money goes'.

'The tax havens include New Zealand which is ranked as the least corrupt country and Switzerland number seven,' he said, according to the Press Trust of India.

Read more:
Indians have $627b stashed in tax havens: Police

Rich Indians have stashed away almost $500 billion of illicit money abroad, parking the funds in countries considered the "least corrupt", the country's top police agency said on Monday.

The issue of so-called "black money" has been a major political headache for India's government, which has faced pressure from corruption activists and political opponents to do more to claw back money held abroad.

"It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad," A.P. Singh, director of the Central Bureau of Investigation (CBI), told an Interpol conference in New Delhi.

Singh said the countries rated as least corrupt by Transparency International, a global anti-graft watchdog, turned out to be the ones where "most of the corrupt money goes".

"The tax havens include New Zealand, which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven," he said, according to the Press Trust of India.

The CBI chief said that international agreements and other legal hurdles prevented the Indian government from exposing the identity of the tax evaders and bringing the wealth back to the country.

"There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries," Singh said.

Heaping further embarrassment on the beleaguered Congress-led government, India's Supreme Court last year accused it of being reluctant to publish details about untaxed money held in overseas bank accounts.

Singh said criminals were using territorial restrictions of investigating agencies to their advantage and spreading their crime to at least two countries before investing in a third.

"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 pegs the cross-border flow of money from criminal activities and tax evasion at around $1.5 trillion, of which $40 billion is in bribes paid to government servants in developing countries, according to Singh.

ASSOCHAM, a prominent Indian trade body and think-tank, recently suggested that the government provide a window to tax evaders to disclose their assets parked abroad in exchange for amnesty.

Those making such disclosures would have to pay half the amount as taxes to the Indian government.

"The fact remains that as on date it may not be possible to get hold of these persons who have stashed money abroad that is why the scheme is an invitation to these people to come forward and pay taxes," it said in a report.

Original post:
Indians have '$500 bn stashed in tax havens'

13 February 2012 Last updated at 10:27 ET

The chief of India's federal investigation agency says Indians have illegally deposited an estimated $500bn in overseas tax havens.

Central Bureau of Investigation (CBI) director AP Singh said Indians were the largest depositors in foreign banks.

Funds were being sent to tax havens such as Mauritius, Switzerland, Lichtenstein and the British Virgin Islands among others, he said.

Analysts say this flight of capital has helped widen inequality in India.

Mr Singh was speaking at the opening on Monday of the first Interpol global programme on anti-corruption and asset recovery in the Indian capital, Delhi.

"It is estimated that around $500bn of illegal money belonging to Indians is deposited in tax havens abroad. [The] largest depositors in Swiss Banks are also reported to be Indians," The Press Trust of India (PTI) quoted him as saying.

Mr Singh said getting information about such illegal transactions was a time-consuming and expensive process as each country where money had been sent had to be approached for help with investigations.

He said there was a lack of political will in the tax havens to part with any information because they were aware of the extent to which their economies had become "geared to this flow of illegal capitals from the poorer countries", PTI reported.

In a report in November 2010 the US-based group, Global Financial Integrity, said India had lost more than $460bn between 1948, a year after Independence, and 2008 because of companies and the rich illegally funnelling their wealth overseas.

India's underground economy accounted for 50% of the country's gross domestic product, it said.

The report said the illicit outflows of money had increased after economic reforms began in 1991.

In recent months, India's Congress party-led government has been on the back foot on the issue of black money and corruption.

The Supreme Court has also chided the government for not doing enough to unearth illicit money.

Originally posted here:
Tax evasion 'cost India $500bn'