NEW DELHI, Oct 24: In July 1994, the Directorate of Revenue Intelligence (DRI) received a tip-off from Hong Kong that Rs 270 crore of forex was remitted from the Nariman Point office of the South Indian Bank against fake import documents. Since this was essentially a money-laundering operation, the DRI soon gave up the investigation - its jurisdiction is limited to customs frauds. It referred the case to the Central Bureau of Investigation (CBI) and the Directorate of Enforcement (DoE), but neither responded.In mid-1995, the Economic Intelligence Council (EIC) - the apex co-ordinating body of economic intelligence agencies - stepped in and directed DoE to probe the case. Within nine months, the DoE detected similar frauds amounting to over Rs 500 crore in other banks.Precisely the kind of co-ordination and information sharing that you'd suppose would be in the best interests of economic intelligence in the country? Well, apparently, the agencies don't seem to think so. While this is why the then revenue secretary M R Sivaraman decided to set up an information bank in February 1996, economic intelligence agencies are refusing to co-operate.Under the plan, the five economic enforcement agencies - the Directorate General of Anti-Evasion (DGAE), DoE, Narcotics Control Bureau (NCB), Income Tax (investigation wing) and DRI - were to supply information on economic frauds, offenders and the modus operandi. Initially, the Central Economic Intelligence Bureau (CEIB) was to collate information on nearly 10,000 frauds - both ongoing and old cases under Foreign Exchange Regulations Act (FERA), Customs Act, NDPS and Income Tax Act - detected by these agencies since 1991-92.Of this, data on nearly half the cases was to be supplied by 1997-end. While the enforcement agencies were told to start sending information after the National Informatics Centre provided the software package for the bank last November, CEIB has so far received investigation reports for just about 300 cases - most of these relate to old cases of currency seizures and mis-declaration. In fact, repeated reminders from the bureau have proved futile. Say CEIB officials: ``The way they are going, it will take us a few decades to set-up the data bank,''Worse, none of the agencies are complying with the CEIB's instructions on current cases - they are supposed to send detailed information about the offence, offender, seizure and action taken/required in two formats - within 48 hours of the search/registering a case; and within 48 hours of charge-sheet/assessment report.``The idea was to see if the investigating agency required any help from other enforcement arms of the government,'' CEIB sources added. For instance, if the customs body is investigating any firm for under-invoicing of imports (which normally involves FERA violations), it can only charge the offender under the Customs Act. To fund the difference in the import price, however, money will have to be sent from India through hawala channels - the supplier, after all, has to be paid the full price. These funds would have to come from unaccounted sources. In other words, the income tax department should automatically be involved in such cases.The delay in the setting-up the information bank is expected to affect the functioning of the revamped EIC, which is now headed by Finance Minister P Chidamabaram.Miffed with the delay in getting the project off the ground, CEIB reported the matter to Revenue Secretary N K Singh two months ago. Singh discussed it with the Central Board of Direct Taxes, Narcotics Control Bureau and the Central Board of Customs and Excise. However, it has had no impact on the inflow of information. Though the agencies have attributed the delay in supply of data on old cases to the lack of personnel, they are reluctant to part with information on the ongoing/new cases - lack of trust being the obvious reason.
