There is a definite radical departure from FERA. For example, sections 8 to 31 of FERA are a labyrinth of regulations which do not promote any growth. They stopped financial dealings. On the other hand, the Foreign Exchange Management Bill is orderly. Admittedly, it is liberal and it will definitely promote financial dealings a great deal.

ɦ{i ɽn : + +{ ExEb EVB*

|Eɶ h j{` (nʮ) : ɦ{i V, Vɤ +{ i i +{ɺ E< ExEb xɽ E {i , i ʡ +{ E E * i ɽi vҮ-vҮ * +{ {S ʨx] + nVB*

ɦ{i ɽn : ɽ ʴ{I i + ɽ xɹ{I i *

|Eɶ h j{` : SʱB, Mɱi x VB*

The change in this Bill should be seen in relation to the Prevention of Money Laundering Bill. It is in the fitness of things that both the Bills are being considered together. It is our habit that we club all offences at the same level.

j{` Vɮ +{ iɺE E nJ E BE +n BE Sɴɱ E V , EU MɮҤ M E{c E V i =xE E M* BE +n V +Ҩ E V , =E E M + BE +n V lɪɮ E V , =E E M* ɽ x-cM ʤɱ Vn Ji , Vn Vɤi + `' Vn ʨxʺ]E , < i E ɨZx E Eʶɶ Ex SʽB*



+Mɮ +{ ɽ E E V SɨS Mɱi , lɪɮ, xɮE]E, <x ɤ {ɮ Ji BEx ʱɪ VB, E SV {ɮ <ix nɴ x bɱ VB i ɮ +v ESɮ Jɱ VBM + Vɺ SW {ɮ W nx SʽB = {ɮ W +BM*

EU ɽi +SU i <ɨ * i ɽ EM E `' ɪ E 21 n BE n֯i ɽ VBM* ɱb ]b E l <E iɱɨ Vn +SU M, ɽ gM + V J , ɽ {, +nx {, E =E `E E VB*

The Government which has the maximum number of draconian laws is the most corrupt one.

=E Ji Ex ɮ ʡE + <xxɪɱ <ƺ]]ڶx Wɤi M* <ʱB nx +x֮v EM E < ʤɱ E ɨlx E* < ʤɱ E ɨlx Ei *

SHRI RAMESH CHENNITHALA (MAVELIKARA): Mr. Chairman, Sir, I rise to support the two Bills introduced by the hon. Finance Minister.

Really speaking, these two Bills are very necessary in the changed circumstances. We are at the threshold of the new Millennium and we are in an era of liberalization and globalization.

In this changed situation, I think that stringent laws are very necessary to plug the loopholes and to teach lessons to the offenders. We are all aware that money laundering is the world's third largest business, next to petroleum and foreign exchange. This activity has threatened the sovereignty and integrity of the nations. The money derived from illegal activities is converted into assets and is appeared to have acquired from legitimate sources. Laundering is a secretive business, quantum is a guess work which is threatening the international financial system also.

According to the UN, the annual turnover from the global trade in illicit drug is 400 billion dollars. The laundering-men can avoid detection in a myriad ways, cash is funnelled in through offshore shell companies by using anonymous accounts and broken into small deposits to dodge rules that require banks to report all large deposits. It is very interesting to note that crores and crores of rupees are involved in this kind of transactions. The big men are involved in these illicit ways and it is now posing as a threat to the unity and integrity of the nations as well as threatening the very basic economics of countries. That money is challenging the State's economy. We can see what happened in Mexico, Thailand and some other countries. These are the examples before the nation.

It has been reported widely in newspapers that America has waged an economic war against nations which were not ready to enact laws to plug money laundering.

So, this is a very serious issue which is confronting not only India and other developing countries but also other nations of the world. Interestingly, as Shri Pawan Kumar Bansal has mentioned, there is a very close link between terrorism and moneylaundering. If you examine the terrorist activities throughout the world, you will find that there is a close link between the two, and India is not an exception. There was a mention about the Golden Triangle. Drug trafficking is taking place in the border areas of our country. India is one of the transit points of drug trafficking and it is corrupting our system. It is unfortunate that even the para-military personnel who are posted in the border areas are involved in drug trafficking and other things. It has been widely reported in the newspapers that the ISI is also involved in this kind of drug trafficking. India has become a main transit point for all these drugs. I would request the hon. Minister of Finance to plug the loopholes and take certain stringent measures in this regard. It is because, it involves the security of the nation. As rightly mentioned in the Statement of Objects and Reasons, the UN and other international agences have asked several countries to come forward and take measures to plug these loopholes in regard to moneylaundering. The UN held certain Conventions also. The UN and other international agencies are time and again asking the member countries to take corrective steps in this regard. It is sure that nobody would oppose the essence of this Bill, but at the same time, certain apprehensions have been raised in certain quarters about this Bill.

At the outset I would like to mention that I am supporting this Bill. It should be given more teeth. We should plug the loopholes. At the same time the apprehensions expressed in certain quarters, especially by the industrialists should be taken note of. Of course, the country cannot be converted into a Police State. At the same time we should see to it that the problems and issues raised by them are looked into in all fairness. It is because they are also the citizens of this country. They have given some Memoranda to the hon. Minister of Finance. I would request the hon. Minister to look into all these aspects. This Bill should not go against the basic organizations have raised certain issues. They have conducted a seminar which was widely reported in all the newspapers. They have mentioned that the investigating officer has been vested with the barbaric powers to summon, search, seizure and arrest based on his reason to believe.

Sir, it has been mentioned that under the Money-Laundering Act, the authorities will be empowered, merely on reasons to believe, to investigate and the officer will have the power to summon and extract statement from any person and the same shall be deemed to be judicial proceedings within the meaning of Sections 193 and 228 of the Indian Penal Code, 1960. On mere suspicion, the investigating officer will have the powers to search, seize and arrest. This aspect has to be viewed and the Finance Minister should think about this very seriously.

Another very important issue which is to be mentioned is the composition of the Appellate Tribunal. On the other day, when one of our Members, Shri J.S. Brar was complaining that officers are getting more powers, the hon. Finance Minister took offence to that. Now, let us see the composition of the Appellate Tribunal. It says that a person is or has been a judge of the High Court. Unfortunately, Mr. Finance Minister, your officers are misleading you. They want to take undue powers. Some of them want to serve in Appellate Tribunal after the retirement. What is the necessity for that? You are also taking the age limit to 65 years. Is there a dearth of officers? What is the need for that? We have qualified people in this country to serve on the Appellate Tribunal. Unfortunately, this is what is happening in our country. The officers who are sitting at the helm of affairs are influencing the Ministers and the Ministers are, knowingly or unknowingly, accepting whatever they are saying. My request to the hon. Finance Minister is that it should be modified as - a person is or has been or is qualified to be a judge of the High Court so that others also could get an opportunity. I think in all fairness the Minister will accept this proposal.

Now, I come to special courts. Shri Murthy has rightly pointed out that we are hearing or are witnessing all kinds of judicial proceedings in our country. Undue delay in the proceedings of our cases is affecting the people very much. Even though there is a provision for setting up special court, I am afraid that these proceedings will take more time and justice will not be getting to the people in time.

I think, the hon. Finance Minister might have gone through the serious observations made by the Reserve Bank of India regarding this Bill. The RBI has expressed the following view:

"The onus of proof in case of illegal money-laundering should be on the agencies who are trying these cases and not the accused."

According to the Bill, the accused has to prove it. This is against the jurisprudence. I think that this has to be viewed very seriously. Certainly other issues have also been raised by the RBI. But I do not want to go into them due to time constraint. The main issue which they have pointed out is regarding the onus of proof. I think the hon. Finance Minister will definitely go through these aspects. When we are passing a legislation, it should be foolproof and these lacunae should be plugged.

ʴii jɱɪ V j ( . vxVɪ E֨ɮ): ɦ{i ɽn, xɴnx E nx E ɨɪ +v Ph] E ʱB g n VB*

18.00 hrs.

... (ɴvx)

ɦ{i ɽn : +Mɮ nx E ɽi i nx E ɨɪ +v P] g n VB*

ʴii jɱɪ V j ( . vxVɪ E֨ɮ) : ɽn, ʺɡ n-ix M x ɱ , <E +V {ɺ E n*

{ɴx E֨ɮ ƺɱ (SbMg) : V i E =xE Eƺb EVB*

We are supporting the Bill, all right. But there are certain points which we have made. You please consider those points.


SHRI PAWAN KUMAR BANSAL : I am sure, you will consider them.

ɽ +{E ɪn * +{x V {ɱ E] xɪ , =E +ɴ iҺɮ + EU +ʺɺ E +x E] E {ɺ VBM, <xE BE E] E {ɺ JB* ɽ E +x E {ɺ x VB*

There are certain things which you please reflect over.

< Vɱn i EVB, E {ɺ E VB*

... (ɴvx)

ɨɪ E E< i xɽ * +v P] `M Ex +V +{ Eƺb EVB + E {ɺ E VB i +SU M*

... (ɴvx)

. vxVɪ E֨ɮ : + i Vɴɤ nM*

SHRI PAWAN KUMAR BANSAL : We do not mind. We would certainly want you to consider the suggestions which we have made. We are helping you. You have provided for Supreme Court judges. No Supreme Court Judge will come to sit in this Bench.

=ɨ EU xɽ *

... (ɴvx)

. vxVɪ E֨ɮ : = E nM*

... (ɴvx)

{ɴx E֨ɮ ƺɱ : ʡ nںɮ M* =ɺ +{E ʶE gM*

E] (֨< =iiɮ-{ڴ) : ɦ{i ɽn, ɺiɴ nx ʤɱ n ɱ {ɽ {ɺ Vi i V ʱɥɱ<Vx + BE xɪ <Ǯ |ɴ E =xE Vn ɨlx ʨɱi* V BE E{x P]x P] , = i E +{x ɹh |ɮ Ex SɽM* BE + ɦ xɪ Exx x E Eʤʱ] ʮEx g * ֨< E BE E{x , =x Eֱ ʨɱ E U: E]xɮ E BE{] E* =x U: Ec 89 J E BE{] E* Vɤ ɽ iɴ E]xɮ BE{] Ex E ʱB ֨< E {]-]ź] MB i E] E +vEɮ x ɽ E]xɮ J* Vɤ = nJ i ɽ +ɶSɪSEi MB, =ɨ lc-ɽi E{c l, VxE ڱ xɽ E ɮɤɮ l* {ɽ V =xx U: Eƺ<xɨ] BE{] EB =ɨ = E{x E MɦM 95 J E b] cɤE E { ʨɱ SE * ɽ x BE =nɽh n , B Ec =nɽh *

ɽn, j V ʺɡ ɽ |lx Ex SɽM E BE{] ʤVx E gɴ nx Sɽi , b] cɤE V Eƺ{] bɱ{ E , Vɤ E{]] E] |ɴ E iɤ E < ʴɹɪ {ɮ ʴSɮ M? BE V x bʮM E uɮ Exx E Ec xx Sɽi + nںɮ iɮ E Eƴ] EE Exx E + ʶlɱ Ex Sɽi * nx +{x-+{x VMɽ ɮɤɮ * ɺx + ɮEɮ E xi E ɨlx Ei * j V |lx Ex SɽM E Vɤ ɺx BE +SU n |Mi E , ɱ bg ɱ +SU |Mi < Ex |ɶɺx + Bbʨxɺ]x Vɺ |Eɮ E vɮ +x SʽB = {ɮ lc +vE vx nx E +ɴɶEi * +V xɽ, Ex E ʡ E +Ec ʨɱ EM E Eɡ{ E +iMi Eix E B + Eix M E -EW x] nB MB* =xɨ ʡ n BF n ]ɱ ]ɨ] Eix E EB MB + =ɨ Eix M E V <* {ɺ lc-ɽi +Ec Vx +V xɽ nx Sɽi * ɺx ɽi +SU n Sɱ * j V BE x< n V * ɽ Sɽi E V E|ixv =xE vɨ |ɶɺx E +vE BE=]ɱ x E ɽ VxEɮ nx +ɴɶE , B xi * ɮ n E E ʺli ? b] cɤE, Mɺ BE{], = |Eɮ E <{] E ɮ BE B BE{] x ʱJ -

A US expert has given one tip on this. He has quoted a case where on paper exercise bicycle was exported for a ridiculous price of 51 cents a piece against an average global price of around $100.

"Similarly, truck and bus tyres were imported from USA for over 1000 dollars a piece when actual price was around 150 dollars.

B i +xE P]xB Miɮ Vɮ + ɺiɴ ɱ, MM, cM-]ʡEM, x-xbʮM E < E l Ƥv * x-xbʮM E-E vɨ i , ɽ <E =iiɨ =nɽh * - Mɺ {ɮ Mɺ xɪi EE { |{i Ei + nںɮ + cM-]ʡE Fxɱ <x E l ɱ E vɨ { ɽ {ɮ Mi * BE + =nɽh nx Sɽi *

"It is estimated that over 100 billion dollars is generated and/or stashed abroad by resident Indians in defiance of FERA. It is still an enigma that many Indians on their return journey to Indian halt out of their way at Zurich ostensibly to change flight. The reason is best known to them only. (We also know as to why they are changing the flight.) We have seen the rising incidence of blank and white shades of money for the last few decades but the green money is surpassing all that."

nx E vx < + +Eʹi Ex Sɽi E V ɨɱ g =xE >{ɮ xɪjh Ex +ɴɶE * BE + =nɽh nx Sɽi E E x xbʮM ʤɱ x +ɴɶE * x<]b xx + E VMɽ V䱪ڶx {ɺ E Mɪ * x xbʮM ʤɱ BE VMɽ + ʱJ + E |i{h ]] E ={ɪM Ex SʽB + ɽ V x-xbʮM E {ɮ =E iʱi E] Ex E ʱB <E ={ɪM x SʽB* ɮ n֤< E l xɪ-xɪ |i{h v < * ɽɮɹ] ʽnֺix E ɤɺ c bx n=n V n֤< {Eix `E +b-ɱb E {ڮ {ɮ E] Ei , E |i{h ]] E =E E] Ex E ʱB ={ɪM Ei ?

ʡ bx V =xE ֨< c-c B{ɪɮ , i x-xbʮM ʤɱ E =xE ʱB ={ɪM E VB, B |lx Ei *

ɦ{i ɽn, V xɪ ʺɺ] x , ɽ {ڮ +lǴɴɺl E ʱB, <xʶɪɱ ʺɺ] E ʱB Vɽ * =E E] Ex E Vɰi * xɽ i ɮ ɱi EE il nںɮ n V VɪM* <ʱB ɽ xɪ Exx +i-+ɴɶE * ɽ M ʽnֺix iE ʨi xɽ *

"A report published in 1995 by Australia's financial intelligence unit concluded that between 740 million dollars to 3.3 billion dollars was washed through Australia each year. (The same is the position with Netherland also.) In Netherland, 14 per cent dubious cases went to police and only 0.5 per cent of the original suspects went for prosecution."

Ex +{x ɽ <E ʱB ɴɺl EE <E + +vE Ji E Ei * Vɤ x 1992 ʱɤɮ<Vx E xɪ M |ɴ E, iɤ = Eɮh BE |Eɮ E] BE=] E, x BESV E ʮE E* E] BE=] E + ʮE il {ɮn EE +V = n +M V * Ex l-l ɽ lc Si ɽ Ei Ex Sɽi E < ʤɱ E {ɮ Ex 6 ɽ xx E Mɪ E E] BE=] ]VEx E ɨlx E ʱB E{] BE=] ]VEx E U] nx E |ɪix jɱɪ uɮ, b{]Ǩ] uɮ *