Trading of diamonds especially with a gulf country has come under the lens of intelligence agencies here for suspected terror financing and money laundering.
The matter of suspected terror financing and money laundering was red flagged by the Cabinet Secretariat and discussed during a recent high-level meeting between top government officials and revenue intelligence sleuths, official sources said.
The officials discussed a report collaborated by Paris-based Financial Action Task Force (FATF) and Egmont Group of Financial Intelligence Units highlighting that diamond trade was allegedly being used for routing of finances for terror activities, they said. During the meeting, discussion on the report raised some eyebrows as it cited overvaluing of exports of diamonds in absence of any stable price in India and highlighted record increase of trade of the precious stones and minerals with United Arab Emirates (UAE), they said.
The Central Economic Intelligence Bureau (CEIB) has been examining the inputs from other intelligence agencies in this regard, the sources said, adding, that Financial Intelligence Unit (FIU) has been asked to find out different typology and sharing of Suspected Transaction Reports (STRs) with other agencies to check it.
The CEIB is also considering to form an inter-ministerial team of officials from intelligence agencies, Commerce and Finance Ministries, among others, they said. Intelligence agencies are also relying on the findings of the report that claimed India to be one of the five countries along with Israel, Belgium, Canada and the US where trade accounts of diamond business have been used to launder illegal funds, the sources said.