The Enforcement Directorate (ED) has said that was a huge amount of unaccounted money circulating in Punjab, using the dubious Hawala transaction route. “There are hawala transactions that run into multi-crores in the state. The money has a strong link with the terror activities in the country and is a serious threat to the national economy as well,” assistant director of Enforcement Directorate (ED) Niranjan Singh told HT.
He claimed that majority of exporters in the state were involved in bogus export, to claim export incentives, provided by the union ministry. Explaining the modus operandi, ED sources said that union government provides 8-12% export incentive. To claim this amount, exporters run an elaborate racket where bogus exports are shown, especially to Dubai, where their own men, receive the consignment, posing as international buyers.
"Virtually, nothing is exported and only scrap filled in containers are sent on the invoice of costly genuine goods," sources said.
There is nexus among bank officials, custom officials and exporters as without their connivance such activity is not possible, the ED official said. Sources revealed that a list of such exporters had been finalised and the process of collecting evidence was on before conducting the raids.
"During the recent raid on Happy Forex, a list of such bogus exporters was recovered. We are in the wait and watch mode now," sources said. ED sources even indicated flow of black money earned by senior bureaucrats and police officials into Hawala transactions. Custom rules state that containers can be opened on the basis of suspicion and unscruplous officials allow bogus exports using this provision.
Sources revealed that Central Bureau of investigation (CBI) has already filed some cases against custom officials and unscrupulous exporters, which are pending in CBI court. HT investigation revealed that change of law from Foreign Exchange
Regulation Act (FERA) to Foreign Exchange Management Act (FEMA) has led a spurt in the Hawala transactions.
Sources also hold the change in law from Foreign Exchange Regulation Act (FERA) to Foreign Exchange Management Act (FEMA) as a major reason for the spurt in Hawala transactions. As per FERA, any financial irregularity involving foreign currency was punishable and the authorities had the power of arrest. However, under FEMA, there are no powers of arrest.
A leading handtool exporter told HT on the condition of anonymity confirmed the presence of such bogus exporters in the trade. Some exporters, who even do not have any manufacturing unit, indulge in 'bogus export' adopting the same modus operandi, he claimed.
"ED must take action against bogus exporters, so that genuine exporters are not harassed on the basis of suspicion," he said. He suggested that as a first step, all export units who have set up their units in Dubai be probed for 'bogus export'.