Terrorists frequently use the hawala channel, and the Anti-Terrorism Squad (ATS), which is investigating the 13/7 serial blasts, wants to be allowed to prosecute those involved in hawala transactions in terror cases under the Prevention of Money Laundering Act (PMLA).
Currently, only the Enforcement (ED), the Directorate of Revenue Intelligence (DRI) and the customs department can handle cases under the PMLA.
“The ATS has written to the home ministry for permission to prosecute under the PMLA in terror-related cases,” said a senior ATS officer, requesting anonymity.
Hawala is a system for transferring money based on trust, whereby money can be made available internationally without actually moving it or leaving a record of the transaction.
“In many terror cases, hawala has been used to finance the activity. But often it’s difficult to prove it,” the ATS officer said. So far, the police have secured a conviction for hawala transactions only in the 1993 bomb blasts case: hawala operator Mulchand Shah was convicted under the now repealed TADA.
As of now, when the hawala angle in a case has to be probed, the ED or the DRI is roped in, and copies of their investigation are used as evidence to prove the hawala angle. Police officials are not happy with this arrangement. Considering the difficulty in getting convictions against those involved in hawala, officials said they would prefer to do the investigation themselves. “It’s a problem. The DRI and the ED look into such cases differently, their styles are not similar to police investigations. That’s why the ATS wants the power to investigate under the PMLA,” explained a police official, on condition of anonymity.
Of the four accused arrested in the 13/7 case so far, two are allegedly involved in hawala transactions. According to the ATS, Rs 10 lakh was paid for the 13/7 blasts through the hawala channel, which originated from Saudi Arabia. It has arrested hawala operator Kanwar Pathrija for allegedly handing over the money to Indian Mujahideen top operative Yasin Bhatkal and Haroon Naik for masterminding the hawala operations.
Lawyer Mahesh Jethmalani believes that investigating agencies such as the ATS and the crime branch should be allowed to prosecute under the PMLA. “The DRI and the ED don’t have mechanisms like the police. At most they can assist the police in such probes,” he said.
Not having the power to investigate under the PMLA weakens a terror probe, said Jethmalani. “Most times, the masterminds use the hawala route, but the ones caught are the foot soldiers. If the police can investigate under the PMLA it will help prove the conspiracy better,” he said.
MN Singh, former city police commissioner, is of the opinion that it does not matter if the police don’t have the power to prosecute using the PMLA. “The DRI and income tax department can do it. When money-laundering is done in terror cases, it is covered under sections of conspiracy and other terror laws,” he said.