Diamond trade and terror financing.

The Financial Action task Force (FATF) and Egmont group of Financial Intelligence Units had put out this report ay back in Oct 2013. Assessing the risks of the sector, the report has stated that given the global, transnational nature of diamond trade, it has become much easier to launder money and finance terror. It also stated that use of diamond as currency, which is unique to the industry is the most commonly used method by these anti-social elements, where diamonds are difficult to trace and there is complete anonymity. Trade based money laundering is the most commonly used method by criminals to launder illegally gained funds. And the amount of money that can be laundered through diamonds is huge, running into millions and billion dollars and that makes it the most sought out mode of money laundering. The report 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.

This very same report, which runs into some 148 pages has come to the notice of the Indian Intelligence agencies as the report also states that in India, exports of diamonds are overvalued due to absence of any stable pricing, going on to highlight record increase of trade of the precious stones and minerals with United Arab Emirates (UAE).  The Central Economic Intelligence Bureau (CEIB) has been examining the inputs from other intelligence agencies in this regard. Very soon an inter-ministerial team of officials is also expected to be formed.

This once again highlights the need to curb any transaction which involves cash. Unless all big cash dealings are curbed and we make it mandatory to present a PAN card, such laundering, with horrible ramifications will continue. Not all diamond merchants are funding terror but at the same time, not all transactions are above board. .