Blackmoney: Probe agencies asked to keep FIU identity secret

New Delhi: Tightening confidentiality rules governing exchange of secret data on black money cases, government has directed probe agencies to stop identifying the Financial Intelligence Unit (FIU) by name except when sought by a court during legal proceedings.

Official sources said the decision was firmed up and notified after a high-level inter-ministerial meeting was held recently on the subject of black money and it was decided that FIU, an intelligence gathering and dissemination agency under the Union Finance Ministry, should be provided appropriate “secrecy in identity” on the lines of central security agencies like the Intelligence Bureau and the Research and Analysis Wing.

They said certain foreign countries have also sought a similar secrecy cover while sharing information with their Indian counterparts in connection with sensitive domestic investigations into instances of money laundering, tax evasion and certain corruption cases attached with a financial angle.

The FIU, apart from the Central Board of Direct Taxes, is the vital agency which is legally empowered to have liaisons in the country with banks and financial intermediaries and with overseas FIUs and probe bodies to seek information against Indians and others who are being probed by various Indian investigative agencies.

Similar secrecy clauses of confidentiality ride the exchange of information treaties like the Double Taxation Avoidance Agreement (DTAA) and the Tax Information Exchange Agreements (TIEAs) that India has with several countries and they stipulate that data obtained by one particular agency cannot be shared with the other mutually and the latter will have to approach a competent court to lay their hands on the same.

An official note issued to this effect by a central probe agency said data on black money holders, tax evaders and money launderers received from the FIU is “confidential and utmost confidentiality must be mentioned in handling and with respect to custody of such information.”

“It should be protected from unauthorised use and proliferation. The information received from FIU, domestic as well as foreign, needs to be treated as intelligence and the same be further developed by the department’s own investigation.

“Accordingly, FIU will not be mentioned as the source of information in any place or occasion or document like assessment order/summons, correspondence etc, except when required by a competent court of law,” the directive said.

Sources said instructions in this regard have been issued recently to central probe agencies like CBI, Income Tax department, Enforcement Directorate, DRI and others. These departments have been instructed, sources said, that while summoning an individual or entity on the basis of secret information received against them from the FIU, the authorities should not mention the primary source of data but rather use words like “credible information or source information has been received to the effect…”

The issue of secrecy clauses riding these cases, especially with overseas links, has been a point of contention between the agencies in the past as the Income Tax department and the CBDT have earlier refused sharing of foreign obtained snoop data on an individual with the ED and CBI as the treaties stipulate that such sharing of information cannot be mutual but only through the courts.

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