With an aim to nab black money stashed abroad, the government has amended the Foreign Exchange Management Act (FEMA), strengthening punishments for violators.
The amended FEMA allows for confiscation of domestic property of offenders and imposes a punishment of up to five years for the defaulters.
Finance Minister Arun Jaitley made the changes to this effect in the Finance Bill, 2015 passed by Lok Sabha yesterday.
Jaitley said the new law is to deal with the black money issue stashed abroad and not to harass anyone.
The Bill will now be taken up by the Rajya Sabha.
The new clause inserted in FEMA, says that a person having assets abroad in contravention of law will be liable to a penalty up to three times the sum involved. There is also a stipulation which states that in addition to the penalty, the offence will be “punishable with imprisonment for a term which extends to five years with fine”.
Further more, the new provision also says Enforcement Directorate can authorise prosecution of the offenders after recording reasons in writing.
A few days ago, the government had introduced a stringent Bill in the Lok Sabha to deal with the menace of black money stashed abroad.
Besides other things, the law provides for imprisonment of up to ten years for hiding foreign assets.
In order to fast-track the recovery of black money, the Bill proposes a one-time compliance opportunity for all those who have stashed black money abroad.
The US Federal Emergency Management Agency (Fema) exposed 2.3 million disaster survivors to possible identity theft, according to a new report.
The report by the Department of Homeland Security’s Office of Inspector General on Friday night said Fema improperly shared personal records of the survivors of hurricanes Harvey, Irma and Maria and the 2017 California wildfires, reports the BBC.
Fema admitted the leak but said it had found no evidence that the improperly-shared data was compromised.
Authorities said Fema shared participants’ home addresses and bank account information with a third party contractor.
The survivors provided information to Fema in the course of applying for shelters.
More than 20 data fields were improperly shared with the contractor, the Office of Inspector General said in the report.
The name of the contractor was not made public.
Fema spokeswoman Lizzie Litzow said that the sensitive information had been removed from the system following a review, the BBC said.
“Since discovery of this issue, FEMA has taken aggressive measures to correct this error,” Litzow said on Friday night.
“Fema is no longer sharing unnecessary data with the contractor and has conducted a detailed review of the contractor’s information system.”
Fema has previously been censured for mishandling information. A 2015 review by the same government watchdog found that survivor’s records were stored at a disaster-response centre in California in open, unsecured cardboard boxes.
Last week, the political climate was charged with accusations that the government had actually begun encouraging the promotion of black money. Prima facie, the charges seemed to have some merit in them. Swiss bank deposits from India had swelled by 50%, one of the largest increases in recent times. But the accusation was a bit uncharitable. For three specific reasons.
First, even though the percentages seem high, the total amounts involved in Indian deposits with Swiss banks are not. At CHF 1.02 billion – even after accounting for the 50% jump – the amount is significantly lower than the CHF 6.46 billion in 2006 when the UPA was in power. In fact, Indian deposits with Swiss banks had been declining for the past three years – right from 2014 when Prime Minister Modi formed his government. It was only last year that the trend was broken and Swiss deposits began climbing again.
The second reason was that Indian deposits with Swiss banks account for just 0.07% of global deposits with Swiss Banks. That is one of the lowest levels ever during the last decade, overshadowed by an even lower share of 0.05% in 2017. At such percentages, India’s deposits with Swiss Banks are not much to rant and rail about.
There is a third reason why people who are tracking black money should not be looking at Swiss Banks. True, they were the best shelter for clandestine money in the past. But Switzerland has entered into several bilateral treaties for making disclosures about bank deposits to requesting states. That includes a treaty with India to provide real-time information with regard to Indians from January 2019. Obviously, any Indian who wants to stash away black money will not do so with Swiss Banks, because he would stand exposed.
There could, thus, be one credible explanation for the quantum of deposits in Swiss Banks going up. It could be found in the government’s decision to ram through amendments to the Foreign Corrupt Practices Act (FCRA) in March this year.
which seeks to exempt political parties from disclosing their source of funds from overseas. The courts had earlier demanded that political parties make these disclosures and the government thought it wiser to try and change the law instead. This move is now being challenged before the Supreme Court as being unconstitutional by public spirited persons like EAS Sarma. The decision of the court is still awaited. The amendment to the FCRA technically permits politically connected parties to put their money back with Swiss Banks where it is safer than in tax havens with not-so-unblemished a banking record. If this explanation is correct, one could say that the government, in collusion with all other political parties (all have kept quiet about these amendments), are responsible for the spurt in Swiss deposits.
As mentioned in these columns earlier, if people want to look for black money, they should first demand a full fledged investigation into the agriculture income disclosures before the tax authorities during 2011 and 2012. What makes those disclosures horrifying is (a) they were larger than ever before; (b) the cumulative value of disclosures during the two years was a mind-boggling Rs 874 lakh crore (Rs 874 trillion); (c) the cumulative value of disclosures was eight times India’s GVA for 2013, and almost 100 times the total tax collected in that year.
It can be found in the decision of the enforcement authorities of not auctioning off properties they have seized in the past – irrespective of whether they relate to the NSEL Scam or the politicians who are being investigated for corruption (on extremely narrow charges). Attachment of properties makes for big news, full of sound and fury. But the refusal to auction them off points to collusion.
It can be found in the files of scores of senior officials who were suspended, when fraud was discovered, and then reinstated when public memory died. It can also be found in the files that routinely get burnt in fires that take place at government offices – possibly aimed at making evidence disappear – especially when it comes to corrupt deals and land development scams.
But these are things politicians do not like to talk about. Many of them are collusive partners in the generation of black money. Their silence in permitting the amendments to the FCRA is ample proof of their willingness to allow a cover-up. The rantings and ravings against Swiss Banks are, therefore, of no consequence. (IANS)
With the fussy mania of Bitcoin going around and past, your eyes and ears, in the news and peer discussions, you must be having some basic questions about it: What is bitcoin? Is it legal? How can I get it? But most of all, you must be thinking, ‘Is investing in Bitcoin safe?’
Bitcoin is the first ever cryptocurrency that existed, it was invented in 2009 by Satoshi Nakamoto.
Cryptocurrencies are nothing but computer codes that have monetary value. No Government has any control over them.
Bitcoins ‘self-contain’ their value i.e. there’s no need for any bank to move or store the money.
Bitcoin currency is completely unregulated and decentralized.
Bitcoins are mined, and they can be mined by anyone in the general public who has a strong computer. However, only 21 billion of bitcoins in total can be mined. Currently, there are around 11 million in circulation.
Bitcoin has no underlying physical monetary base to support its value, and it is totally subject to its demand in the market.
What are the risks?
Low demand: India has not legitimized bitcoin, hence investment returns are totally based on demand i.e. you get your return only if there is another buyer in the market who is ready to pay you more for it. Currently, the high-value of the digital currency owes to its high demand, but once people start selling, there is a possibility that rates will drastically fall.
Unregulated: There is no bank or government tax agency that can track your money and its movement. Hence, it can become a tool for money laundering.
Irreversible transactions: There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever.
Finance minister Arun Jaitley highlighted in a statement that cryptocurrencies are not legal tender and have no regulatory permission or protection in the country.
However, there was no announcement banning or imposing any curbs on the same. The government panel is also awaiting a report on tackling cryptocurrencies in India, Jaitley said.
The government has recently cautioned investors to be wary of virtual currencies like bitcoin, saying they are like Ponzi schemes with no legal tender and protection.
“One of the features of cryptocurrency is that there is lack of dependence on the state. It functions with a degree of anonymity. It operates within a virtual community which is created and enjoys the trust of that virtual community,” Finance Minister Arun Jaitley told the Rajya Sabha.
“The government is examining the matter. A Committee under the chairmanship of the Economic Affairs Department Secretary is deliberating over all issues related to cryptocurrencies to propose specific actions to be taken… Instead of taking any knee-jerk action, let’s wait for the report of this committee.” Jaitley added