CHENNAI: The Enforcement Directorate (ED) has flagged the issue of lack of a nodal officer and an anti-money laundering (AML) cell in the Tamil Nadu police for “facilitating seamless sharing of information” with the agency on cases to be investigated for money laundering.
The central agency’s office in Chennai has sent a letter to the TN’s head of police force/DGP recently, urging him to take steps for forming the AML and nominating an officer to improve inter-agency coordination, sources said.
The guidelines of Financial Action Task Force (FATF), an intergovernmental money laundering and terrorist financing watchdog, of which India is a member, underscore the need for a nodal officer for effective coordination among various entities. The appointment of such an officer is also required to ensure India’s rating in FATF does not drop, sources said.
Tamil Nadu is the only state in south India which does not have a nodal officer in the state police for sharing information with the ED, sources claimed, adding that multiple letters have been written by the ED to the Tamil Nadu police in the past in this regard.
ED can investigate cases under the Prevention of Money Laundering Act (PMLA) only after cases involving predicate offences like corruption, drug seizures, cheating and fraud, murder, cyber crime, etc., are registered by the state police, a Law Enforcement Agency (LEA).
Nodal officers trained by ED to spot cases for PMLA probe
PMLA is invoked to attach the proceeds of such crimes. Cases registered by other LEAs like CBI, Narcotics Control Bureau (NCB), and Directorate of Revenue Intelligence (DRI) also act as predicate offences.
According to a recent FATF evaluation report of India, the nodal officer in every LEA is supposed to capture information for ED on underlying predicate offences through two prescribed forms: Money Laundering-1 (ML-1) and ML-2.
The forms would contain details like statement of facts, location, persons involved, proceeds involved, proceeds attached, case status and names of investigating officers. The ED would get alerts regarding potential cases of money laundering through these forms.
Since the Tamil Nadu police does not have a nodal officer for the ED, the agency relies on open sources and media reports to launch money laundering investigation, sources said. For instance, the PMLA investigation into the alleged Rs 4,370-crore river sand mining case was based on predicate offences registered by the DVAC.
Delving into the importance of the nodal officer, FATF says that the officers are trained by ED to identify potential cases for money laundering investigation. It is the nodal officers who then need to use their judgement to identify cases which they believe warrant a money laundering investigation by the ED.
The nodal officers are also supposed to act as a bridge in case the ED, through its investigation, identifies a predicate offence and wants to share the information with the LEA.
This is done under Section 66 of the PMLA. Official sources also said a proposal has been sent to the TN government for appointing a nodal officer.Sources said the issue of nodal officers for inter-agency cooperation was even discussed during the conference of (DsGP) of all southern states in Chennai on October 19.
ED relies on open sources, media reports
Official sources said a proposal has been sent to the Tamil Nadu government for appointing a nodal officer. Since TN police doesn’t have a nodal officer, the ED relies on open sources and media reports to launch money laundering investigations, sources said.