Indians have $622 billion in tax havens

India's top cop has spoken. He says his countrymen are the largest depositors in foreign banks. Central Bureau of Investigation (CBI) director A.P. Singh said in Delhi on Feb 13 that Indians have illegally deposited an estimated US$500 billion (S$622 billion) in overseas tax havens such as Mauritius, Switzerland, Lichtenstein and the British Virgin Islands.

The Press Trust of India reported that he revealed this at the opening of the first Interpol global programme on anti-corruption and asset recovery in the Indian capital. This amount is more than twice India's external debt and close to 30 per cent of the country's gross domestic product (GDP) of US$1.85 trillion last year.

In a November 2010 report, United States-based Global Financial Integrity said India had lost more than US$460 billion between 1948, a year after its independence, and 2008 because of companies and the rich illegally funnelling their wealth overseas.

India Today noted that Mr Singh took a swipe at some of the countries ranked at the top of the honesty chart by Transparency International Index and said 53 per cent of these "least corrupt" countries are favourite destinations for parking black money by individuals and firms.

"For the criminals, it only involves setting up a few shell companies and making layered transfers from one account to another within hours as there are no boundaries in banking transactions," he said.

DNA reported that the CBI director said the jurisdiction in criminal law is territorial and does not apply to other nations. "Criminals use such principles to their advantage by often spreading the crime over at least two jurisdictions and investing in a third," MrSingh said.

He said that differences in legal systems, high costs in coordinating investigations, inadequate international cooperation and bank secrecy have made the task difficult for the anti-corruption authorities.

"Tracing, freezing, confiscation, and then repatriation of stolen assets is a legal challenge.

Managing the asset recovery investigation is complex, time consuming, costly and, most importantly, requires expertise and political will," he added.

The CBI headquarters in Delhi is hosting the six-day event and 39 police officers, investigators and prosecutors from several Interpol member countries are participating. The programme is a first of its kind in which investigators learn ways to identify the assets created out of corrupt practices.