Financial sanctions against entities named by the United Nations Security Council (UNSC) for their links to terrorism and terror financing should be imposed "without delay" and within 24 hours under the UAPA and a law against use of weapons of mass destruction, the government has directed regulatory and probe agencies.
The Financial Intelligence Unit (FIU), the federal agency tasked to detect money laundering and black money in the country's economic channels, has been made the nodal agency for identifying, notifying and initiating legal action against such entities under section 12A of The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005, also known as the WMD Act.
India, as per official records, enacted the law as per its commitment to the country specific efforts under UNSC resolution 1718 (2006) and 2231 (2015), and their successor resolutions, as mandated under section 2 of United Nations (Security Council) Act, 1947.
The Department of Revenue (DoR) under the Union Finance Ministry issued a directive to the country's regulatory, investigative, intelligence gathering and State police agencies last month explaining the procedure for the implementation of the 2005 law that aims to prohibit the proliferation of "weapons of mass destruction", which stands for any biological, chemical or nuclear weapons. The law is a tool to affirm India's commitment to prevent a non-state actor and a terrorist from acquiring weapons of mass destruction and their delivery systems.
The DoR communication, which has been accessed by PTI, says that "orders have been issued under section 51A of Unlawful Activities (Prevention) Act (UAPA) of 1967 and under Section 12A of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005, by government implementing targeted financial sanctions related to terrorism and terror financing as well as proliferation financing against persons and entities designated by United Nations Security Council Resolutions and the list of such designated entities is communicated by MEA (ministry of external affairs) from time to time..."
"In order to ensure that the sanctions are effective and the designated individuals or entities are not able to divert or utilise the targeted funds and assets, it is important that the sanctions are imposed without delay as required in different international conventions.
"As per the established conventions and practice, it is clarified that 'without delay' in the context of all sanctions related to terrorism and terror financing as well as proliferation financing means preferably on the same business day but not later than 24 hours in any case," the DoR communication said.
The directive, issued in the form of an office memorandum, has been issued to country's banking regulator RBI, markets regulator Securities and Exchange Board of India (SEBI), insurance regulator Insurance Regulatory and Development Authority (IRDA), ministry of corporate affairs, the Intelligence Bureau (IB), the National Investigation Agency, chief secretaries and directors general of police of all states and Union territories, apart from other agencies in this domain.
The Centre, early this year, had designated the FIU director as the central nodal officer (CNO) under section 12A of the WMD Act.
This provision empowers the government, through the FIU, to freeze, seize or attach funds, financial assets or economic resources owned or controlled by the persons or entities named under the 2005 law, on similar lines of what is carried out under section 51 of the UAPA.
The FIU, as per the DoR order, will notify the above mentioned regulators and agencies after it receives the dossiers against such entities who, subsequently, will "verify the particulars of the entities/individual, party to the financial transactions, match with the particulars of designated list and in case of match, the reporting entities shall immediately inform the transaction details with full particulars of the funds, financial assets or economic resources to the CNO (FIU director) by email, FAX and by post, without delay".
If the central financial snoop agency finds that the the assets are "owned by or are held for the benefit of the designated individuals or entities, an order to freeze them under section 12A (of the WMD Act) would be issued by the CNO without delay and be conveyed electronically to the concerned reporting entity (like banks or financial intermediaries) under intimation to the respective regulators".
The CNO will also send a copy of such a freeze order to all state governments and relevant agencies so that any individual or entity may be prohibited from "making any funds, financial assets or economic resources or related services available for the benefit of the designated individuals or entities", the order said.
The CNO shall also forward a copy of the order to all DGPs/commissioners of police of all states/UTs for initiating suitable action, the DoR said, adding such an order "can be issued without prior notice to the designated individual or entity". The FIU will also have the powers to identify and designate such entities for reference to UNSC by India and also for de-listing such entities or individuals, as per the order.
