Financial safety

… Misinvoicing — the deliberate misrepresentation of the value of goods being shipped — is not a source of black money; it is the mechanism through which black money leaves a country.

Recent data shows that, on average, close to 80 per cent of all cross-border illicit flows move through this method. Among Least Developed Countries, this is closer to 90 per cent. For India, it is — according to the nation’s official data filed with the International Monetary Fund — 99 per cent.

The positive side of this challenge is that affordable, commercially available, trade databases would allow customs departments to determine quickly if goods are being misinvoiced. Giving customs officials the ability to identify and interdict misinvoiced trade in real time is a gamechanger for development efforts. What is needed is a global consensus that this needs to be done. Modi can be the catalyst to see that this happens.

The hunt for black money