What role do Double Taxation Avoidance Agreements (DTAAs) and international information exchange frameworks play in addressing cross-border money laundering? Evaluate their effectiveness from India’s perspective.
Kartavya Desk Staff
Topic: Money-laundering and its prevention
Topic: Money-laundering and its prevention
Q5. What role do Double Taxation Avoidance Agreements (DTAAs) and international information exchange frameworks play in addressing cross-border money laundering? Evaluate their effectiveness from India’s perspective. (10 M)
Difficulty Level: Medium
Reference: TH
Why the question: India’s low conviction rate under PMLA despite a rising number of cases, along with evolving global standards like CRS and FATF compliance, makes it important to assess the effectiveness of cross-border financial cooperation tools. Key Demand of the question: The question seeks to understand how DTAAs and international frameworks help combat money laundering and evaluate their actual utility and constraints from India’s enforcement and policy lens. Structure of the Answer: Introduction: Briefly introduce money laundering as a transnational challenge requiring treaty-based and institutional cooperation. Body: DTAAs as anti-laundering tools: Explain how DTAAs enable legal, financial, and investigative cooperation for identifying and recovering illicit foreign assets. Role of global frameworks: Discuss the function of CRS, FATF peer reviews, and FIU-based intelligence in tracking cross-border money flows and pressuring non-compliant jurisdictions. Evaluation from India’s standpoint: Provide a balanced assessment of outcomes, highlighting improvements in data access, diplomatic leverage, and deterrence, along with ongoing issues like poor convictions, cooperation delays, and institutional gaps. Conclusion: Close with the need to bridge domestic institutional capacity with global commitments for a credible and effective anti-money laundering regime.
Why the question: India’s low conviction rate under PMLA despite a rising number of cases, along with evolving global standards like CRS and FATF compliance, makes it important to assess the effectiveness of cross-border financial cooperation tools.
Key Demand of the question: The question seeks to understand how DTAAs and international frameworks help combat money laundering and evaluate their actual utility and constraints from India’s enforcement and policy lens.
Structure of the Answer:
Introduction: Briefly introduce money laundering as a transnational challenge requiring treaty-based and institutional cooperation.
• DTAAs as anti-laundering tools: Explain how DTAAs enable legal, financial, and investigative cooperation for identifying and recovering illicit foreign assets.
• Role of global frameworks: Discuss the function of CRS, FATF peer reviews, and FIU-based intelligence in tracking cross-border money flows and pressuring non-compliant jurisdictions.
• Evaluation from India’s standpoint: Provide a balanced assessment of outcomes, highlighting improvements in data access, diplomatic leverage, and deterrence, along with ongoing issues like poor convictions, cooperation delays, and institutional gaps.
Conclusion: Close with the need to bridge domestic institutional capacity with global commitments for a credible and effective anti-money laundering regime.