India faces an increasing inflow of counterfeit currency, produced primarily in Pakistan, and terrorist and criminal networks use this money to finance their activities in the country, an official United States report has said.
"India faces an increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan but smuggled to India through multiple international routes," said the 2011 International Narcotics Control Strategy Report of the State Department.
"Criminal networks exchange counterfeit currency for genuine notes, which not only facilitates money laundering, but also represents a threat to the Indian economy," it said.
The Indian government should also extend the Prevention of Money Laundering Act to include gem and precious-metals dealers, real estate agents, lawyers, notaries, other independent legal professionals, accountants, and commodity futures brokers and to clearly add a safe harbour provision for those filing STRs in good faith.
Image: A Border Security Force soldier stands next to the body of a suspected smuggler near the border with Pakistan. A sum of Rs 6.5 million in counterfeit notes was recovered in the operation
Photographs: Munish Sharma/Reuters
