MK YADAV sz; Be Your Dream. QUALITY ENRICHMENT PROGRAMME (QEP) MAINS 2020-21 wei QEP BASIC & ADVANCED THEME 1: PART 2 OF 2 INTERNAL SECURITY INDEX 1 | BORDER MANAGEMENT & COASTAL/MARITIME SECURITY: Key facts; Border Management | 1 (Challenges, measures, recent initiatives); Coastal security (Need, challenges, Initiatives post 26/11, Way forward), Questions for Class Discussion 2 | TERRORISM & ORGANIZED CRIME: Key facts, Terrorism (types, govt counter terrorism | 8 strategies), Terrorism & Technology, Questions for Class Discussion 3 [MOB LYNCHING & MOBOCRACY: Key facts, Causes & Consequences of Mob Lynching, | 16 Measures undertaken, Way Forward etc. @ | BLACK MONEY & MONEY LAUNDERING: Defining - Black Money & Money Laundering, 20 Tax Evasion, Tax Avoidance, Tax Planning; Impact of ML/BM, Measures Undertaken, Way forward ete. * We took all care in preparing this document. if you stil find any discrepancy in the information provided, please inform us at info@theiashub.com | Published by: www.theiashub.com | thelAShub © 2019 | All Rights Reservedte IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV } 2 | BORDER MANAGEMENT & COASTAL/MARITIME SECURITY 1.1 KEY FACTS: INDIAN BORDERS Land Border + India has a large and complex land border, covering | Name ofthe country | pens of he around 15,000 km, which it shares with 7 countries - [=——oaccn 7m Bangladesh, China, Pakistan, Nepal, Myanmar and [China Riso Bhutan, as well as a small portion with Afghanistan. Pakistan 3.5280 ‘* Border areas are marked by all possible types of [Nepal 1.7510 terrains—deserts, fertile lands, swampy marshes, snow- [Myanmar 1,643.0 covered peaks and tropical evergreen jungles. ‘Alghanistan 1060 Total 75,1087 Maritime Borders ‘* Asa peninsular country, India has a coastline of more than 7,500 km of which the mainland accounts for 5,400 km and rest comprises coastline bordering islands (distributed among 9 coastal states and 4 UTs) > 7" longest in the world. ‘+ 1/5* of the population and 3 of India’s metropolitan cities are settled along the coast. ‘+The coastline houses 12 major and 200 minor ports. Cross Border Infiltration: Present situation ‘© Indo Pakistan Border - _ InJ &K, while cross-border infiltration is down by 43% in 2019 (from 2018), the number of infiltrations attempts has increased after 5" August 2019 (Revocation of the special status of J&K, and its bifurcation). - Ceasefire violations to facilitate infiltration attempts - 2019 witnessed the highest number of ceasefire violations by the Pakistani troops, in the last 16 years, along the J&K border > an average of 9 such violations daily ‘© Indo-Bangladesh Border — in 2019, detected infiltration has dropped by over 60% since 2015. ‘© Indo-Myanmar Border ~ In 2018, the maximum number of cases of infiltration was reported from Indo-Myanmar Border. - “Operation Sunrise” - Joint operation by India & Myanmar armies (along Mizoram, Manipur, Nagaland ‘and Assam border) against NSCN (K), Kamtapur Liberation Organisation (KLO), ULFA, National Democratic Front of Boroland (NDFB), and Arakan Army etc were carried out. jegal Migration: According to Census 2011: ‘* Around 5.5 million people in india had reported their last re population). ‘© Of these, 2.3 million (42%) came from Bangladesh and 0.7 million (12.7%) from Pakistan. The number of immigrants from Afghanistan was low at about 6,500. lence outside the country (0.44% of its total Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reservedte IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV 1.2 BORDER MANAGEMENT + Aim of border management - Securing India’s borders against interests hostile to the country, and facilitating legitimate trade, ‘commerce & movement of people from India to other countries, and vice versa. - This calls for coordination and concerted action by various administrative, diplomatic, security, intelligence, legal, regulatory, and economic agencies of India. - _ Italso includes cross border cooperation with the neighbouring countries. ‘* The MHAis responsible for: (i) Management of international lands and coastal borders (i) Strengthening of border guarding (ii) Creation of infrastructure such as roads, fencing, and lighting of borders. ‘+ Approach and practices of border management vary from one border to another, based on the security perceptions and relationship with the neighbouring country. Need & Challenges of Border management — To be discussed in the class Border Management Measures by Gol: 3 Essential Processes 1. Deployment of border guarding forces - Guarding of the Indian borders is undertaken by the various border guarding forces, which are deployed along different borders as below: * Border Security Force (BSF): The security of Bangladesh and Pakistan border ‘+ Indo-Tibetan Border Police (ITBP): The security of the China border ‘* Sashastra Seema Bal (SSB): Nepal and Bhutan border. Assam Rifles (AR): Indo-Myanmar Border. * LoCon the Indo-Pakistan border and the LoAC on the Indo-China border is protected by the Indian ‘Army (along with BSF & ITBP forces, respectively) ‘+ Indian Navy is responsible for overall maritime security, which includes coastal & offshore security. * Indian Coast Guard (ICG) ~ additionally designated for coastal security in India’s territorial waters including areas lo be patrolled by Une Coastal Police, ‘+ The coastal State (Marine) Police acting as the second line for coastal patrol. 2. Border Surveillance and Management > Multi-pronged approach © Surveillance ~ Round-the-clock surveillance and regular patrolling on the borders and establishment of observation post. - Use of Electronic surveillance equipment such as night vision devices, handheld thermal imagers, surveillance radars, direction finders, unattended ground sensors and high-powered telescopes. ‘+ Intelligence gathering & Sharing - upgradation of intelligence setup and enhanced coordination with the state governments and concerned intelligence agencies. ‘+ Border security = Construction of border fencing and floodlighting. = Technological solutions, such as Comprehensive Integrated Border Management System (CIBMS), for vulnerable areas where physical fencing is not feasible (along indo-Pakistan border and Indo-Bangladesh border). Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights ReservedIAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV + Use of watercrafts/boats and floating Border Out Posts (BOPs) for domination of riverine area of the border. ‘+ Conduct of joint operations with neighbouring countries. Recent Initiatives Along The Borders Comprehensive Integrated Border Management System (CIBMS) - Planned in the aftermath of Pathankot attack, to stop infiltration on 2900 km western border (from Gujrat to J&K) with Pakistan and, more recently, Bangladesh. - It aims at 24x7x365 surveillance of the border through advanced technology such as: CCTV Cameras, Thermal imaging, Night vision devices, Battlefield Surveillance Radar, Underground monitoring sensors, Smart fencing etc. - _ Laser barriers will cover 130 unfenced sections including riverine and mountain terrain— often used by the infiltrators. = BOLD-QIT (Border Electronically Dominated QRT Interception Technique) - will enable BSF to equip Indo- Bangla borders with different kind of sensors in unfenced riverine area of Brahmaputra and its tributaries. Border Protection Grid - Tobe set up in Indian states bordering Bangladesh. - The grid will comprise various elements, such as physical barriers, non-physical barriers, surveillance system, intelligence agencies, state police, BSF and other state and central agencies. Recent Implementation of Shekatkar Committee recommendations relating to border Infrastructure ~ for speeding up road constructions. Significance of above Initiatives ‘+ Ensures overall border security ~ through better coordination among security agencies, surveillance capabilities, intelligence sharing, etc instils a sense of security among Border States and its people. ‘+ Facilitates genuine trade and legitimate cross-border movement of people > economic opportunities to the border people. '* Curb various illegal activities like infiltration, trafficking, smuggling, fake Indian currency notes and drugs, radicalization, ete. ‘+ Prevents entry of illegal migrants some of whom have links with extremist groups for furthering anti- national activities with ulterior motives and posing threat to internal security. 3. Development of border areas - Lack of economic opportunities makes the border population more susceptible to illegal activities, such as drugs and smuggling. - _ Difficult terrain and lack of proper roads ant underdeveloped. - Asa solution to tackle these issues, the government initiated the ‘Border Area Development Program’ (BADP) in 1987, to facilitate the provision of the required socio-economic infrastructure and adequate security, and to eliminate a sense of alienation among the population living at the border. - Projects include construction of roads, bridges, education, skill development, safe drinking water, health, agriculture, sports activities, promotion of rural/border tourism etc. frastructure keep the border areas inaccessible and Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reservedte IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV 1.3 INDIA’S COASTAL/MARITIME SECURITY Need for Coastal Security ‘© Diverse range of topography — creeks, small bays, back waters, lagoons, swamps, small islands etc and absence of physical barriers on the coast. ‘+ Unsettled maritime boundaries ~ With Pakistan (Sir Creek) poses not only serious security challenges but also hinder offshore development. ‘+ Vulnerable to Maritime terrorism & anti-national activities - 1993 Mumbai blasts: explosives had been smuggled through the Raigad coast of Maharashtra; 2008 Mumbai terrorist attacks infiltration of terrorists through Mumbai coast, smuggling of goods, gold, narcotics, explosives, arms and ammunition, wildlife etc. ‘+ Lack of fool-proof security measures - intelligence Bureau audit, 2016: out of 200+ minor ports in India, 187 had little or no security at all ‘+ Illegal migration infiltration - creating problems at the receiving end (Gujarat creek, Sundarbans Creek, and southern coasts). Illegal and unreported fishing creates challenges to the livelihood security of Indian fishermen. ‘+ Strategic importance of coastal trade - A substantial part of India’s external trade (30% by volume & 70% by value) and energy supplies pass through seas and reach the India ports. ‘+ Armed Robbery/Piracy — on the high seas. But, shallow waters of the Sunderbans have also been witnessing ‘acts of violence and detention’ by gangs of criminals, that are akin to piracy. ‘+ Neighbourhood tensions - Physical proximity of India's coasts to politically volatile and economically depressed countries such as Sri Lanka, Bangladesh, Pakistan and Gulf countries adds to its vulnerability. ‘+ Important establishments around the coast - offshore oil exploration, defence, nuclear, industrial (esp. SEZs & CEZs) and other vital installations. ‘+ Straying of Indian Fishermen Beyond Maritime Boundary - Threat of being illegally detained by Pakistani forces, or source of tension between India & Sri Lanka > both impacting the National security. Mumbai attacks (26/11) After the Mumbai attacks in 2008, there has been a paradigm shift in the maritime security apparatus that increased emphasis on surveillance, intelligence gathering and information sharing amongst the various stakeholders to ensure an effective response to any emerging situation. sto boost Coastal Securi Government Initiati Key initiatives include: ‘+ National Committee for Strengthening Maritime and Coastal Security as an apex institution, headed by Cabinet Secretary, to coordinate all matters related to Maritime and Coastal Security. © Athree-tier security grid was installed with the Indian Navy, the coast guard, and the marine police Jointly patrolling India’s near-seas. + Indian Navy - Designated as the authority responsible for overall maritime security, assisted by the Indian Coast Guard (ICG), state marine police forces and other central and state agencies. - National Command Control Communication Intelligence network (NC3I) - A next - gen intelligence system set up by Indian Navy to improve surveillance & patrolling duties. With just one click, the Navy will be able to track the movement of ships & boats plying all along India’s coastline. - Information Management and Analysis Centre (IMAC) -Itis Indian Navy’s and Coast Guards joint ‘operations facility, which is the nodal centre of the NC3I. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights ReservedIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV = Setting up of IFC-IOR (Information Fusion Centre for Indian Ocean Region), within IMAC, for regional information sharing on commercial shipping. ~ Creation of Sagar Prahari Bal, a special cadre dedicated to Coastal Sec a thousand personnel and a hundred fast interceptor aircrafts. ‘+ Indian Coast Guard ~ Designated as the authority responsible for coastal security in territorial waters (12-200 Nautical Miles), including areas to be patrolled by the Coastal Police. - Coast guard has various responsibilities including Search and Rescue (SAR), Maritime Law Enforcement, Aids to Navigation, Ice Breaking, Environmental Protection, Port Security and Military Readiness. + Marine P¢ /, comprising more than Force: under the Coastal Security Scheme (2005), it was created with the aim to strengthen infrastructure for patrolling and the surveillance of the coastal areas, particularly the shallow areas close to the coast (up to 12 Nautical Miles) © Other ~ _ National Investigation Agency was set up in 2003 to deal with terrorist offences. ~ _ National Security Guard have been created to ensure rapid response to terror attacks. - The National Intelligence Grid (NATGRID) has been constituted to create an appropriate database of security-related information. - Coastal security exercises like Sagar Kavach and Sea Vigil helped to generate awareness about threats emanating from the sea as well as to develop synergies among the concerned agencies. - Community Interaction Programmes (CIP) — For the fishermen, to create awareness about safety & security issues at sea, and develop them to be the “Eyes and Ears” for intelligence gathering. ~ Issuance of Fishermen Biometric ID Cards. ~ Tracking of Vessels/Boats - All vessels above 20 metres length are mandatorily required to be fitted ‘with Automatic Identification System (AIS) equipment. Also, satellite-based transponders are being installed in sub-20 meters fishing boats. ~ Coastal Police Stations - to deal with all Crimes committed in the International Waters. - National Academy of Coastal Policing (NACP) ~ for training & capacity buidling purposes. Further Challenges to Coastal Security * Lack of coordination — multiplicity of authorities from the Union, the states as well as private Ee Tdian actors > difficulties in consolidation of various | phe He stakeholders. * Inadequacy of resources ~ Deficient financial, (Roepe Sekai Gok human, and training resources act as impediments to implementation of the coastal [Resides security initiatives by states, [sea * Political pressure from the locals - District | | exvewe administration is responsible for allocating infrastructure to Coast Guards. ‘+ Issuing of ID cards to fishermen: Not adhered to. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reservedte IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV + Merchant ships still fil to give the mandatory 96-hour arrival information. * Setting up of marine police stations has been slow because of states’ reluctance. ‘Questions for Class Discussion 1. How does illegal trans-border migration pose a threat to India’s security? Discuss the strategies to curb this, bringing out the factors which give impetus to such migration. (CSE, 2014) - Sample answer by Topper shared as a separate PDF. 2. Border management is a complex task due to difficult terrain and hostile relations with some countries. Elucidate the challenges and strategies for effective border management. (CSE, 2016) PREVIOUS YEAR QUESTION: SAMPLE APPROACH 2. Rorder management is a complex task due to difficult terrain and hostile relations with some countries. Elucidate the challenges and strategies for effective border management. Answer Structur Intro: Define Border management and its need (long border, porous border, historical reasons (Pakistan) etc.) Body: Address every Part of the question Part 1: How it is a complex task, give examples of difficult terrain, hostile relations Part 2: Challenges and strategy for effective border management. Conclusion: Emphasize on even though difficult but how India is handling it. Answer * Border management is referred as control and surveillance of border taking into considerations of national security, and legitimate movement of people and goods in and out of the country. * India shares a long land boundary (15000 km) with 7 of its neighboring countries making border management a complex task, especially in view of highly volatile neighbourhood. * This control and surveillance get challenging due to: - _ Difficult & Complex Terrain — Desert, swamps, snow capped mountains (India China border), dense forests (India-Myanmar). ~ Hostile relations (POK, China) - State and Non state support for cross border infiltration & support for extremist movements in north east = Porous & Undemarcated boundaries — Smuggling, drug & human trafficking; border clashes; illegal immigration etc. = Unilateral action by countries for eg. Building of CPEC and other highways/road/rails by China near Indian borders. - Lack of coordination among border management agencies (Indian Army, Central armed Police Force, State police etc). Poor Intelligence gathering and sharing mechanism. - Under resourced & ill - equipped border forces = Poor border infrastructure and underdeveloped border areas. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights ReservedIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV Way forward: Strategies for effective management of Border - SECURITY ‘* S-Security forces on borders ‘+ E- Economic development of border areas - to take into confidence the local people on the border villages. Fast track implementation of Shetkar Committee recommendations on Border Infrastructure. ‘+ C- Cooperation and joint operations among agencies of neighbouring states eg. Operation Sunrise with Myanmar, and leveraging regional forums like SCO, BIMSTEC, EAS, BCIM to enhance social, economic and regional security. + U- Upgraded surveillance and infrastructure - Smart border management techniques (use of new age technologies and equipment's like drones, night vision cameras, motions detectors etc.). CIBMS is a step in the right direction. ‘+ R-- Regional integration with rest of the country ~ Establishing Physical and emotional connect ~ NE, LWE, J&K. Streamlining standard operating procedures in consultation with all the stakeholders, ‘+ = Intelligence and information sharing - Co-ordination among internal agencies (Customs, Immigration, Armed forces, Para-military forces and intelligence agencies, state police etc.) T- Trade points across border — to facilitate legitimate trade, and forge dependency links. Y- Youth engagement to target illegal migration, Drug abuse, trafficking, smuggling etc. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reservedthe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV } 2 | TERRORISM & ORGANIZED CRIME. 2.1 WHAT IS TERRORISM? 2.2 KEY FACTS: TERRORISM In legal terms, although the international community has yet to adopt a comprehensive definition of terrorism, it is commonly understood to refer to acts of violence that target civilians in the pursuit of political or ideological aims. The Global Terrorism Index, 2019 detines terrorism as ‘the threatened or actual use of illegal force and violence by a non-state actor to attain a political, economic, religious, or social goal through fear, coercion or intimidation’. The nature of terrorism today is shifting from traditional international terrorism of the late 20th century into a new form of transnational non-state warfare, backed modern warfare & digital technologies. ‘As per the 2019 Global Terrorism Index (GTI), India’s rank fell from 8" in 2017 and 2018, to 7" in 2019, reflecting a worsening of the overall security situation in the country on grounds of terrorism. 2 Diverging trends since 2019 - The number of terrorist attacks has increased by 14%, peaking in 2016. In 2018, India ranked 3"*in the countries with the greatest number of terrorist attacks - The number of deaths from terrorism has dropped by 53%. In 2018, about 70% of attacks had zero fatalities. India faces diverse terrorism threats — - Terrorism in the hinterland of the country. = Terror attacks by Left Wing Extremism in certain areas = Cross-Border terrorism in Jammu & Kashmir - Terror attacks by Insurgent groups in the North Eastern States ~ _ Revival of Khalistan Movement in Punjab India’s region most impacted by terrorism in 2018 was Jammu & Kashmir, with attacks mostly perpetrated by the Hizbul Mujahideen (HM), Jaish-e-Mohammad (JeM) and Lashkar-e-Taiba (LeT). India’s 2 most impacted region was Chhattisgarh, in the center of the communist "red corridor” (LWE) Deaths from terrorism fell for the fourth consecutive year after peaking in 2014 (decreased by 52% since 2014) > largest falls occurring in Iraq and Somalia on the back of the defeat of ISIS in Iraq, and Us-led airstrikes on Al-Shabaab. Despite decrease in deaths, the number of countries affected by terrorism is growing, with 71 countries suffering from at least one death - the 2” highest number of countries since 2002. Afghanistan has replaced Iraq as the most affected country by terrorism. Taliban has overtaken ISIL as the world’s deadliest terrorist group in 2018. The number of deaths attributed to the Taliban rose by 70%, accounting for 38% all deaths globally Lone wolf attacks account for 70% of all terrorism deaths in the west, from 2006 to 2014, and are attributed to a mixture of right-wing extremists, nationalists, anti-government elements, other types of political extremism and supremacism, Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights ReservedIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV ‘* OECD and non-OECD countries share common drivers of terrorism like greater political terror, lower respect for human rights, lower respect for international law (UN and EU), the existence of religious freedom policies, group grievances, and political instability all correlate with higher levels of terrorism. ‘+ Costs to contain terrorism (indirect costs) are greater than the direct costs of terrorism - The global economic impact of terrorism in 2018 amounted to $33 billion, a decline of 38% from its 2017 level. Types of Terrorism + Ethno-Nationalist Terrorism: Terrorism motivated by ethnic-nationalist and separatist aspirations (insurgent groups in North East india). * Religious Terrorism: Motivated largely by religious imperatives and it embraces different means of legitimization and justification compared to other terrorist groups, and these distinguishing factors make religious terrorism more destructive in nature. Eg. JeM, ISIS, Indian Mujahideen etc. * Ideology Oriented Terrorism: i. Left-wing Terrorism - Violence against the ruling elite mostly by the peasant class. Leftist ideologies believe that all the existing social relations and state structures in the capitalist society are exploitative in character and a revolutionary change, through violent means, is essential. ii. Right-wing Terrorism- Right-wing groups generally seek to maintain the status-quo or to return to some past situation that they feel should have been conserved. They may force the government to acquire a territory or to intervene to protect the rights of an ‘oppressed! minority in a neighbouring country (i.e: Hindu right-wing terrorism). + State-sponsored Terrorism - Some countries have embraced terrorism as a deliberate instrument of foreign policy, for eg. Pakistan. One distinction of state sponsored terrorism from other forms of terrorist activity is that itis initiated to obtain certain clearly defined foreign policy objectives rather than grabbing media attention or targeting the potential audience. + Narco-terrorism: The attempt by narcotics traffickers to influence the policies of the Government by systematic threat or use of violence. 2.3 GOVT. STRATEGY TO COUNTER TERRORISM Key Strategies: To be discussed in the Class Counter terrorism: Institutional & Legal Provisions ‘* Counter Terrorism and Counter Radi n (CTCR) Division ~ set up within MHA. It deals with matters relating to policy and operational issues on terrorism. ‘* National Investigation Agency (NIA) - constituted under the NIA Act of 2008 as a Central Counter Terrorism Law Enforcement Agency. ‘* Multi Agency Centre (MAC) - created as a multi-agency intelligence coordination mechanism for counter terrorism, with the mandate to share, collate and disseminate terrorism related inputs on a day-to-day basis. ‘* National intelligence Grid (NATGRID) - 2 framework that leverages Information Technology to connect security/law enforcement agencies with designated data provider data providers like airlines, banks, SEBI, railways, telecom etc., with a view to enhance the country’s counter terrorism capability. ‘+ Combating Financing of Terrorism Cell - in the MHA deals with the policy matters on Combating Terrorist Financing (CFT) and Fake Indian Currency notes (FICN). Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights ReservedIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV ‘* National Security Guard - raised in 1984 to combat terrorism. Recently the 4 NSG hubs have been established at Mumbai, Kolkata, Chennai, & Hyderabad for rapid response to terrorist attacks. '* Unlawful Activities (Prevention) Act, 1967 as amended from time to time provides for dealing with terrorist activities in India. ‘* Recent amendments: The Parliament recently passed - Unlawful Activities (Prevention) Amendment Act, 2019 allowing the Centre and States to designate individuals as terrorists and seize their property, ~ National Investigation Agency (Amendment) Act, 2019 - to allow NIA to probe terrorist acts against Indians and Indian interests abroad. It also secks to allow NIA to investigate cases of human trafficking, counterfeit currency or bank notes, manufacture or sale of prohibited arms, cyber- terrorism etc. 2.4 TERRORISM & TECHNOLOGY Use of Technology in Proy ‘+ Propaganda = Multimedia communications providing ideological or practical instruction, explanations, justifications or promotion of terrorist activities. = Modes - virtual messages, presentations, magazines, treatises, audio and video files and video games developed by terrorist organizations or sympathizers. ‘+ Recruitment, Radicalization & incitement - _ Internet provides access to global pool of potential recruits, with ‘precise targeting’ of the poor & marginalized, disillusioned youth, minors, gender specific targeting etc. = Lone wolf attacks by self-radicalised individuals using sources on the widely unregulated internet. For eg. In New Zealand, Paris, Bangladesh, Australia, UK etc - Modes - internet chat groups, Encrypted messages of Whatsapp, etc. © Financing ~ Use of digital transactions to raise finances for terror and to launder money. Modes ¥ Direct solicitation - websites, chat groups, mass mailing to request donations, Y e-commerce - online stores offering books, audio and video recordings and other items to supporters. Y Exploitation of online payment tools - electronic wire transfer, credit card, PayPal or Skype, or through identity theft, credit card theft, wire fraud, use of Indian share markets by SIMI to raise finances, use of Dark Net & cryptocurrency for buying arms by terror groups etc. Y Charitable organizations - shell corporations, disguised as philanthropic undertakings (seemingly legitimate fronts that are) © Training = On how to join terrorist organizations, construct explosives, firearms or other weapons, and plan and execute terrorist attacks. = Modes - detailed online manuals, audio and video clips, information and advice. - For eg. Inspire is an online magazine allegedly published by Al-Qaida in the Arabian Peninsula with the stated objective of enabling Muslims to train for jihad at home, Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 10Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV ‘+ Planning, Organising, coordinating, and executing attacks - Use of sophisticated Encrypted communication, UAVs, GPS Technology to plan and coordinate cross border terror attacks. - Foreg. Y During Uri and Pathankot attacks, GPS was used to infiltrate from blind spots of Border security agencies. Use of IED in Maoist areas with attacks remotely coordinated using mobile and satellite phones. 26/11 attack and use of satellite phones. Weaponized drones used by ISIS in Iraq 30 printers ~ In 2019, the attacker of a German synagogue used 3D-printed components of the home-made weapons. ‘© Cyber-attack/Terrorism is an emerging threat that can potentially target critical infrastructure like power transmission, banking, nuclear installations etc. India has witnessed 3” highest number of cyber- attacks in the world S088 Uses of the Internet for Countering Terrorist Activity ‘+ Gathering of intelligence - Knowledge about the functioning, activities and the targets of terrorist organizations is derived from ‘website, chat room and other Internet communications proactively prevent, detect and deter terrorist activity, ‘+ Gathering of evidence for the prosecution of Terrorist acts + Counter-narratives & Awareness creation ~ - Strategic communications that provide counter-narratives to terrorist propaganda can be disseminated via the Internet, through online discussion forums, images and videos, in multiple languages, to reach geographically diverse audience. ~ Successful messages may also demonstrate empathy with the underlying issues that contribute to radicalization, such as political and social conditions, and highlight alternatives to violent means of achieving the desired outcomes. ‘* Cross border Anti-terrorism Cooperation & coordination ~ given the global nature of terrorism & terrorists GLOBAL CASE STUDY: USING COUNTER NARRATIVES ‘* Center for Strategic Counterterrorism Communications (USA), in May 2012, responded within 48 hours, to banner advertisements promoting extremist violence posted on various websites by Al-Qaida in the Arabian Peninsula (active in Yemen), with counter-advertisements on the same websites, featuring an altered version of that same message, to convey that the victims of the terrorist organization’ activities were actually Yemeni nationals. ‘The counter-narrative campaign involved inter agency cooperation among the United States Department of State, the intelligence community and the military. ‘+ The Center also used media platforms such as Facebook and YouTube for counter-narrative ‘communications. Way Forward: Countering Misuse of Technology by Terrorists -To be discussed in the Class Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved cryIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV Global Measures to break Terrorism - Technology Nexus ‘©The Christchurch Call to Action - Initiated by the governments of France and New Zealand, along with top social media companies, after the Christchurch Mosques attacks in New Zealand. India recently signed it. It is collective, voluntary commitments by Governments and tech companies (online service providers) to eliminate terrorist and violent extremist content online and to prevent the abuse of the internet. ‘+ Measures taken by EU Internet Forum; G20, & G7, including work underway during France’s G7 Presidency on combating the use of the internet for terrorist and violent extremist purposes. ‘+ Global Internet Forum to Counter Terrorism (GIFCT) — Set up in 2017 by Facebook, Microsoft, Twitter, and YouTube, dedicated to disrupting terrorist abuse of members’ digital platforms. ‘+ Global Counterterrorism Forum ~ International forum of 29 countries with an overarching mission of reducing the vulnerability of people worldwide to terrorism by preventing, combating, and prosecuting terrorist acts and countering incitement and recruitment to terrorism. ‘© Tech Against Terrorism - launched and supported by the United Nations Counter Terrorism Execs Directorate. Aims at supporting the tech industry tackle terrorist exploitation of the internet, whilst respecting human rights. ‘* Aqaba Process - It is a multi-national forum established by the Hashemite Kingdom of Jordan (led by His Majesty King Abdullah 11) to enhance global coordination in the fight against terrorism and violent extremism, ‘Questions for Class Discussion 1. Terrorism is emerging as a competitive industry over the last few decades.” Analyse the above statement. (CSE, 2016) 2. Totackle the problem of terror, itis important that the world must speak in one voice and act in unison against terrorism. With reference to the given statement, discuss the importance of Comprehensive Convention on International Terrorism. Highlight the challenges in its implementation. 3. “While some argue that the terrorism and organized crime must be differentiated, others contend that they both go hand-in-hand and hence must be understood and battled together.” In the light of the above statement, enumerate links and differences between terrorism and organized crime. Sample answer by Topper shared as a separate PDF. PREVIOUS YEAR QUESTION: SAMPLE APPROACH, 1. Terrorism Is emerging as a competitive Industry over the last few decades.” Analyse the above statement. ‘Answer Structur Intro: Define Terrorism or start with something that relates terrorism with industry in brief. Body: Address every Part of the question Part 1: Terrorism as an industry Part 2: Emerging as a competitive industry Focus mainly on part 2 Conclusion: End with a positive note of how successful efforts are to control this industry and future, Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 2Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV Approach Answer: * Terrorism refers to acts of violence that target civilians in the pursuit of political or ideological aims. Certain factions within these terrorist groups, with more distinct and complex ideologies, are forming it into a terrorist industry. ‘* Anindustry needs funding or investment to survive and thrive in the market. Similarly terrorism requires funding and populist investments to support its aims and people to further the cause of ideology, and reach the masses by the act of terrorism. ‘+ As the demand in the market rises, the need to increase the supply rises and so the competition to deliver the unique product rises to sustain the market forces, same is the case with the terrorist organisations. Characteristics that give terrorism the form of Competitive industry are: + An increasing number of terror outfits with the same motive (Spread terror). Same as that of the industry with same products and highly competitive approach ‘+ Practice of more memorable violence - To maximize its reach and attract recruits. Similar to “brand recall” strategy of industries to access new markets and attract new customers. ‘+ Practice of innovation - Innovation in how to maximise their impact, like innovation in use of cyber technologies, 3 D printing, social media, Bomb technology (IEDs), suicide bombings, shootings, hijackings ete. ‘+ Marketing strategy - Use of Social media and use of Professional recruiters. ‘+ Provider of employment - Provide salary, pensions, death compensation to the family ing outfits - Al Qaeda & ISIS and its branches in Indian Subcontinent as well as Africa, W.Asia, S. © Franc Asia etc. '* Control of Factors of Production - Land: Competition between ISIS and Taliban in areas of Syria, Iraq and Afganistan - Capital: Funding from the state, orgnaized crime syndicates ~ Resources: oil resources, opium cultivation and arms trade. In spite of above similar characteristics, they differ as industries seek to produce goods and products not only with monetary profit but also with humanitarian profit, through legal means. With international awareness and community efforts coming together and joining hands, coordinated steps ‘must be taken to put an end to Terror industry by measures such as choking terror funding and access to organized crime industry, reducing demand through de radicalization measures, improving livelihood opportunities of vulnerable groups, monitoring of cyber space and social media, strengthening intelligence network, adoption of Comprehensive Convention on International Terrorism (CIT) ete. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved Bte IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV EXPECTED QUESTION: SAMPLE APPROACH 2. To tackle the problem of terror, portant that the world must speak in one voice and act in unison against terrorism. With reference to the given statement, discuss the importance of Comprehensive Convention on International Terrorism. Highlight the challenges in its implementation. Approach: '* Introduce by writing about the importance of tackling the problem of terror at international level. ‘+ Highlight the importance of Comprehensive Convention on International Terrorism. ‘* Discuss the challenges in its implementation. ‘+ Conclude by suggesting the measures to implement the convention. Answer Terrorism is becoming an endemic across the World, aided by new age technologies. According to Global Terrorism Index, 2019, the number of countries affected by terrorism increased to 71, which is the 2" highest since 2002. Its Global character is reflected in the terrorist attacks in New Zealand, Paris, Brussels, UK, Australia, Bangladesh, and in India (Pathankot, Uri, Pulwama attack) Hence, in order to tackle terrorism, itis imperative that world speaks in one voice and act collaboratively against it, To deal with the unique challenges of terrorism, there is an urgent need to restructure the international legal framework, Adoption of Comprehensive Convention on International Terrorism (CCIT) is an important step in this directi Importance of CcIT: CCITis a draft proposed by India, in 1986 that is yet to be adopted by the UN general assembly. Adoption of CCIT will help in following ways: ‘+ Facilitate arriving at a universally accepted definition of terrorism. ~ Clarity of definition of terrorism will help in delinking terror and religion. = [twill ensure criminalization of all forms of international terrorism, without differentiating between good o bad terrorists. * Curb and criminalize terror financing - It will deny terrorists, their financiers, and supporters access to funds, arms, and safe havens. ‘+ Impose legal obligation on the signatory countries to control terrorist activities within their countries. Hence, controlling state sponsored terrorism. + Ensure prosecution of all terrorists under special, internationally accepted laws. ‘+ Serve to make cross-border terrorism an extraditable offence worldwide, making it easier to extradite terrorists from the sheltering countries. + Enable identification and isolation of those who support and sponsor terrorism, and at the same time, furthering support to those in fight against terrorism. ‘+ Facilitate international cooperation in intelligence gathering and sharing. Challenges in implementation of CCIT Despite its noble objective, CCIT has been opposed by a few countries on various grounds. Some of the challenges in its implementation are as follows: ‘+ US and its allies: Concerns have been raised over the definition of terrorism. The U.S. has been worried about the application of the CCIT to its own military forces especially with regard to interventions in Afghanistan and Iraq. + Latin American countries: Latin American countries have raised their concern over international humanitarian laws as they fear that it will affect the implementation of their domestic laws. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 4Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV ‘+ Organization of Islamic Cooperation (OIC) countries: The OIC countries feel that the convention will be used to target Pakistan and will restrict the rights of self-determination groups in Palestine, Kashmir and ‘elsewhere in the world. Way Forward Hence, to accommodate concerns of the countries, following changes may be incorporated in the draft: ‘+ Draft may clarify that “the activities of armed forces during an armed conflict” will not be governed by the present convention. ‘* Efforts should be made for creation of Informal groupings of likeminded countries for issuing sanctions against terror financing nations. ‘Adoption of CCIT is in the favour of the whole humanity and to save the world from the threat of terrorism. World leaders should demonstrate their proactiveness in early adoption of CCIT and try to resolve the areas of concern with constructive discussion and debates. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 15te IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV MOB LYNCHING & MOBOCRACY: CAUSES & IMPLICATIONS 3.1 INRODUCTION What is Mob Lynching? ‘© Lynching refers to killing someone for an alleged offence without a legal trial. ‘+ Mob lynching refers to a situation where a lawless mob attempts to take justi rather than following legal due process. ‘+ The mob tries to deliver an instant justice based on their own perception of the accused and the crime committed, rather than valid evidence. ‘+ Lynching = collective hate crime 10 their own hands, 3.2 KEY FACTS: MOB LYNCHING ‘* According to Home Ministry data, 45 persons were Killed in 40 cases of mob lynching across 9 states between 2014 and 2018, The latest NCRB (2017) report did not publish mob lynching statistics, despite collecting the data for it. ‘As per Hate Crime Watch, Muslims, who constitute 14% of India’s population, were victims in 60% of. hate crimes; Christians, 2% of the population, in 14% cases; and Hindus, 80% of the population, in 14% cases. ‘* The mindless lynching has been carried out under various pretexts: - Cow vigilantism - Violence in the name of protecting cows. For eg. Cases in Alwar, Ajpur, Dadri etc. According to Human Rights Watch, radical cow protection groups in India have killed at least 44 people over the last 3 years. ~ Caste domination — For eg. A Dalit beaten to death by the Mer community members for allegedly farming on land meant for cattle grazing. - _ WhatsApp and rumour-based lynching- lynching triggered by fake news and rumours. For eg. on the suspicion of being child lifters (Recent case - Palghar lynching of 2 ascetics) = Instant Justice - in number of cases mob took the law in their hands and killed the accused engaged in crimes like theft, rape, murder, child lifting For eg. Recent cases in Arunachal Pradesh and Nagaland, - Other reasons ~ attack on People tagged as “COVID ~ 19 informants” etc. 3.3 ANALYSIS: MOB LYNCHING Causes of Mob Lynching ‘© Political causes ~ ~The political class has either remained a silent spectator or an active supporter of the cow vigilantes, who serve as political instruments to influence or protect their support base. - Often, communal cleavages are exploited to further the narrow, provincial interests of the Political class. ‘+ Institutional weakness ~The Government of India maintains no specific data with respect to “Wynching”. - The Indian Penal Code has no clear provisions for or definition of mob lynching, - Poor enforcement of rule of law by the agencies. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 16Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV - Weak prosecution, long drawn process of justice and biased agencies propel people to use unlawful means to seek justice. - A sense of confidence in the minds of people carrying out such vigilante activities, with such impunity, to remain unscathed from the reach of the law. © Social causes ~ Perceived injustice or unequal and unfair treatment by state or another group may lead to violent means to seek equality, - The ethnicity and religious identity of the accused is used to whip up anger among the mob. The victims of lynching and hate crime often belong to marginalised groups like Muslim, Adivasi, Dalit, Christian and others. - Failure on the part of agencies of socialisation like family, school, neighbourhood and media to inculcate values of rationality, empathy, compassion, justice and democracy. '* Economic causes ~ Illiteracy, lack of job opportunities and absence of medium of creative outlets fuels the frustration of the youth and turns them towards anti-social activities such as mob lynching. ‘+ Role of technology ~ Social media and messaging platforms have become source of spreading fake news, hatred towards minority, inciting fear towards someone or mobilizing a community to do such crimes. - Anonymity provided by these platforms allows miscreants to issue open threats to the dissidents and evade tracking by law enforcement agencies. Impact of Mob Lynching © OnState = _ Lynching is an open challenge to the legitimacy of the State, and India’s core constitutional values of secularism, tolerance, pluralism ete. = It destroys law and order in society, transforms democracy into mobocracy and threatens the security of the state. ~ Lynching is the violation of right to life granted under Article 21 of the constitution, - Radical and fundamentalist organisations could take leverage of atmosphere created by such incidents. ~ International image ~ reports of mob lynching of Muslims, Dalits, Christians, and other minorities have been condemned by international bodies, adversely impacting global perception of India, for eg. Observation made by UNHRC, U.S. Commission on International Religious Freedom (USCIRF), Human Rights Watch etc. + On Society = It creates deep fissures in the unity and integrity of India, especially with its potential to exploit marginalized sections such as poor, Muslims, dalit, women, etc. - This may create a feeling of alienation, discrimination, betrayal, and sub-nationalism among the exploited, which can lead to formation of retaliatory groups, - This leads to an atmosphere of fear, mistrust among the communities which may cause caste, class and communal hatred and violence. + OnEconomy - Social damages have a more long-lasting impact on the economy than a wrong policy. ~ _Itimpacts both foreign and domestic investment thereby adversely affecting the economy. = It directly hampers the migration of people and, thus, impacts the efficient allocation of human resources. - Large resources deployed to tackle such menaces induces extra burden on state-exchequer. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved vIAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21 Under the Guidance of M K YADAV Measures taken to Counter the menace of Mob Lynchi ‘Supreme Court Guidelines Y The Supreme Court (SC) condemned the growing incidents of mob lynching across the country and asked Parliament to consider enacting a new law to effectively deal with incidents. it observed that the “horrendous acts of mobocracy” cannot be allowed to become the new norm and has to be curbed with “iron hand”. The SCalso held that it was the obligation of the State to protect citizens and ensure that the “pluralistic. social fabric" of the country holds against mab violence It passed a slew of directions to provide “preventive, remedial and punitive measures” to deal with offences like mob violence and cow vigilantism. ~The state governments shall designate a senior police officer in each district for taking measures to prevent incidents of mob violence and lynching. ~ It shall be the duty of every police officer to cause a mob to disperse, which, in his opinion, tends to cause violence in the disguise of vigilantism or otherwise. - Curb and stop dissemination of irresponsible and explosive messages, videos and other material on various social media platforms. Register FIR under relevant provisions of law against persons ‘who disseminate such messages. = _ Ensure that there is no further harassment of the family members of the victims. ~ _ State governments shall prepare a lynching/mob violence victim compensation scheme. - Cases of lynching and mob violence shall be specifically tried by designated court/fast track courts earmarked for that purpose in each district. - To set a stern example in cases of mob violence and lynching, the trial court must ordinarily award maximum sentence upon conviction of the accused person. ~ If itis found that a police officer or an officer of the district administration has failed to fulfil his duty, it will be considered as an act of deliberate negligence. - SC recommended that the Parliament may create a special law against lynching, Government The Central government has asked states to appoint a nodal officer in each district to prevent the incidents of mob violence and lynching thas also asked to set up a special task force to procure intelligence reports about the people who are likely to commit such crimes. The government asked messaging platforms like ‘WhatsApp to find technological solutions to check on the fake messages, rumours, hoaxes etc. The WhatsApp Users can now forward messages to only five chats at one time, ‘* Manipur Government became the first in the country to hold public officials criminally accountable, if they fail to prevent hate crimes, ‘+ Manipur’s Anti-Lynching law laid down the duty and responsibility of the State Government to make arrangements for the protection of victims and witnesses against any kind of intimidation, coercion, inducement, violence ete. - Two high-level committees have been constituted by the Central government to suggest ways and legal framework to effectively deal with incidents of mob violence and lynching. Private member Bill - introduced by a Member of Parliament (Shashi Tharoor), that includes definition of “lynching”, provisions of strict punishment, protection of the witness and families of victims etc. I Society - The NCAML, a civil society, has released a draft law named “Manav Suraksha Kanon” (MaSuka) to curb the menace of mob lynching, Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 18,the IAS Way Forward QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21 Under the Guidance of M K YADAV * Inno civilized society, the lynching of a person by mob can be justified on any grounds, whatsoever. + Itis the right time to understand the gravity of the situation, identify the root cause of the problem (socio, economic, political etc.), and devise a comprehensive programme including constructive discussions, introduction of a strong law, effective law enforcement, sensitization towards cultural iversity and marginalised section, and socio economic programmes to harness the vibrant demographic ividend of India. © Evils of casteism and communalism have to be eradicated to usher in “New India” by 2022. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 19the IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV Gi BLACK MONEY & MONEY LAUNDERING 4.1 INTRODUCTION What is Black Money? While there is no legal definition of black money, in simplest term it refers to “income on which tax has not been paid”. Black money can come from two broad categories: ~ Tax evasion on income generated through Legal (but unreported) activity. - Money obtained from lllegal activity (smuggling, extortion, kidnapping, trafficking etc.) > Only this portion of Black money is included under Money laundering, in the case of India. A 2015 FICCI report estimated black money in India to be as high as 75% of the GDP. India’s hawala market is estimated at 30-40 % of the formal market. What is Monev Laundering? With rise of Technology-based It refers to a process by which large amounts of “illegally” | financial infrastructure, there is an ‘obtained money is given the appearance of having originated from a legitimate source In case of money laundering, the generated black money must involve a predicate crime or a scheduled offence, as specified | symbols on computer screens) that under the Prevention of Money Laundering Act, 2002. ‘can move anywhere in the world with Thus, money laundering bears a close nexus with organized | speed and ease > amplifies money crime. laundering risk. According to IMF, 2-5% of global GDP is laundered annually. increasing trend of “megabyte money" (i. money in the form of What is difference between Tax Evasion, Tax Avoidance, Tax Planning? Src Tax Evasion Tax Avoidance Tax Planning 1 | Where the payment of taxis | | Where the payment of taxis | Where the payment of tax is avoided through illegal | avoided by complying with the avoided by making use of means or fraud. provisions of law but defeating legitimate deductions & the intention of the law. exemptions provided explicitly by government. 2 Itis legally wrong Itis morally wrong, as main It is morally & legally correct. intention is to avoid paying taxes 3. | itis carried out after the tax | carried out before the tax ‘carried out before the tax obligation has arisen obligation has arisen obligation has arisen 4 | Methods- Concealment of | Methods - Round tripping, Methods - Availing Sec 80C by income, manipulating _| Transfer pricing, Treaty shopping investing in tax saving accounts, making false etc. instruments like PPF, Mutual statements etc. Fund, Insurance etc. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 20the IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21 Under the Guidance of M K YADAV However, both Tax evasion and Tax avoidance result in low revenues to the Government and thus the public services suffer more cuts. 4.2 IMPACT OF BLACK MONEY (BM) & MONEY LAUNDERING (ML) ON INDIA Threat to Financial Sector - At higher volumes of BM/ML activities, the financial sector becomes vulnerable to corruption, wherein criminal elements seek to increase influence over the entire financial system. - Iterodes depositors’ and creditors’ confidence as the frauds result in trust and reputational risk = laundered funds are unstable source of funding and a sudden withdrawal causes liquidity problems Financial & Economic impact ~ - Rise of parallel economy leading to underestimation of GDP. ~ Tax evasion leads to reduced tax collections and reduced fiscal capacity of government. This adversely impacts developmental & welfare expenditures > reduced economic growth + increased poverty. - Diversion of productive resources to sterile investments such as real estate, gold, jewelry. Thus, distorting saving and investment pattern. ~ Increase in conspicuous consumption > Increase in inflation increase in interest rate > high cost of borrowing > lower investment decreased economic growth. - Threatens financial stability of legitimate businesses who cannot compete with lower priced goods & services that businesses with laundered funds can offer. Thus, undermines free enterprise - Combating tax evasion/ ML requires expenditure on tax administration, audit, prosecution, putting a pressure on already limited government revenues. Social effects - Tax evasion leads to redistribution of income from the honest to dishonest leading to breach of horlzontal and vertical equity between members of the society. Political consequences - - Tax evasion } Non- achievement of the state's fiscal target > voter's dissatisfaction > political instability. Corruption ~ bribery becomes rampant at all levels eg. politicians, bureaucrats, accountants, financial institution, corporates > crony capitalism + money power in election > impacts the democratic fabric. Threat to National Security — = Undisclosed money flow in economy may be used to finance eriminal or terrorist activities. - Organized crime syndicates may infiltrate large financial institutions and acquire control over large enterprises/sectors through investment of the laundered money. Threat to external sector ~ large scale movement of illegal funds from one jurisdiction to another (‘capital fights’) may create exchange rate volatility for eg. Round tripping from Mauritius led to Rupee appreciation, making Indian exports less competitive, globally. Decrease in country’s reputation ~ Reputation as money laundering/terrorist financing haven may lead to loss of international trust, and reduced access to world market and financing to legitimate businesses. 4.3 STEPS TAKEN BY INDIA TO COUNTER MONEY LAUNDERING AND TERROR FINANCE Executive actions ~ Constitution of SIT on Black Money ~ Constitution of Multi-Agency Group (MAG) consisting of officers of Central Board of Direct Taxes (CBDT), Reserve Bank of India (RBI), Enforcement Directorate (ED) and Financial intelligence Unit (FIU) to probe Panama papers leak. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved aaIbe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV = Special Combating Financing of Terrorism (CFT) Cell created in the Ministry of Home Affairs in 2011, to coordinate with the Central Intelligence/Enforcement Agencies & State Law Enforcement Agencies. ~ Income Declaration Scheme - a window to violators to come clean by paying taxes, cess, and penalty amounting to 45% of total undisclosed income. - _ Demonetisation - It was the biggest blow to black money hoarders across the country. - Linking bank accounts with Aadhaar & PAN: huge success in getting hold of fake or Ghost accounts and tracking big and suspicious transactions. - ‘Project Insight’- ICT hased initiative for strengthening non-intrusive, information driven approach for improving tax compliance. - Operation Clean Money’ -using information on cash transactions & data analytics tools for e- verification of suspect cases. Portal launched. - Tightening norms on Participatory Notes by SEB! ~ _ Rationalisation of taxes - expansion of tax base and lowering of tax rates. ‘+ Other Policy Measures (for Corporates) - GAAR (General Anti-avoidance rule) ~ to check aggressive tax planning/treaty abuse ~ TAA amendments — with Singapore, South Korea, Cyprus, Mauritius ¥ Toenable levy of taxes in the country where income is generated rather than the country of residence of the company. Y Included ‘Limitation of Benefit’ clause — Deters treaty abuse and limits benefits to residents of two countries only. ~ Advance Pricing Agreements (APA) - Agreement between tax payer and tax authority on an appropriate transfer pricing methodology over a fixed period. = _ Base Frosion and Profit shifting — RFPS — G70 initiative to ensure that profits are taxed where economic activities are performed and where value is created - Place of Effective management (PoEM) - Income Tax Act was modified to provide that if ‘Place of effective management” of a company is in India, it will be considered ‘resident of India’ and taxed accordingly. islative Measures - Black Money (Undisclosed Foreign Income and Assets) and Imposi specifically deal with black money stashed away abroad ~ Prevention of Money Laundering Act 2002 Y Core of the legal framework to combat money laundering in India Y Includes crimes under various other legislations such as Narcotics, Drugs and Psychotropic Substances Act 1985, Unlawful Activities (Prevention) Act 1967, Immoral Traffic (Prevention) Act 1986, Prevention of Corruption Act 1988 etc - Amendment to Prevention of Money-laundering Act, 2002: Attachment & confiscation of property equivalent in value held within the country where proceeds of crime is taken/held outside the country. ~ _ Enactment of the Benami Transactions (Prohibition) Amendment Act, 2016 to amend the Benami Transactions (Prohibition) Act, 1988 and enable confiscation of Benami property and prosecution of benamidar and the beneficial owner. - The Smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA) ~The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPSA) ~The Foreign Exchange Management Act, 2000, (FEMA) In of Tax Act, 2015 to Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 22Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV © Institutions = Economic intelligence Council (EIC) Y Apex forum, chaired by Union Minister of Finance, responsible for oversight on government agencies responsible for economic intelligence and combating economic offences in India ~ Financial intelligence Unit (FIU) [under Department of Revenue, Ministry of Finance] ¥ FIU-IND is an independent body reporting directly to the Economic intelligence Council (EIC) headed by the Finance Minister. Y Responsible for analyzing and disseminating information relating to suspect financial vancial intelligence. transactions. It is not a regulatory body and only gathers and shares Y Coordinates efforts of national and international intelligence, investigation and enforcement agencies against money laundering and terrorist financing. - Enforcement Directorate (ED) [under Department of Revenue, Ministry of Finance] Y Responsible for enforcement of 2 key acts: Foreign Exchange Management Act 1999 (FEMA) and some provision of the Prevention of Money Laundering Act 2002 (PMLA) - Directorate of Revenue Intelligence (DRI) [under Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance] ¥- Itis an apex anti-smuggling agency of India, It enforces the prohibition of the smuggling of items (drugs, gold, diamonds, electronics, foreign currency, and counterfeit Indian currency) ~ National investigation Agency (NIA) Y Statutory body formed in 2008 under the NIA Act to combat terror in India. Y Terror Funding and Fake Currency Cell set up in the National Investigation Agency to investigate Terror Funding cases. ~ Serious Fraud Investigation Office (SFIO) [under Ministry of Corporate Affairs (MCA)] ¥ Probes corporate frauds (including shell companies) in coordination with IT Dept. / CRI ‘+ International Actions/Collaborations ~The Vienna Convention, 1990; It establishes a common policy on money laundering, - Financial Acton Task Force (FATF) - India has complied with all FATF requirements and Action Plan items. - G20 India played major role in developing international consensus for taking action against tax havens. = Multilateral convention of Mutual Administrative Assistance in tax Matters - Tax information Exchange Agreement (TIEA) - Section 94A inserted in Income Tax Act to black list country as non-cooperating if there is lack of effective exchange of information. €.g.: Cyprus was black listed in 2013 and removed last year. = Setting up Income Tax Overseas units to unearth black money in Mauritius, Singapore etc. Outstanding Challenges ‘Difficult to prove tax avoidance — since law firms claim that there is ‘no evidence of wrangdoing’. + Highly complex tools are used — financial derivatives, currency swap arrangements that are normally not well understood and scantily studied. Regulators don’t investigate a genuine transaction and look for any supposed underlying substance. + Signing DTAA and TIEA may not lead to intended impact as these agreements deal only with declared sources of incomes. * The black money travels through a sophisticated network of multiple tax havens. The investigative bandwidth of India may not match up to the enormous task of seeking and getting cooperation from these countries ‘+ Lack of political will as black money is prime source of election funding. Published by: vaww.thelashub.com | Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 23Ibe IAS QUALITY ENRICHMENT PROGRAMME: TARGET 2020-21, Under the Guidance of M K YADAV Way Forward * Focus must be on prevention of black money generation, because once generated, money is q laundered away to become untraceable. ‘+ Strict enforcement of tax and other laws. Loopholes in tax subsidies and grants to be checked and corrected. ‘+ The law must be periodically changed to catch up with global taxation reforms. ‘© Robust surveillance system to curb round tripping through shell companies. Clamp down on tax havens and end loop holes. Collaboration with other countries to ensure equality in corporate taxing norms. ‘Adoption of stringent corruption laws as a strategy of deterrence. Create more open and less discriminatory administrative system to remove tax terrorism. Simplification of tax system Training tax officials in CBDT to help them identify suspicious transactions. ‘© Name and shame scheme for huge tax evaders may be be adopted. Published by: www.thelashub.com I Contact: 9560082909 thelAShub © 2019 | All Rights Reserved 24