India's gems, jewellery sector vulnerable to money laundering: FATF

The ease with which the trade of precious metals and stones can be used to move "large amounts" of funds without leaving an ownership trail shows this sector in India is vulnerable to be used as a tool for money laundering and terrorist financing, the Financial Action Task Force (FATF) has said.

The Paris-headquartered global body said in its mutual evaluation report for India released on Thursday that the money laundering (ML) risks associated with the "smuggling and dealing" in precious metals and stones should be "further developed" given the size of this sector in the country.

The report said there were approximately 1,75,000 DPMS (dealers of precious metals and stones) in the country but its apex body-- Gems and Jewellery Export Promotion Council (GJEPC) only had 9,500 members.

Certificate of being a GJEPC member along with tax registration is mandatory for undertaking import or export of gems trade in India.

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