India has made concerted efforts, through its leadership in G20, to address vulnerabilities in international cooperation

‘Follow the money’ is a proven strategy for countering serious economic offenses like corruption. In line with this ethos, India has implemented significant measures in the last few years to make bribe-taking unprofitable. Yet, significant vulnerabilities remain because the proceeds of corruption can be easily moved across national borders in an increasingly globalized world. During its G20 presidency, India has led a drive to reduce this vulnerability through improved and effective international cooperation.
Challenges in formal cooperation
Formal cooperation on corruption-related offences happens through Mutual Legal Assistance in criminal matters (MLA). While the Financial Action Task Force (FATF) requires countries to rapidly provide the widest possible range of MLA during investigation, prosecution, and related proceedings, the action on the ground is not always timely.
For example, the G20 Accountability Report on Mutual Legal Assistance 2023 released during the 3rd G20 Anti-Corruption Working Group (ACWG) Ministerial Meeting on 12th August in Kolkata, sheds light on the resolution of MLA requests in relation to certain G20 countries. As seen from the report, India has resolved 100% of the MLA requests it has received in corruption cases, whereas less than 10% of India’s MLA requests have been resolved.
Resolution of MLA requests suffer from delays due to a number of factors, such as differences in domestic legal frameworks, administrative and procedural gaps in the processing of MLA requests, lack of adequate and timely responses etc. Such delay affects live investigations as well as efforts to detect and freeze proceeds of corruption.
This creates significant vulnerabilities for countries in their fight against corruption. A known modus operandi of the corrupt is to hide their illicit gains behind a web of shell companies. To trace such assets, countries need access to beneficial ownership details of such companies. While India and a few other countries have provided public access to beneficial ownership details of companies, most countries do not. Crucial information on beneficial ownership has to be sought from them.
Once assets beneficially owned by the corrupt are traced, investigators need cooperation of the host jurisdiction to freeze and seize the assets, to ensure that the corrupt are deprived of the proceeds of crime. Cooperation is also required in collecting evidence for developing prosecution cases.
India has made concerted efforts, through its leadership in G20, to address vulnerabilities in international cooperation. The key efforts are described in the following paragraphs.
Asset recovery
India has managed to drive consensus among G20 members to make the recovery and return of proceeds of crime an anti-corruption policy objective. India has stressed that one of the important steps to achieve this objective is to conduct pre-MLA consultation proactively.
Under India’s presidency, G20 countries have also agreed to ensure the timely restraint, freezing or seizure of proceeds of crime to prevent their dissipation. They have further acknowledged that to meet this objective, they may require to provide their Financial Intelligence Units (FIUs) or other relevant authorities with the adequate authority, processes, and tools necessary to prevent the transfer or dissipation of assets suspected to be proceeds of crime. This is an important development, especially because innovations in internet technologies have enabled the fast movement of funds; LEAs can retrieve stolen funds only if they act in the ‘golden hour’.
Beneficial ownership information
As per one estimate, the total wealth held anonymously world over ranges between US$7 trillion and US$32 trillion, which is about 10% of global wealth. It is easy to hide wealth if jurisdictions do not require companies and trusts to disclose ownership and control.
FATF has paved the way for improving transparency through its standards on beneficial ownership, which were recently revised. While G20 countries have committed to timely and global implementation of the revised standards, they agreed on an important principle under the Indian presidency on mechanisms for maintaining and sharing beneficial ownership information. Such mechanisms include efficient cross-border sharing of beneficial ownership information through LEAs and FIUs cooperation.
Virtual Assets
In October 2022, a government engineer was raided by the Vigilance Department of Odisha in a corruption case. He was found to be in possession of cryptocurrencies valued at more than Rs. 1.75 Crores, and was subsequently arrested on the charge of possessing assets disproportionate to his sources of income. This case highlights the fast adoption of anonymity-enhancing virtual assets. The ability of blockchain-based systems to hide wealth in the form of virtual assets presents a new challenge in tracing and recovering proceeds of corruption.
Private wallets on blockchain-based systems are pseudonymous and present innumerable opportunities for layering and dissipation of funds. Value can be freely moved across borders through such wallets, or can be stored in physical cold wallets. They present an easy way for the corrupt to accept and transfer bribes.
In appreciation of the various risks associated with virtual assets, India has pushed in the G20 Finance Ministers and Central Bank Governors (FMCBG) track for development of a comprehensive global policy for regulation of virtual assets. This comprehensive policy will include elements of regulation relevant for maintaining financial integrity and for improving transparency in relation to virtual assets.
Pandey and Swain are Joint Secretary and Director in the Department of Revenue, Ministry of Finance, , respectively.

Mr. Ritvik Pandey, Mr. Smarak Swain