Export Latest News Wheat

DGFT would send case to CBI to check if wheat exporters using back-dated LCs to get permits

DGFT would send case to CBI to check if wheat exporters using back-dated LCs to get permits.

DGFT would send the case to CBI to check if wheat exporters use back-dated LCs to get permits.

Monday, the Directorate General of Foreign Trade (DGFT) said it would look into sending cases to the Central Bureau of Investigation (CBI)/Economic Offence Wing (EOW) after taking action under the Foreign Trade (D&R) Act if wheat exporters are found to be using back-dated Letters of Credit (LCs) to get permits. It also made export permits for wheat go through a two-step approval process and checked all approved LCs in person.

On May 23, DGFT said it had been told that some shady exporters were trying to get RCs by submitting fake LCs with a date of issuance on or before May 13 that were backdated. But it also found that in these cases, the date of the message exchange between Indian and foreign banks and Swift messages was after May 13, when both should have been on or before the ban date.

Also Read | After the prohibition on wheat exports, the harvest is bitter for Indian farmers.

‘In cases where the LC date is on or before May 13, but the swift message/message exchange date between an Indian bank and a foreign bank is after May 13, regional authorities (RAs) may conduct a full investigation (if needed, with the help of outside experts). If these (messages) are found to be backdated, the exporter must be prosecuted immediately under the FT (D&R) Act, 1992. Such cases will be looked at more closely to see if they should be sent to law enforcement agencies like the EOW and CBI. In a notice, DGFT said, ‘If any banker is found to be involved in a case where ante-dating is proven, the proper legal steps will be taken.’

‘Sustain due diligence’

The DGFT has also asked all of its RAs to do their due diligence and follow all of the rules when issuing licences (in the form of contract registrations) to let wheat leave the country. The DGFT has also asked them to send all valid registration of contracts (RCs) to an official panel set up for the purpose after LCs have been checked in person. Two more director generals of DGFT will look over and approve all valid proposals sent by RAs, who were previously allowed to give exporters permits.

The agency in charge of overseeing international trade also said that all RAs will have to do ‘physical verification of all LCs, whether they are already approved or are in the process of being approved.’ If they need to, they can get help from a professional agency. DGFT said that validation/endorsement by recipient banks can be made sure while doing physical verification.

The trade notice was sent out because the government thinks that some exporters are applying for RCs with ‘incorrect documents,’ even though the RAs have to follow strict rules before giving out the permits. DGFT has told customs officials in the past that they should only let exporters ship if they have valid RCs from RAs. To keep people from abusing the system, manual documents were taken away from even digital RCs.

It has been reported by a news source that earlier DGFT had received export licences for 5.2 million tonnes (mt), of which a random check showed that 60% could be back-dated LCs. But many exporters said that the government should let real orders that came in before the ban goes through, even though LCs couldn’t be put in front of banks because they had already been paid in advance to buy wheat.

Also Read | India doesn’t have a shortage of wheat, export banned to stop ‘rampant’ sales of grain abroad.

On May 30, the weighted average price at mandis across India was 2,073 per quintal, and about 52,500 tonnes were brought in that day up until 7 p.m. Last Friday, the price went up from 2,079/quintal. Wheat cost 2,132 per quintal on the day that it couldn’t be sent abroad.

As of May 29, the government had bought wheat worth ₹37,192.07 crore from 18.46 million tonnes (mt) of farmers. The Food Ministry said that 17.50 lakh farmers received MSP.

About the author

AgriNews

Agri News India’s ultimate agricultural news portal is dedicated to providing the farming fraternity with the latest Agri and related sector news. We believe that the power of information can transform the farming sector.

Add Comment

Click here to post a comment

Knowledge Share

Agri Academy

Agri Mock test, MCQ Agri-Economics, for UPSC/UGC NET/ASRB NET/NABARD/SRF/JRF/KSET/SO/ Competitive Exams