ED: Myanmar drug lords paid in fuel and groceries, not cash, via Mizoram

Drug syndicates in Myanmar that smuggle heroin and methamphetamine into India through Mizoram are being paid in goods rather than cash, the Enforcement Directorate (ED) has found, according to a report in The Times of India.

Instead of money, the Golden Triangle suppliers receive petrol, diesel, flour, edible oil, groceries, medicines, footwear and clothing from their Indian network, the agency said in an investigation report prepared after a week of searches at 38 locations across the North East.

How the barter works

According to the ED, the banking system is used only for the Indian leg of a deal. Drug money is turned into ordinary goods, bought on payments that look like normal trade backed by GST invoices. These goods are then sent to Mizoram's border towns and on into Myanmar.

"The cross-border leg moves as goods and leaves no money trail. In effect, fuel, flour and groceries have become currency in which Myanmar-based drug suppliers are paid," the agency was quoted as saying.

The money trail so far

• More than 1,400 "mule" bank accounts, mostly held by traders who bought and supplied these goods, have been frozen.
• Transactions involving goods worth over Rs 270 crore have been identified, and six people arrested.
• Hawala operators in Champhai handled the money, including about Rs 125 crore in cash received from Assam, Nagaland, West Bengal, Tripura and Delhi.
• A large share of the drug money reaching hawala accounts in Aizawl and Champhai came from Delhi, Kolkata and Mumbai, the ED said.

The route

The ED said precursor chemicals move from India to drug factories in Myanmar. The finished heroin, brown sugar and methamphetamine tablets are carried across the Tiau river at Zokhawthar, opposite Khawmawi in Myanmar, and staged at Champhai. From there they travel along the Champhai-Aizawl road and NH-06A to Aizawl and Vairengte, and then into Assam and the rest of India.

What next

The agency is now trying to identify the consignees in border towns, those who move the goods across, the recipients in Myanmar, and the petrol pumps, shops and suppliers paid the same way, along with the money exchangers who direct the accounts. It is also tracing and attaching more proceeds of crime.

The ED had earlier announced that it had frozen 1,424 accounts after coordinated searches in Mizoram and Manipur in three money-laundering cases linked to drug trafficking from Myanmar. The findings are part of an ongoing investigation and have not been tested in court.