Worried about the fact that many companies are increasingly storing information and business-related data on servers abroad — creating problems for investigating agencies like the CBI, Enforcement Directorate and SFIO — the Central Economic Intelligence Bureau (CEIB), a department under the finance ministry, is looking for ways to address the problem.

According to official sources, the ministry has constituted a working group to study the feasibility of accessing data from servers located outside the country. The working group, which has representations from the information technology department and the corporate affairs ministry among others, will study the magnitude of the problem being faced and the legal remedies available. “Many people are forming companies in such a way that all data — including confidential information like money invested through participatory notes — is stored in cyber space linked to servers abroad. When we try to seize the information, companies claim that we can’t access it as it is located outside the country and not with them,” the sources said.

Sources said firms usually store their data on servers abroad to evade tax or if they are involved in some illegal activities. The money involved may have terrorism links or it may be laundered. The move is to track businesses which are keeping data outside the country and see if the money involved is being used for illegal activities.

Switzerland also faced the same problem two years ago. However, the Swiss Federal Finance Administration issued a circular in 2007 stating that if a company retains its relevant records electronically in servers abroad, it must either keep them on a server located in Switzerland or maintain an up-to-date electronic copy or hard copy of the records in Switzerland. According to the circular, the copy should be updated at least on a monthly basis.

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