Fera-Fema switch may get six more months

The Finance Ministry plans to extend the sunset period—the switchover phase from FERA to FEMA—by another six months to allow time ...

The Finance Ministry plans to extend the sunset period—the switchover phase from FERA to FEMA—by another six months to allow time for clearance of a large backlog of cases which has jumped up following numerous references from the Reserve Bank of India.

In the last one year, the apex bank has sent to the Enforcement Directorate about 15,000 foreign exchange violations for booking under the existing Foreign Exchange Regulation Act (FERA) before the current deadline expires on May 31. Of this, around 9,000 pertain to Delhi alone.

Under Section 49 of Foreign Exchange Management Act (FEMA) of 1999, showcause notice should be issued in all FERA cases and complaint filed in the court within the sunset period of two years starting June 1, 2000 or else, these cases would lapse.

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Sources said the Department of Economic Affairs has received the proposal from the Department of Revenue for a concurrence before the proposed amendment is sent to the Cabinet for approval.

‘‘The sunset clause is being extended by another six months as pending cases could not be cleared,’’ said a senior government official.

The amendment to FEMA—enacted on June 1, 2000—is likely to be promulgated through a presidential ordinance as it would miss the Budget session, he added. The extended deadline would give breathing space to the Directorate which is issuing showcause notices to as many as 100 offenders in a day. The agency would also get the leeway to book offenders under criminal liability with power to arrest.

Sources in the Directorate said among the cases awaiting scrutiny and filing is one pertaining to First Global owner Shankar Sharma, a shareholder in Tehelka. Two cases against Sharma have already been filed.

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The waiting list also includes MESCO owner Rita Singh and a liquor multinational, they added.

European Commission President Ursula von der Leyen and European Council President Antonio Costa during their call with Prime Minister Narendra Modi Thursday. (Image source: X@eucopresident)

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