CII against extension of Fera cases deadline

NEW DELHI: CII said on Monday the deadline for resolving old cases under the repealed Foreign Exchange Regulation Act should not be extended further and launching of criminal prosecution by the Enforcement Directorate should be restricted to cases where there was a genuine loss of forex.
CII said Foreign Exchange Management Act that replaced FERA provided that no court shall take cognizance of an offence under the repealed law and no adjudicating officer shall take notice of any contravention after the expiry of a period of two years from the date of commencement of the act.
In a representation to the government, CII has stated that launching criminal prosecution in all those cases where investigtion or adjudication was still pending was unwarranted and would reflect poorly on the trust and credibility of the government.
"Extending the deadline of May 31 and therefore keeping issues open would create uncertainity and instability in the business environment as most of the cases where such prosecution had been initiated related to procedural irregularities and did not result in any foreign exchange losses." Even where there was a loss of foreign exchange, CII pointed out, it was for most cases due to non-realisation of export proceeds, which was not a contravention under FEMA.
CII said that criminal action should not be commenced where there had not been even any adjudication on the show cause notice issued earlier.
It pointed out that it would be contrary to the spirit of the new legislation which provided for sufficient safeguards relating to national economic interests relating to foreign exchange transactions, but did not contemplate the launching of criminal action.
"The most important change brought about by FEMA is that violations under its provisions, unlike FERA, are not criminal offences and are of civil nature, making the penalties commensurate with the nature of offence."