Simplifying your business ideas, structures, functionalities, relations & operations
FEMA Articles, Video, PPT, Discussion, Expert Analysis
ED has seized Rs.5551.27 Cr. from M/s Xiaomi Technology India Private Limited for illegal remittances in violation of Section 4 of FEMA (Press release dated 29th April 2022)
RBI/2021-2022/161
FIDD.MSME & NFS.BC.No.16/06.02.31/2021-22
February 18, 2022
The Chairman/ Managing Director/Chief Executive Officer
All Commercial Banks
(including Small Finance Banks, Local Area Banks and Regional Rural Banks)
All Primary (Urban) Co-operative Banks/State Co-operative Banks/
District Central Co-operative Banks /All-India Financial Institutions/
All Non-Banking Financial Companies
Dear Sir/Madam,
New Definition of Micro, Small and Medium Enterprises – Clarification
Please refer to the circular FIDD.MSME & NFS.BC.No.12/06.02.31/2021-22 dated June 25, 2021 on ‘New Definition of Micro, Small and Medium Enterprises’.
2. In this connection, we inform that Government of India, vide their Gazette Notification S.O. 278(E) dated January 19, 2022, has notified amendments in the paragraph (7) sub-paragraph (3) in the notification of Government of India, Ministry of Micro, Small and Medium Enterprises number S.O. 2119 (E), dated June 26, 2020, published in the Gazette of India.
3. In view of the above amendment, paragraph 3 of the said circular would stand modified as under:
“The existing Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAMs) of the MSMEs obtained till June 30, 2020 shall remain valid till March 31, 2022.”
4. Further, it is clarified that the validity of documents obtained in terms of O.M. No.12(4)/ 2017-SME dated March 8, 2017 (RBI Circular FIDD.MSME & NFS.BC.No.10/06.02.31/2017-18 dated July 13, 2017), for classification of MSMEs upto June 30, 2020, are also valid upto March 31, 2022.
5. All other provisions of the circular remain unchanged.
Yours faithfully
(Sonali Sen Gupta)
Chief General Manager-in-Charge
The Reserve Bank of India (RBI) has noticed misleading advertisements of unauthorised Electronic Trading Platforms (ETPs) offering forex trading facilities to Indian residents, including on social media platforms, search engines, Over The Top (OTT) platforms, gaming apps and the like. There have also been reports of such ETPs engaging agents who personally contact gullible people to undertake forex trading/investment schemes and entice them with promises of disproportionate/exorbitant returns. Further, there have been reports of frauds committed by such unauthorised ETPs / portals and many residents losing money through such trading / schemes.
It is clarified that resident persons can undertake forex transactions only with authorised persons and for permitted purposes, in terms of the Foreign Exchange Management Act, 1999 (FEMA). While permitted forex transactions can be executed electronically, they should be undertaken only on ETPs authorised for the purpose by the RBI or on recognised stock exchanges (National Stock Exchange of India Ltd., BSE Ltd. and Metropolitan Stock Exchange of India Ltd.) as per the terms and conditions specified by the RBI from time to time. It is also clarified that remittances for margins to overseas exchanges / overseas counterparties are not permitted under the Liberalised Remittance Scheme (LRS) framed under the FEMA.
A list of authorised persons and authorised ETPs is available on the RBI website. A set of frequently asked questions (FAQs) on forex transactions has also been placed on the website for the general guidance of the public.
The RBI cautions the public not to undertake forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions. Resident persons undertaking forex transactions for purposes other than those permitted under the FEMA or on ETPs not authorised by the RBI shall render themselves liable for penal action under the FEMA.
(Yogesh Dayal)
Chief General Manager
Directorate of Enforcement is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws: –
1. Foreign Exchange Management Act,1999 (FEMA) – A Civil Law, with officers empowered to conduct investigations into suspected contraventions of the Foreign Exchange Laws and Regulations, adjudicate, contraventions, and impose penalties on those adjudged to have contravened the law.
2. Prevention of Money Laundering Act, 2002 (PMLA) – A Criminal Law, with the officers empowered to conduct investigations to trace assets derived out of the proceeds of crime, to provisionally attach/ confiscate the same, and to arrest and prosecute the offenders found to be involved in Money Laundering.
The Prevention of Money Laundering Act, 2002 [PMLA] mandates that the investigation of the offence of money laundering be linked to the Scheduled Offences investigated by the concerned Central or State Law Enforcement Agencies. The scheme of PMLA thus necessitates inter-agency coordination to take effective action against persons who are found by the Law Enforcement Agencies to be involved in criminal activity. Such action under PMLA entails attaching and confiscating tainted assets, and prosecuting persons/entities for the offence of money laundering.
Organization set up
The Directorate of Enforcement, with its Headquarters at New Delhi is headed by the Director of Enforcement. There are five Regional offices at Mumbai, Chennai, Chandigarh, Kolkata and Delhi headed by Special Directors of Enforcement.
Zonal Offices of the Directorate are at Ahmedabad, Bangalore, Chandigarh, Chennai, Kochi, Delhi, Panaji, Guwahati, Hyderabad, Jaipur, Jalandhar, Kolkata, Lucknow, Mumbai, Patna and Srinagar. These are headed by a Joint Director.
The Directorate has Sub-Zonal Offices at Bhubaneshwar, Kozhikode, Indore, Madurai, Nagpur, Allahabad, Raipur, Dehradun, Ranchi, Surat, Shimla, Vishakhapatnam and Jammu which are headed by a Deputy Director.
Functions
The main functions of the Directorate are as under
1.Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999(FEMA) which came into force with effect from 1.6.2000. Contraventions of FEMA are dealt with by way of adjudication by designated authorities of ED and penalties upto three times the sum involved can be imposed.
2.Investigate offences of money laundering under the provisions of Prevention of Money Laundering Act, 2002(PMLA) which came into force with effect from 1.7.2005 and to take actions of attachment and confiscation of property if the same is determined to be proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the persons involved in the offence of money laundering. There are 156 offences under 28 statutes which are Scheduled Offences under PMLA.
3.Adjudicate Show Cause Notices issued under the repealed Foreign Exchange Regulation Act, 1973 (FERA) upto 31.5.2002 for the alleged contraventions of the Act which may result in imposition of penalties. Pursue prosecutions launched under FERA in the concerned courts.
4.Processing cases of fugitive/s from India under Fugitive Economic Offenders Act, 2018. The objective of this Act is to provided for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian Courts and to preserve the sanctity of the rule of law in India.
5.Sponsor cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA) in regard to contraventions of FEMA.
6.Render cooperation to foreign countries in matters relating to money laundering and restitution of assets under the provisions of PMLA and to seek cooperation in such matters.
Enforcement Directorate has attached assets worth valued at Rs.36,72,47,752/- of Nishad K, MD and his associates in the case of Morris Coin Crypto Currency Case under the Prevention of Money Laundering Act ,2002 in a cheating case. The attached assets include balances in multiple bank accounts of Nishad K and his companies, immovable property including land of an associate close to Nishad K and INR equivalent of crypto currencies purchased out of the proceeds of crime by a close associate.
ED initiated money laundering investigation on the basis of the FIR registered by Kerala Police. Kerala Police has registered multiple FIRs in various districts such as Malappuram, Kannur and others. As per the FIRs, more than 900 investors were cheated to the tune of Rs 1200 crore.
The money laundering investigation carried out so far revealed that Nishad K through his various companies such as M/s Long Rich Global, M/s Long Rich Technologies and M/s Morris Trading Solutions collected deposit money from the investors in the guise of Initial Coin Offer for the launch of Morris Coin Crypto Currency. Investors were impressed by conducting promotional events in the presence of celebrities, introducing the investors to flashy websites by provision of e wallets to each investor via web-based applications. The amounts so collected by duping. the investors were siphoned through various companies operated by him and his associates.
The deposits taken from the general public were illegal and without any statutory permission from any regulatory agencies. This was a ponzy schemes & investors were lured with the promise of very high return.
The money obtained was used for the purchase immovable properties, for the purchase of various other Crypto currencies, for the purchase of luxury cars and for spending in luxury hotels and resorts. In this regard, the crypto currencies such as Ethereum (5.92387265), BTC (0.08267646), BNB (5.51232875), YFI (0.023062), VET (4284.4), ADA (226.479601), USDT (35.88576551) totally valued at INR 25,82,794 were found and all the above crypto currencies, purchased out of the proceeds of crime, were converted into INR and attached by the Enforcement Directorate.
In addition, a search action was conducted under Section 17 of the PMLA,2002 at 11 premises situated across various States such as Kerala, Karnataka, Tamilnadu and New Delhi resulting in identification of details worth of several Crore of immovable and other property details. The premises includes the residential and office premises of the entities that are related to Nishad K and his companies.
Further investigation is under progress.
MHA did not freeze bank accounts of Missionaries of Charity (MoC)
State Bank of India informed that Missionaries of Charity itself sent a request to SBI to freeze its accounts
Renewal application under FCRA for renewal of FCRA registration refused due to adverse inputs
No request / revision application has been received from Missionaries of Charity for review of refusal of renewal
The renewal application under Foreign Contribution Regulation Act (FCRA) for the renewal of FCRA registration of Missionaries of Charity (MoC) was refused on 25 Dec 2021 for not meeting the eligibility conditions under FCRA 2010 and Foreign Contribution Regulation Rules (FCRR) 2011. No request / revision application has been received from Missionaries of Charity (MoC) for review of this refusal of renewal.
Missionaries of Charity (MoC) was registered under FCRA vide Registration No 147120001 and its registration was valid up-to 31 Oct 2021. The validity was subsequently extended up-to 31 Dec 2021 along with other FCRA Associations whose renewal application were pending renewal.
However, while considering the MoC’s renewal application, some adverse inputs were noticed. In consideration of these inputs on record, the renewal application of MoC was not approved. The FCRA registration of MoC was valid up-to 31st December 2021. MHA did not freeze any accounts of MoC. State Bank of India has informed that MoC itself sent a request to SBI to freeze its accounts.
The details of foreign investment reported through routes of Foreign Direct Investment (FDI) inflow and Foreign Portfolio Investment (FPI) inflows (net) during the last five financial years are as under:
As shown in table above, despite COVID-19 pandemic, the country has shown growth both in FDI inflow and FPI inflows (net) during Financial Year 2020-21 as compared to previous Financial Year 2019-20.
This information was given by the Minister of State in the Ministry of Commerce and Industry, Shri Som Parkash, in a written reply in the Lok Sabha today.
Shri Piyush Goyal says India will be the next investment global hotspot
Under Prime Minister Modi, India attracted a record FDI during last seven years, each year breaking the previous record for 7 years in a row – Shri Piyush Goyal
“‘Why India?’ to ‘Why Not India!’, and today ‘We must be in India!’, – Global sentiment has changed”
“More success stories here than anywhere in the world today; come, be a part of the unfolding India story” – Minister’s message to the CII National Conference on MNCs
The Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal has said, as per a recent CII-Ernst & Young report, India will be the next investment global hotspot.
“We have the potential to attract an annual FDI in the range of $120- $160 billion by 2025. Last seven years we’ve seen a record FDI, each year breaking the previous record for 7 years in a row. And I do hope to see that continue looking at the major structural reforms, the fact that we have a proactive leader in Prime Minister Modi, willing to listen and willing to change with the changing times,” he said, addressing the 2nd edition of the CII National Conference on MNCs, 2021, through video conference today.
Shri Goyal said global sentiments have changed from ‘Why India?’ to ‘Why Not India!’, and today ‘We must be in India!’ “There are more success stories here than anywhere in the world today, 71 unicorns. Naukri Jobspeak Index for Oct’ 2021 reports a 43% growth in employment over the same month last year. Our Manufacturing PMI (is high) and Service PMI reached a decade high,” he said.
Shri Goyal said Government has introduced several key policy and business reforms for improving the investment climate. “The closest and most recent decision like the privatization of Air India which was successfully bid by the Tata group, the removal of that very, very unfortunate Retrospective Tax which has, I believe, cost us dear in terms of investment climate for many years, the kind of reforms in Mining, in the Coal sector, ones that we are hoping to do in Power, the huge Renewable Energy growth story in India, all of these things, I think, encourage us to look for a brighter future,” he said.
Shri Goyal said the National Single Window System (NSWS) has been launched to serve as a one-stop-shop for approvals and clearance needed by investors. “The portal hosts approvals across 18 Central departments and 9 States. Another 14 Central departments and 5 States will be added by December.”
Shri Goyal said India has all the right ingredients for the Multi-National Corporations (MNCs) and can help MNCs become more competitive at global level. “Diverse business landscape, rule of law & transparent systems, skilled workforce & low labour cost, no forced technology transfers.”
Encouraging the Indian MNCs to take ‘Brand India’ to the world and be ambassadors of India’s culture, quality and values, Shri Goyal said MNCs have been an integral part of India’s growth story and their contribution is immense.
“Whether it’s in terms of building highly skilled managerial talent, whether it’s building good business practices or good manufacturing practices in India, whether it’s the good Corporate Social Responsibility and such social initiatives that are taken up by many of our MNCs. Whether it’s skill development, I think, a huge contribution by the MNCs when it comes to skill development in India, and all of these have had a multiplier effect on the economy,” he said.
Shri Goyal stressed on promoting partnership between the Government and Industry. “This partnership is important more because in today’s time because it gives us ideas, it gives us thoughts, it gives us an opportunity to understand where you come from, what needs to be done and, I think, this partnership needs to be strengthened further as we go along.”
Quoting Prime Minister Modi, “Good and smart governance is needed to bring reforms. The world is a witness to how India is writing a new chapter of governance”, Shri Goyal invited entrepreneurs to be a part of the unfolding India story.
Ministry of Commerce & Industry, Press Release dated 12 Nov 2021
Shri Piyush Goyal says FDI in India growing rapidly over last few years
Commerce Minister invites South Korea to invest in Defence and Retail
“Plan to manufacture 5 billion vaccines next year”: Shri Piyush Goyal
India will witness one of the fastest growth rates across the world – Shri Goyal
The Minister for Commerce & Industry, Textiles, Consumer Affairs and Food & Public Distribution, Shri Piyush Goyal today said FDI in India has been growing rapidly over the last few years.
“We have today become an attractive and preferred destination for investments,” said Shri Piyush Goyal, while addressing the 4th edition of the India-Korea Business Partnership Forum organised by CII-KITA.
Shri Goyal invited South Korean entrepreneurs to invest in new sectors like Defence and Retail. “We need to complement our complementary strengths in Automobiles, Textiles, Food processing, Leather Products, Metals, Mining, Chemicals and also through some of our traditional sectors like Steel and look at new emerging opportunities in Defence, e-Commerce and Retail.”
Shri Goyal said the Prime Minister Shri Narendra Modi’s ‘Make in India’ initiative is complemented by Her Excellency President Moon’s ‘New Southern Policy’. “Many Korean companies have leveraged the opportunities that India has to offer to ‘Make in India’ for the world using the competitive and comparative advantages of skilled manpower, low cost manufacturing and the Government support that is provided for businesses in India.”
Shri Goyal said during the Covid19 pandemic India has demonstrated our resilience, our capacity to serve the world, our capabilities in terms of being a trusted partner for businesses around the world. “We are widely recognised today as the pharmacy of the world providing medicines and vaccines across continents,” Shri Goyal said. “We plan to manufacture 5 billion vaccines next year and ensure the safety and security of people across the world post-vaccination,” he added.
Shri Goyal said our economy is bouncing back and will possibly see one of the fastest growth rates across the world. “Our Exports are at an all-time high,… Both on the Manufacturing side and on Services our PMI is at all-time highs. We are leveraging our strengths to realise the goal of AatmaNirbhar Bharat, a self-confident and self-reliant India…”
Shri Goyal said the Government has taken several policy measures to support Industry and Services. “We have a very vibrant Production Linked Incentive programme in which many Korean companies have also participated. We have a National Single Window launched recently, a National Infrastructure Pipeline with projects worth over a trillion dollars providing opportunities for Infrastructure companies. We have reduced Corporation taxes to amongst the lowest in the world giving additional incentives to new investments, liberalized our Foreign Investment regime and many other measures to support the growth of the Indian economy,” he said, adding, “In the last four or five years India is home to about 70 Unicorns, nearly half of them only in the last year of the Covid pandemic.”
On 3rd October, 2021, the International Consortium of International Journalists (ICIJ) has come out with what is claimed to be a 2.94 terabyte data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories. The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.
The Government has taken note of these developments. The relevant investigative agencies would undertake investigation in these cases and appropriate action would be taken in such cases as per law. With a view to ensure effective investigation in these cases, the Government will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities. The Government of India is also part of an Inter-Governmental Group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks.
It may be noted that following earlier similar such leaks in the form of ICIJ, HSBC, Panama Papers and Paradise Papers, the Government has already enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with an aim to curb black money, or undisclosed foreign assets and income by imposing suitable tax and penalty on such income. Undisclosed credits of Rs. 20,352 crore approximately (status as on 15.09.2021) have been detected in the investigations carried out in the Panama and Paradise Papers.
Names of only a few Indians (legal entities as well as individuals) have appeared so far in the media. Even the ICIJ website (www.icij.org) has not yet released the names and other particulars of all the entities. The website of ICIJ suggests that information will be released in phases and structured data connected to the Pandora Papers investigation will be released only in the days to come on its Offshore Leaks Database.
Further, the Government has directed today that, investigations in cases of Pandora Papers leaks appearing in the media under the name ‘PANDORA PAPERS’ will be monitored through the Multi Agency Group, headed by the Chairman, CBDT, having representatives from CBDT, ED, RBI & FIU.
Business So Simple 