FEMA&

MONEY LAUNDERING

FOREIGN

EXCHANGE

MANAGEMENT

ACT (1999)

FERA WAS REPLACED BY FEMA in 1999

FEMA

HOW IS IT DIFFERENT ?

1. Simple & consists of only 49 sections.

2. Introduction of terms like

Capital Account Transaction,

Current Account Transaction.

3. Offence is now considered as a civil offence.

4. Penalty-‘3’ times the amount involved.

5. IMPRISONMENT only when one fails to pay the

penalty.

FEMA

PRIME OBJECTIVES

1. To facilitate external trade and payments.

2. To promote the orderly development and maintenance of foreign exchange market.

FEMA

RULES & REGULATIONS

1) Vital role of RBI in administration of FEMA.

2) Rules, regulations & Norms laid down by RBI in consultation with the Central

Government.

3) The Act prohibits any person who-

a) Deal in or transfer any foreign exchange or foreign security to any person not

being an authorized person.

b) Make any payment to or for the credit of any person resident outside India in

any manner.

c) Receive otherwise through an authorized person, any payment by order or on

behalf of any person resident outside India in any manner

FEMA

BABA RAMDEV !!

• Case was filed against baba Ramdev trust on the basis of

a RBI report.

• According to the report , ED officials have found alleged

FEMA violations amounting to around Rs.7-8 crore.

FEMA VIOLATION

Patanjali Yogpeeth Trust exported Ayurvedic medicines and

other products but did not inform the RBI about the money they were

supposed to receive in exchange.

Enforcement directorate also got in touch with the Punjab National Bank,

which runs the trust's account.

Suspicious purchase of an island in Scotland, which the yoga guru claims

was "gifted" to him by an NRI couple.

Agency requested UK authorities to furnish details on funding related

aspects of the island

ED also looks into the flow of money into different trusts run by Ramdev

and his aides.

US, New Zealand and Britain in contravention of FEMA guidelines.

MONEY LAUNDERING

MONEY LAUNDERING HAWALA

MONEY LAUNDERING

1. Definition

2. Act (2009)

3. Penalty

HOW DO THEY DO IT ?

Low profile

Main business + M L

Over shore account

Delivery of Goods

Fool proof Coding & Decoding

FEMA VIOLATION BY IAS COUPLE !

DATED JAN 13 ,2015Tainted IAS couples - Tinoo Joshi and Arvind Joshi

What actually happened ?!!

Owned properties exceeding 3151% of their known source of income.

Income tax department unearthed Disproportionate assets valued at Rs 360 crore.

FEMA violation : Income tax appraisal and final assessment report,

the names of Arvind Joshi's two sisters — Abha and Vibha Patel —

settled in the US and UK also figured

Of the properties revealed during raid included 402 acres of

agricultural land valued at several hundred crores in Bhopal

Enforcement Directorate (ED) had registered a complaint under

Prevention of Money Laundering Act (PMLA) against Joshi couple

under FEMA because it is illegal for NRIs to own agricultural land

HASAN ALI KHAN

THE BILLION DOLLAR BANDICOOT

FROM SCRAPS TO SWISS BANK

Entrepreneur with annual income of 30 lakh.

US $8 billion stacked away in UBS Zurich, Switzerland

RS.50,000 crore ED imposed on him as tax.

Name linked to worlds biggest arms dealer Adnan

Khashoggi.

Total income from 2001-2008 1trillion rupees.

Currently in jail pending trial.

MONEY LAUNDERING

PHASES

Placement

Layering

Integration

THE 2G SCAM

LAYERING TO INTEGRATION

The ED has also named Swan Telecom Pvt Ltd, Kusegaon Realty Pvt Ltd

(formerly known as Kusegaon Fruits and Vegetables Pvt Ltd), Cineyug

Media and Entertainment Pvt Ltd (formerly known as Cineyug Films Pvt Ltd),

Kalaignar TV Pvt Ltd, Dynamix Realty, Eversmile Construction Company Pvt

Ltd, Conwood Constructions and Developers (P) Ltd, DB Realty Ltd and

Nihar Constructions Pvt Ltd as accused in the case.

The licenses were being sold below their market value.

Swan Telecom bought a license for Rs. 1537 crore. Sold 45% of the

company to Etisalat for Rs. 4200 crore.

Unitech Group, purchased a license for Rs. 1661 crore and the

company board soon after sold a 60% stake for Rs. 6200 crore to

Telenor.

Nine companies purchased licenses and collectively paid Rs.

10,772 crore. The amount of money expected for this licensing by

the Comptroller and Auditor General of India was 1,76,700 crore.

THANK YOU !

Thank You