Hyderabad: The Enforcement Directorate (ED) has issued a show cause notice to Amnesty India International Pvt. Ltd. and its CEO Aakar Patel under the Foreign Exchange Management Act 1999 (FEMA) and imposed penalties to the tune of Rs. 51.72 crores and Rs. 10 crores, respectively.
ED initiated an investigation under FEMA based on information that Amnesty International, UK, was remitting huge amounts of foreign contributions through its Indian entities (non-FCRA companies) following the FDI route in order to evade the Foreign Contribution Regulation Act (FCRA) to expand its NGO activities in India despite the denial of prior registration or permissions to Amnesty International India Foundation Trust (AIIFT) and other trusts under FCRA by the ministry of Home Affairs.
The show cause notice states that remittance received by AIIPL between November 2013 and June 2018 and claimed as receipt for business/management consultancy and public relations services for export of services to a foreign beneficiary is nothing but the amount borrowed from overseas remitter which is in violation of FEMA provisions.
After getting a detailed reply from AIIPL and following the principle of natural justice, the adjudicating authority of ED held that AIIPL is an umbrella entity under Amnesty International Ltd., UK, that was set up for social activities in India.
"AIIPL is involved in many activities that are not relevant to their declared commercial business, and circumventing model has been applied by them to route foreign funds in the guise of business activities to escape FCRA scrutiny," the ED said.
All contentions and submissions from AIIPL regarding the claim of the remittance towards the export of services to Amnesty International have been dismissed in the absence of concrete evidence.
Consequently, it is held that the funds given to AIIPL through inward remittances to the tune of Rs. 51.72 crores are nothing but funds lent by Amnesty International to AIIPL to ensure its objectives in India which is not in accordance with the provisions of Regulation 3 of the Foreign Exchange Management (borrowing and lending in Foreign Exchange) Regulations 2000.
Accordingly, penalty to the tune of Rs. 51.72 crores against AIIPL and Rs. 10 crores against Aakar Patel were imposed under the provisions of FEMA.