31 FAQs clarify coordination between RBI and Enforcement Directorate in FEMA violations. Distinctions from PMLA attachments and adjudication process outlined.
Clarifying Regulatory and Enforcement Jurisdiction
A recent RBI-ED joint guidance document presents 31 FAQs to clarify the interplay between FEMA adjudication and Enforcement Directorate (ED) proceedings under the Prevention of Money Laundering Act (PMLA), 2002. The document delineates institutional roles: RBI and its designated officers handle adjudication of FEMA contraventions, including penalty imposition, while ED investigates potential money laundering links.
It emphasises that initiation of PMLA proceedings does not automatically imply FEMA violation, and vice versa. The compounding process for FEMA contraventions remains independent, though ED may attach funds during parallel investigations. Appeals against FEMA penalties lie before special directors (APPELLATE) and the High Court.
Legal practitioners must distinguish between regulatory non-compliance and predicate offences under PMLA. The guidance enhances procedural transparency and may influence defence strategies in cross-enforcement cases.
Citations
- Foreign Exchange Management Act, 1999
- Prevention of Money Laundering Act, 2002
