Question

Which one of the following statements is correct with reference to FEMA in India?

• A. The Foreign Exchange Regulating Act (FERA) was replaced by Foreign Exchange Management Act (FEMA) in the year $2001$.
• B. FERA was given a sunset clause of one year till $31st$ May, $2002$ to enable enforcement directorate to complete the inrenttigation of pending issues.
• C. Under FEMA, violation of foreign exchange rules has ceased to be a criminal offence.
• D. As per the new dispensation, Enforcement Directorate can arrest and prosecute the people for violation of foreign exchange rule.

Answer 1

The correct option is C Under FEMA, violation of foreign exchange rules has ceased to be a criminal offence.

Foreign Exchange Regulation Act (FERA) was replaced by the much milder Foreign Exchange Management Act (FEMA). Under FEMA, violation of foreign exchange rules has ceased to be a criminal offence and would now be treated as a civil offence and the Enforcement Directorate would no longer have the power to arrest persons for such offences.