On Friday (July 8), the Enforcement Directorate (ED) issued a show-cause notice [pdf] to Amnesty India International Pvt. Ltd and its former CEO Aakar Patel for violating the Foreign Exchange Management Act (FEMA).
Besides, the central agency has also imposed a penalty of ₹51.72 crores and ₹10 crores on Amnesty India and Patel respectively. Reportedly, Amnesty International (UK) had received large sums of money through its FCRA non-compliant companies in India.
The Enforcement Directorate pointed out that foreign contributions were received as Foreign Direct Investment (FDI) to evade restrictions imposed by the Foreign Contribution Regulation Act (FCRA).
In a press release, it stated, “ED, had initiated investigation under FEMA on the basis of information that Amnesty International, UK had been remitting huge amount of foreign contribution through its Indian entities (non-FCRA companies) following FDI route, in order to evade Foreign Contribution Regulation Act (FCRA) to expand its NGO activities in India, despite of denial of prior registration or permissions to Amnesty International India Foundation Trust (AIIFT) and other trusts under FCRA by Ministry of Home Affairs, Govt. of India.”
FEMA penalty of Rs 51.72 cr and Rs 10 cr imposed against Amnesty India International Pvt Ltd, its former head Aakar Patel respectively: ED
— Press Trust of India (@PTI_News) July 8, 2022
The Enforcement Directorate stated that between November 2013 and June 2018, Amnesty India International received foreign funds under the Head of ‘Business/Management Consultancy’ and ‘Public Relation Services.’ These donations were described as foreign remittances received for export to services to circumvent FCRA guidelines.
“The Adjudicating Authority of ED has held that AIIPL is an umbrella entity under M/s. Amnesty International Ltd., UK, which was declared to be set up for the cause of social activities in India,” it stated.
ED further emphasised, “However, AIIPL has been involved in many activities which are not relevant to their declared commercial business, and circumventing model has been applied by them to route the foreign funds in the guise of business activities to escape FCRA scrutiny.”
“Consequently, it is held that the funds that have arrived in the hands of AIIPL through inward remittances to the tune of Rs 51,72,78,111.87 is nothing but the fund lent by Amnesty International to AIIPL to ensure its objectives in the territorial jurisdiction of India, which is not accordance with the provisions of Regulation 3 of Foreign Exchange Management Regulations, 2000,” the central agency concluded.
Aakar Patel stopped from leaving the country
Earlier in April, Aakar Patel was stopped from boarding a flight to the USA at the Bengaluru airport. The former Amnesty India chief had tweeted that he was put on an exit control list. Patel claimed that he had obtained his passport through a court order.
He added that a CBI officer informed him that he is on a Look Out Circular because of the case against Amnesty International India regarding the FCRA violations. He was later granted temporary relief by the Rouse Avenue Court in Delhi yesterday. And the CBI has stated that they would challenge the court order.
In February 2021, the Enforcement Directorate had attached movable properties of Amnesty International India worth Rs 17.66 crore in a money laundering case.
ED had found that after the cancellation of the FCRA license by the Indian government, Amnesty International India Foundation Trust and other Amnesty entities adopted ‘new methods’ to receive money from abroad.
