The Enforcement Directorate (ED) has issued a showcause notice to Amnesty India and its CEO Aakar Patel for alleged violation of the provisions of the Foreign Exchange Management Act,1999 (FEMA) and imposed a penalty of Rs 51.72 crore and Rs 10 crore respectively.

The ED had initiated an investigation into the Amnesty India on the basis of information that the Amnesty International, UK had been remitting huge amounts of foreign contributions through its Indian entities (non-FCRA companies) through the FDI route, in order to evade the Foreign Contribution Regulation Act (FCRA) to expand its NGO activities in India.

The activities were allegedly being carried out despite denial of prior registration or permission to Amnesty International India Foundation Trust (AIIFT) and other trusts under FCRA by the Ministry of Home Affairs.

“The showcause notice issued by ED had charged that during the period between November 2013 and June 2018, the remittance that was received by AIIPL and claimed as a receipt for Business and Management Consultancy and Public Relation Services for export of services to the foreign beneficiary is nothing but the amount borrowed from overseas remitter, thereby violating the FEMA provisions,” an ED statement said.

After getting a detailed reply from the AIIPL and following the principle of natural justice, the Adjudicating Authority of the ED held that the AIIPL is an umbrella entity under the Amnesty International Ltd, UK, which was declared to be set up for the cause of social activities in India.

However, the statement said, the AIIPL has been involved in many activities which are not relevant to their declared commercial business, and a circumventing model has been applied by them to route the foreign funds in the guise of business activities to escape FCRA scrutiny.

“All contentions and submissions from the AIIPL regarding the claim of the remittance towards the export of services to Amnesty International have been dismissed, in the absence of concrete evidence,” it said.

Consequently, it was stated that funds that landed in the hands of the AIIPL through inward remittances to the tune of Rs 51,72,78,111.87 are nothing but the fund lent by the Amnesty International to the AIIPL to ensure its objectives in the territorial jurisdiction of India, which is not in accordance with the provisions of Regulation of Foreign Exchange Management (borrowing and lending in Foreign Exchange) Regulations, 2000.

Accordingly, penalties to the tune of Rs 51.72 crore on the AIIPL and Rs 10 crore on Aakar Patel have been imposed under the provisions of the FEMA.