The Enforcement Directorate (ED) has slapped a combined penalty of nearly Rs 62 crore against Amnesty India and its former head Aakar Patel for contravention of the Foreign Exchange Management Act (FEMA).
Earlier, the ED issued show-cause notices to Amnesty India International Pvt. Ltd (AIIPL) for an impending penalty under FEMA of Rs 51.72 crore and a fine amount of Rs 10 crore against Patel.
The penalty order has been issued on completion of the probe by the adjudicating authority of FEMA, a special director rank officer of the ED.
The agency on Friday alleged that London-based Amnesty International sent a huge amount of foreign contributions to its Indian entities (AIIPL), from November 2013 to June 2018, “in the guise of business activities” to escape FCRA (Foreign Contribution Regulation Act) scrutiny”.
The agency said it initiated a FEMA probe on the basis of information that Amnesty International, UK had been remitting a “huge amount” of foreign contribution through its Indian entities (non-FCRA companies) following the FDI (foreign direct investment) route, in order to evade FCRA to expand its NGO activities in India.
This was sent, it said, despite the “denial” of prior registration or permissions to Amnesty International India Foundation Trust (AIIFT) and other trusts under the FCRA by the Ministry of Home Affairs (MHA).
“During the period between November 2013-June 2018, remittance which was received by AIIPL and claimed as a receipt for business/management consultancy and public relation services for export of services to the foreign beneficiary is nothing but amount borrowed from overseas remitter, thereby violating the FEMA provisions,” it said.
The adjudicating authority, after getting detailed reply from AIIPL and following principles of natural justice, held that “AIIPL is an umbrella entity under Amnesty International Ltd., UK, which was declared to be set up for the cause of social activities in India”.
“However, 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,” the statement said.
All contentions and submission 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, the ED said.
“Consequently, it is held that the funds that have arrived to 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 in accordance with the provisions of Regulation 3 of Foreign Exchange Management (borrowing and lending in foreign exchange) Regulations, 2000,” the agency added.