Page 48 - Banking Finance May 2022

ARTICLE

or Government servant, judge or Transfer of FC to other Registered or unregistered
employee of any Government persons
corporation, while visiting any
foreign country shall not accept a. Transfer of FC funds to another person who is not registered or has not
any foreign hospitality except with obtained prior permission to receive foreign contribution will not be
the prior permission of the Central permitted unless pre-approval of the Central Government is obtained.
Application for such pre-approval is to be made in Form FC 10.
Government in Form FC 2.
b. In such case, the transferor may apply for permission to transfer not more
b. Such permission is not necessary in
than 10% of the total value of FC received.
case of medical emergency.
However, even in case of such an c. Transfer of FC funds is permitted if the transferee is a registered organisation
emergency, the Central or has obtained prior permission under section 11.
Government is required to be Inspection & Seizure
intimated within sixty days of
a. The Central Government has been empowered, to inspect as well as seize
receiving hospitality.
the accounts and records if it has reason to believe that any provisions of
c. Meaning of Foreign Hospitality - this Act or any other law relating to foreign exchange has been contravened.
any offer, not being a purely casual
b. Central Government may seize and/or confiscate any article, currency or
one, made by a foreign source for
security in relation to which any provision of this Act has been contravened.
providing a person with the costs
c. The seized records and accounts are to be released if no proceedings are
of travel to any foreign country or
initiated within six months from the date of seizure.
territory or with free boarding,
lodging, transport or medical Penalty
treatment.
Sr. Nature of Offence Penalty Additional Fine
Restriction on Adminis- No.
1. False statement or Imprisonment ---
trative Expenses representation or up to 6 months
Every person, registered or having prior concealment of material and/or fine
permission, shall not, as far as possible, facts for obtaining registration
incur administrative expenses in excess or prior permission
of 50% of the FC received in that 2. Violating prohibitory orders Imprisonment Additional fine
financial year. Rule 5 lays down in respect of any articles or up to 3 years equivalent to
parameters as to what constitutes currency or security and/or fine market value of
administrative expenses. article or the
amount of currency
Speculative Activity or security in
Foreign contribution or any income respect of which
arising out of it shall not be used for prohibitory order is
speculative business. Rule 4 specifies passed.
the activities that will be treated as 3. Accepting or assisting in Imprisonment ---
speculative in nature. For example accepting FC in contravention up to 5 years
investment in mutual funds is not of this Act and/or fine
permitted. However, debt based secure 4. Any other failure not Imprisonment ---
investment shall not be treated as specifically dealt with in up to 1 year
speculative. the Act and/or fine

48 | 2022 | MAY | BANKING FINANCE