Fema a civil law, RBI alone can compound offences, says ED

ED reiterated that FEMA is primarily civil legislation and RBI is the competent authority to compound eligible contraventions.

ED issues a no-objection certificate to RBI for compounding of offenses under FEMA.

RBI closed a FEMA case against Apothecon Pharmaceuticals after the firm paid a Rs 40 lakh penalty for delay in reporting foreign inward remittances and issuing equities without government approval.

RBI issued master directions on compounding, prescribing a compounding matrix based on nature, gravity, duration, and amount involved in the contravention.

Once RBI compounds the contraventions, ED drops proceedings and closes the investigation.