The Adjudicating Authority of the Enforcement Directorate (ED) has imposed a penalty of ₹51.72 crore on Amnesty India International Private Limited (AIIPL) and ₹10 crore on its former Chief Executive Officer Aakar Patel in connection with alleged violation of Foreign Exchange Management Act (FEMA) in 2019.
The ED’s inquiry was initiated on the basis of information that Amnesty International, United Kingdom, had been remitting “huge amounts of foreign contribution” through its Indian entities, not registered under the Foreign Contribution (Regulation) Act (FCRA), through the Foreign Direct Investment (FDI) route.
It was allegedly done to expand its non government organisation (NGO) activities in India despite the denial of prior registration or permissions to the Amnesty International India Foundation Trust (AIIFT) and other trusts under the FCRA by the Ministry of Home Affairs (MHA).
The showcause notice issued by the ED had said that between November 2013 and June 2018, the remittance which was received by the AIIPL – and claimed as receipt for business/management consultancy and public relation services for export of services to foreign beneficiary – was nothing but the amount borrowed from the overseas sender, thereby violating the FEMA provisions.
“After getting a detailed reply from the AIIPL and following the principal of natural justice, the Adjudicating Authority of ED has held that the AIIPL is an umbrella entity under Amnesty International Limited, UK, which was declared to be set up for the cause of social activities in India,” said the agency.
However, the agency alleged, the AIIPL was involved in many activities that were not relevant to its declared commercial business, and a circumventing model had been used to route the foreign funds under the guise of business activities to escape the FCRA scrutiny. “All contentions and submission 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.
As a result, more than ₹51.72 crore received by the AIIPL through inward remittances was “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 accordance with the provisions of Regulation 3 of the Foreign Exchange Management (borrowing and lending in Foreign Exchange) Regulations, 2000”.
The ED had earlier attached assets worth ₹19.54 crore in connection with a money laundering case involving the AIIPL, Indians for Amnesty International Trust (IAIT), AIIFT and the Amnesty International South Asia Foundation. The case is based on a first information report (FIR) registered by the Central Bureau of Investigation (CBI) alleging FCRA violation.
As alleged, the AIIFT was granted permission under the FCRA during 2011-12 for receiving foreign contributions from the Amnesty International, U.K. However, based on adverse inputs from security agencies, it was cancelled. Then, the IAIT and the AIIPL were formed in 2012-13 and 2013-14 to “escape the FCRA route and carried out NGO activities in the guise of service export and FDI”.
Responding to the development, Mr. Patel on Friday tweeted: “the ED is the govt not the judiciary. we will fight it (again) and win (again) in court.”
