The Enforcement Directorate (ED) has informed a New Delhi court that Amnesty International UK allegedly routed more than Rs 51 crores to its Indian arm, in violation of legal guidelines, to “fund anti-national actions under the guise of export of companies”. Amnesty India and its former head Aakar Patel were penalised by the ED on Friday, for violating the Foreign Exchange Management Act (FEMA), citing violations of Rs 51 crores and Rs 10 crores, respectively.
Aakar Patel was prevented from boarding a flight to the USA earlier in April, at the Bengaluru airport. The former director of Amnesty India had tweeted that his name has been added to an exit control list. Patel said that a court order had allowed him to acquire his passport.
In a statement, the ED said that Amnesty International UK had been remitting significant foreign contributions through Indian entities (non-FCRA companies), in order to bypass the Foreign Contribution Regulation Act (FCRA), and expand its Indian operations. Reportedly, Amnesty International India Foundation Trust, and other trusts, had been denied registration or permission under the FCRA, by the Home Ministry.
As the funds received violated FEMA provisions, a show cause notice of penalty was issued by the ED, which has been upheld by its Adjudicating Authority. “The Adjudicating Authority of Directorate of Enforcement (ED) has adjudicated a Show Cause Notice issued to M/s Amnesty India International Pvt. Ltd.(AIIPL) and its CEO Shri Aakar Patel for contravention of the provisions of The Foreign Exchange Management Act, 1999 (FEMA) and imposed (a) penalty to the tune of Rs. 51.72 Crore and Rs 10 Crore respectively,” read a statement released by the ED.
The purpose of a show cause notice issued under FEMA is to declare that an investigation has been completed. In response, the ED seeks a penalty against the defendant. The matter is then forwarded to the Adjudicating Authority, which has the option of accepting or rejecting the request. High Courts have the power to challenge authority orders.
Amnesty India has since ceased operations. In a tweet on Friday, Aakar Patel said, “The ED is the govt, not the judiciary. We will fight it (again) and win (again) in court.”
According to the agency, the NGO had taken on 47 projects, out of which the 12 completed by the AIIPL for Amnesty International were designated as “Technical Services”. Apart from those, there were eight projects related to human rights awareness, six regarding Kashmir, six on the coal sector, four on “undertrial issues”, three on women’s concerns, three on “ready to report”, two on migrants’ issues, and two on the 1984 Sikh massacre.
A lookout circular issued by the CBI prevented Aakar Patel from flying to the US, months earlier. In December 2021, Patel and Amnesty International were accused of violating the FCRA. In the meantime, the ED has focused its investigation on violations of foreign exchange laws.
“ED had initiated an investigation under FEMA on the basis of information that Amnesty International, UK had been remitting the huge amount of foreign contribution through its Indian entities (non-FCRA companies) following FDI route, in order to evade Foreign Contribution Regulation Act (FCRA) to expand its NGO activities in India, despite the denial of prior registration or permissions to Amnesty International India Foundation Trust (AIIFT) and other trusts under FCRA by Ministry of Home Affairs,” read the statement.
Reportedly, three initiatives received the most funding. The Human Cost of Coal Research Project received USD 80,000 or Rs 71.5 lakhs, ‘Access for Justice’ in Kashmir received GBP 46,867 or Rs 44.5 lakhs, and ‘Mobile Developing and field testing technology’ received CHF 80,000 or Rs 64.8 lakhs.
According to the show cause notice, remittances received by the AIIPL and claimed as receipts for business/management consultancy and public relations services for export of services to foreign beneficiaries, between November 2013 and June 2018, constitute “the amount borrowed from an overseas remitter, thereby violating the FEMA provisions”.
“The Adjudicating Authority of ED has held that AIIPL is an umbrella entity under M/s. Amnesty International Ltd., UK, 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. All contentions and submissions 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,” read the ED statement.
The authority determined that Amnesty International violated the terms of Regulation 3 of the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000, by lending money to AIIPL to achieve its goals in India, to the tune of Rs 51.72 crores. “Accordingly, (a) penalty to the tune of Rs. 51.72 Crore on AIIPL and Rs. 10 Crore on Shri Aakar Patel have been imposed under the provisions of FEMA,” it informed.