5 Questions
What was the major difference in approach between the Foreign Exchange Regulation Act (FERA) and FEMA?
FERA prohibited everything unless specifically permitted, with drastic consequences and a presumption of guilt, while other laws generally permit everything unless specifically prohibited and presume innocence.
Explain the objective of the Foreign Exchange Management Act, 1999 (FEMA) and its significance in the Indian context.
The objective of FEMA is to facilitate external trade and payments, promote the orderly development of the foreign exchange market in India, and replace the incompatible Foreign Exchange Regulation Act (FERA) to align with pro-liberalization policies and the World Trade Organization framework.
How did the passing of FEMA impact the management of foreign exchange in India?
FEMA introduced a new foreign exchange management regime consistent with the World Trade Organization framework, replaced the incompatible FERA, and led to the introduction of the Prevention of Money Laundering Act, 2002.
What was the significance of the replacement of the Foreign Exchange Regulation Act (FERA) by FEMA?
The replacement aligned with pro-liberalization policies of the Government of India and enabled a new foreign exchange management regime consistent with the emerging framework of the World Trade Organization (WTO).
In what way did the tenor and tone of the Foreign Exchange Regulation Act (FERA) differ from other laws?
Under FERA, everything was prohibited unless specifically permitted, with severe consequences and a presumption of guilt, while other laws generally permit everything unless specifically prohibited and presume innocence.
Test your knowledge about the Foreign Exchange Management Act, 1999 (FEMA), an important legislation in India pertaining to foreign exchange regulation and trade facilitation.
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