After reading the lesson, you will be able to know about the:
The brief outline of Fema
The brief outline of Trade and Copyrights Act
Today, we will discuss the two Acts as outlined above in brief
just to give you an idea as to the purpose of these Acts and the
brief introduction of these Acts.
Let us first talk about FEMA
FEMA (Foreign Exchange Management
The Foreign Exchange Management Act (FEMA) is a law to
replace the draconian Foreign Exchange Regulation Act, 1973.
Any offense under FERA was a criminal offense liable to
imprisonment, whereas FEMA seeks to make offenses relating
to foreign exchange civil offenses. Unlike other laws where
everything is permitted unless specifically prohibited, under
FERA nothing was permitted unless specifically permitted.
Hence the tenor and tone of the Act was very drastic. It
provided for imprisonment of even a very minor offense.
Under FERA, a person was presumed guilty unless he proved
himself innocent whereas under other laws, a person is
presumed innocent unless he is proven guilty.
With liberalization, a need was felt to remove the drastic
measures of FERA and replace them by a set of liberal foreign
exchange management regulations. Therefore FEMA was
enacted to replace FERA.
FEMA extends to the whole of India. It applies to all branches,
offices and agencies outside India owned or controlled by a
person resident in India and also to any contravention there
under committed outside India by any person to whom this
FEMA contains definitions of certain terms, which have been
used throughout the Act. The meaning of these terms may
differ under other laws or under common language. But for the
purposes of FEMA, the terms will signify the meaning as
defined there under. Let us take up some of the more impor-
“Authorized person” means an authorized dealer, money
changer, off-shore banking unit or any other person for the
time being authorized to deal in foreign exchange or foreign
“Capital Account Transaction” means a transaction which alters
the assets or liabilities, including contingent liabilities, outside
India of persons resident in India or assets or liabilities in India
of persons resident outside India, and includes transactions by
way of giving guarantees or surety for any debt, obligation or
other liability of (1) a person resident outside India or (2) of a
person resident in India and owed to a person resident outside
“Currency” includes all currency notes, postal notes, postal
orders, money orders, cheques, drafts, travelers cheques, letters
of credit, bills of exchange and promissory notes, credit cards or
such other similar instruments, as may be notified by the
“Currency Notes” means and includes cash in the form of coins
and bank notes;
“Current Account Transaction” means a transaction other than a
capital account transaction and includes :-i.
Payments due in
connection with foreign trade, other current business,