The story so far: A day after the Enforcement Directorate (ED) imposed a fine of ₹51.72 crore on Amnesty India and ₹10 crore on its former CEO Aakar Patel in relation to an alleged violation of the Foreign Exchange Management Act (FEMA), the agency on Saturday, July 9, filed a chargesheet against Amnesty India and associated entities in a money laundering case.
This came soon after the Central Bureau of Investigation (CBI) received the government’s nod in April to prosecute Amnesty and Mr. Patel in a separate case for allegedly violating the Foreign Contribution Regulation Act (FCRA). This was preceded by Mr. Patel being stopped twice from leaving the country owing to a Look Out Circular (LOC) issued against him by the CBI in the FCRA case.
Amnesty India’s journey
In September 2020, the Indian arm of the United Kingdom-based human rights advocacy organisation Amnesty International announced that it was shutting down its India operations, laying off about 150 people, and ending its presence in the country, 55 years after it had set up its first office in India.
It said that the closure was owed to the “complete freezing of Amnesty International India’s bank accounts” by the Government of India which had brought “all the work being done by the organisation to a grinding halt”. The human rights group had called the government’s action a part of its “witch-hunt” of human rights organisations.
Before that in 2009, Amnesty India had announced shuttering of operations because the Centre had refused to accept the FCRA registration of its foundation, preventing it from receiving funds from its U.K. parent Amnesty International.
In 2015, author, columnist, and activist Aakar Patel had joined Amnesty International India as its Executive Director and held the post till 2019. In 2016, a sedition case was registered against Amnesty International India for “anti-India” slogans allegedly being chanted at its event where families from Kashmir where narrating their experiences. The case was closed in 2019.
At the time of shutting Indian operations in 2020, Amnesty India had said that the government’s crackdown was because of the group’s reports that year on alleged human rights violations in Jammu and Kashmir, and on what it called “police complicity” in the Delhi riots of February 2020.
What is the ED’s FEMA and FCRA case?
In October 2018, the ED raided Amnesty India’s Bengaluru office, suspectinga violation of FEMA rules. ). The ED’s raid took placeafter the Home Ministry sent a reference through its FCRA unit to the Department of Revenue, under which the ED functions.
The Ministry said that Amnesty International, UK, had been remitting “huge amounts of foreign contribution” through its Indian entities not registered under the FCRA), through the Foreign Direct Investment (FDI) route.
The FCRA regulates foreign donations and ensures that such contributions do not adversely affect internal security. The Act is applicable to all associations, groups and NGOs which intend to receive foreign donations. It is mandatory for all such NGOs to register themselves under the FCRA. Registered associations can receive foreign contribution for social, educational, religious, economic and cultural purposes.
According to the ED, in 2011-12, one of the units of Amnesty India- the Amnesty International India Foundation Trust (AIIFT)— was granted FCRA permission to receive foreign contributions of ₹1.69 crore from Amnesty International-UK. However, the permission for further contribution was subsequently revoked on the basis of “adverse inputs” received from security agencies.
The ED said in 2018 that after denial of permissions, Amnesty India “resorted to bypass the FCRA Act” by floating a commercial entity or private company in the name of Amnesty International India Pvt. Ltd (AIIPL) in 2012-13. The commercial route is used by companies to receive FDI which is governed by the FEMA, while foriegn contribution to NGOs is regulated under the FCRA.
The central agency claimed that AIIPL had then received foreign funds through the commercial route to the extent of ₹36 crore from Amnesty International UK. It was alleged that the company, in violation of the FCRA rules, was misusing the foreign funds for NGO-related activities such as website maintenance, mobile technology for human rights, Kashmir-related activities, justice for the 1984 Sikh massacre, corporate accountability,the rights of Adivasis in coal areas, and women’s issues.
According to the ED, ₹10 crore was in the form of a long-term loan. Under regulation 3 of FEMA rules, 2000, borrowing and lending of foreign exchange is prohibited unless done in ways approved in the Act such as convertible debenture or equity shares. The agency claimed that the ₹10 crore was immediately placed in a fixed deposit (FD) and in another Indian entity called Indians for Amnesty International Trust (IAIT), which then established an overdraft facility for ₹14.25 crore keeping ₹10.00 crore FD as collateral which according to the ED, meant the receipt of FDI by trust only.
The ED said that the remaining ₹26 crore, was received in two AIIPL accounts as payment for offering "consultancy services” to the foreign beneficiary, However, the agency said that the company failed to furnish any documentary proof about these services.
The ED had subsequently served a show-cause notice to Amnesty International India and Aakar Patel for the alleged FEMA violation involving a total of ₹51.72 crore (including the overdraft facility). On July 8 this year, the ED’s Adjudicating Authority imposed a penalties on AIIPL Mr. Patel.
What is the FCRA case registered by the CBI?
In 2019, on a similar complaint received by the Home Ministry, the CBI registered an FIR under the FCRA. Among those named as accused were AIIPL through its directors (including Mr. Patel); IAIT through its office-bearers; AIIFT through its office-bearers; and Amnesty International South Asia Foundation (AISAF) through its directors and others.
The CBI in 2019 conducted raids at three locations in Bengaluru and Delhi on the premises ofAmnesty International India and Indians for Amnesty International Trust (IAIT).
While the ED’s case was about alleged FEMA violations, the CBI’s case included the same findings as ED but focused on the alleged circumvention of FCRA rules by Amnesty India to receive funds through the FDI route to further its NGO-related work, after denial of required FCRA permissions.
The CBI had filed its chargesheet on December 31, 2021 in at the Rouse Avenue Court in Delhi; and received the government’s approval to prosecute the organisation in April this year.
After filing the chargesheet, the CBI issued a Look-Out Circular against Mr. Patel, based on which he was stopped by the immigration officials at the Bengaluru airport while on his way to the United States. A city court ordered withdrawal of the circular. However, this was overturned by a Special Judge, who directed Mr. Patel to not leave the country without the court’s permission.
What is the ED’s PMLA case?
On July 9, the EDfiled a prosecution complaint (charge sheet) against AIIPL, IAIT and others in a money laundering case. Notably this case is another one based on the same original findings but has invoked a different Act- the Prevention of Money Laundering Act (PMLA).
The chargesheet in the case has been filed in the court of Principal City Civil and Sessions Judge, Bengaluru City. The case is based on the CBI’s FIR in the FCRA case.
According to an official’s statement to The Hindu, “Amnesty International India Private Limited and others have committed scheduled offences by claiming to be carrying out ‘civil society work’, but receiving forex in a profit-making company, thereby misutilising the FDI.” The official added that remittances received by AIIPL were layered into IAIT, which was a charitable trust.
The ED had earlier attached movable properties worth ₹19.54 crore associated with Amnesty India.
What has been Amnesty India’s stand?
Amnesty India, which still advocates for issues in India through its press releases and social media, had said at the time of shutting Indian offices in 2020 that it had fully complied with the Indian and international laws.
The organisation has said that for its work in India, it raised funds domestically and around 1 lakh Indians had contributed financially in the eight years leading up to 2020 .
“These contributions evidently cannot have any relation with the Foreign Contribution (Regulation) Act, 2010. The fact that the Government is now portraying this lawful fundraising model as money-laundering is evidence that the overbroad legal framework is maliciously activated when human rights activists and groups challenge the government’s grave inactions and excesses,” it said in a statement.
Responding to the recent filing of the ED’s chargesheet in the PMLA case, Amnesty India on Saturday tweeted: "We reiterate that the allegations of @dir_ed, a financial investigation agency under @FinMinIndia, that Amnesty International India was involved in ‘money laundering’, are patently untrue."
Meanwhile, Aakar Patel, in response to the ED’s penalty on Friday tweeted, through an unverified handle: “the ED is the govt not the judiciary. we will fight it (again) and win (again) in court.”
