Question: What is Section 10(5) of The Foreign Exchange Management Act (FEMA), 1999?
Answer: An authorised person shall, before undertaking any transaction in foreign exchange on behalf of any person, require that person to make such declaration and to give such information as will reasonably satisfy him that the transaction will not involve, and is not designed for the purpose of any contravention or evasion of the provisions of this Act or of any rule, regulation, notification, direction or order made thereunder, and where the said person refuses to comply with any such requirement or makes only unsatisfactory compliance therewith, the authorised person shall refuse in writing to undertake the transaction and shall, if he has reason to believe that any such contravention or evasion as aforesaid is contemplated by the person, report the matter to the Reserve Bank.
Declaration Sample (under section 10(5) of the Foreign Exchange Management Act (FEMA), 1999
I / We hereby declare that the transaction/s, the details of which are specifically mentioned in the schedule hereunder does not involve and is not designed for the purpose of any contravention or evasion of the provisions of the aforesaid Act or any rule, regulation, notification, direction or order made there under.
I/ We also hereby agree and undertake to give such information / documents before the Bank undertake the transaction/s and as may be required from time to time that will reasonably satisfy Bank about the transaction/s in terms of the above declaration.
I/We also understand that if/ we refuse to comply with any such requirement or make unsatisfactory compliance herewith, the Bank shall refuse in writing to undertake the transactions and shall if it has reason to believe that any contravention / evasion is contemplated by me / us, report the matter to Reserve Bank of India.
I/We further declare that the undersigned has / have the authority to give this declaration and undertaking on behalf of the firm/ company/ organization.
Place:
Signature:
Date:
Name:
Rubber Seal:
SCHEDULE -
Nature / Purpose of Foreign Exchange Transactions:
Amount of Foreign Exchange :
Name of beneficiary entity:
