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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

An Authorised Officer suspects that Meera, resident in India, holds undisclosed foreign securities abroad in contravention of Section 4. Under Section 37A, what may he do, after recording reasons in writing, provided the prescribed value threshold is met?

He may seize value equivalent, situated within India, of the suspected foreign securities. Section 37A(1) permits this after he records reasons in writing, and only where the aggregate value of the foreign assets is not below the prescribed value.

  1. ASeize the foreign securities directly from the overseas custodian
  2. BSeize value equivalent situated within IndiaCorrect
  3. CCancel Meera's residential status
  4. DProsecute her before the Appellate Tribunal immediately

Explanation

Section 37A(1) lets the Authorised Officer, after recording reasons in writing, seize value equivalent, situated within India, of the suspected foreign asset. The seizure is of an equivalent in India, not the overseas asset itself, so seizing from the overseas custodian is wrong.

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