INDIA Law and Practice Contributed by: Ayush Mehrotra, Upkar Agrawal and Varsha Goel, Khaitan and Co
2.3 Licensing 2.3.1 Derogation
2.4 Reporting Reporting obligations in India are extensive and apply to a wide range of institutions and individuals. The principal obligations are outlined as under: Financial Institutions Banks, stock exchanges, depositories, intermediar - ies, insurance companies and other regulated entities must maintain updated lists of designated terrorists and organisations as notified under the UAPA and UNSCA Orders. These entities must screen custom - ers and transactions against the consolidated list of designated persons and verify whether designated individuals or entities hold funds, assets or economic resources. Where a match is identified, it must be reported immediately to FIU-IND, the designated UAPA Nodal Officers and the relevant sectoral regu - lator (RBI, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, etc). If a match is confirmed, the entity must prevent further financial transactions and inform the central nodal officer. No prior court order is required for freezing. Foreign Exchange and Cross-Border Reporting The RBI mandates comprehensive monitoring of foreign exchange transactions, requiring authorised dealers to report cross-border remittances and capi - tal movements under FEMA. All liberalised remittance scheme (LRS) transactions require purpose code declaration and are subject to monitoring for poten - tial sanctions nexus. Customs and export violations prompt mandatory disclosures during investigations. Other Reporting Requirements • Registrars of immovable property must report hold - ings of designated individuals and entities to the relevant authorities. • Designated non-financial businesses and profes - sions (including real estate agents, dealers in pre - cious metals and stones and certain professionals) must also comply with reporting obligations under the PMLA framework. • VDA service providers registered under the PMLA must report suspicious transactions and main - tain records of all transactions above prescribed thresholds.
The licences and authorisations are issued for spe - cific circumstances under the respective statutes, as follows. UNSC Act UNSCA Orders provide carve-outs permitting expend - iture on necessities (food, rent, medicines, taxes and utilities), reasonable legal fees and extraordinary exceptional expenses. The government must notify the UNSC to access these limited exceptions. UAPA Similar to UNSCA Orders, limited access is authorised for essential living costs (food, rent, medicines, taxes and utilities), reasonable legal fees and extraordinary exceptional expenses, in line with UNSC Resolution 1452 (2002). This is subject to notification to the MEA, with access granted unless a negative decision is made within 48 hours. These provisions ensure that designated persons are not deprived of necessities. FTDR Act While import/export of goods or services that are completely prohibited are not subject to any licens - ing exception, import of certain restricted goods may be permitted on prior approval from the DGFT. Further, export authorisations for SCOMET items are issued upon verified compliance with end-use requirements, through a rigorous inter-ministerial review process. 2.3.2 Provision of Legal Services The right to legal representation is a fundamental right. As such, all designated individuals and legal persons who are Indian nationals are entitled to access legal services in India without restriction. For designated individuals or entities who are not Indian nationals, the UNSCA Orders and the UAPA Orders carve out an exception permitting the use of funds, financial assets and economic resources for reasonable professional fees and reimbursement of expenses associated with legal services. This excep - tion is subject to appropriate notification to the gov - ernment and the absence of a negative decision by the government upon such notification.
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