FEMA enforcement typically follows contraventions of FEMA provisions on foreign exchange transactions — unauthorised overseas remittances, FEMA-impermissible investments, undisclosed foreign assets, and round-tripping. The ED issues a Show Cause Notice under Section 16 FEMA. Where established, the Adjudicating Authority can impose a penalty and direct seizure of foreign exchange. Appeals go to the ATFE and then to the High Court.
PMLA enforcement is more aggressive — the bail provisions of Section 45 PMLA make pre-trial detention for months a realistic risk. Where the ED has registered an ECIR for money laundering connected to a FEMA violation, securities fraud, or any of 30+ PMLA Schedule offences, the accused must demonstrate both that they are not guilty and will not commit a money laundering offence on bail. GP defends PMLA matters from the ECIR stage through the Special Court trial.
Advisory from the moment of first ED contact — summons for documents or statement under FEMA Section 37 or PMLA Section 50. Statements made to the ED under Section 50 PMLA are admissible as evidence and can be treated as confessions — preparation is as important as trial preparation. GP advises on response obligations, legal representation rights, document production scope, and statement preparation.
Preparation of the reply to an ED Show Cause Notice under FEMA Section 16 — identifying factual errors in the ED's characterisation, the legal defences available (time bar, absence of mens rea, RBI general permission applicability), and mitigating factors. GP appears before the Adjudicating Authority at oral hearings and files the appeal before the ATFE if the penalty is confirmed.
Urgent bail applications before the PMLA Special Court under Section 45 PMLA — demonstrating that there are reasonable grounds to believe the accused is not guilty of money laundering and will not commit a money laundering offence on bail. GP builds the bail application on: weakness of the predicate offence, absence of direct money laundering evidence, community roots, and absence of flight risk.
Challenge to provisional attachment orders before the Adjudicating Authority under PMLA Section 8. GP challenges on grounds of: incorrect identification of attached property as proceeds of crime, procedural irregularity in the attachment order, and disproportionate attachment relative to the alleged money laundering amount.
Filing of compounding applications with the RBI before the ED initiates enforcement action. Voluntary compounding consistently produces significantly lower penalties than ED-initiated adjudication. GP advises on timing and basis for compounding applications and prepares the application with full disclosure and a strong mitigating case.
Defence of PMLA prosecutions — challenging the predicate offence, the identification of proceeds of crime, the money laundering transaction chain, and the prosecution's financial expert evidence. GP assembles the complete defence including the challenge to the predicate offence at the concurrent criminal court.
The ED can pursue the same conduct under FEMA (civil penalty) and PMLA (criminal prosecution) simultaneously. A FEMA violation involving foreign exchange transactions may also be characterised as money laundering if the proceeds are used in further financial transactions. GP coordinates the defence across both tracks for consistency and to maximise the effectiveness of the predicate offence challenge.
The ED has the power under PMLA Section 17 to search premises and seize cash where it has reason to believe the cash is proceeds of crime. Seized cash is not returned until the trial concludes — years later. GP files urgent applications before the PMLA Special Court for return of cash where the seizure was without sufficient reason and the cash is legitimate income supported by tax returns and bank records.
ED enforcement increasingly targets politically exposed persons, high-net-worth individuals, and senior corporate executives where the PMLA predicate offence is a regulatory violation (FEMA, securities law) rather than a conventional criminal offence. GP advises HNIs on the PMLA exposure arising from their financial transactions — identifying FEMA or SEBI compliance gaps that could form the basis of an ECIR.
Most ED enforcement matters engage both FEMA (civil) and PMLA (criminal) simultaneously. A firm that can handle only one track cannot advise on the strategic interaction between them — the timing of the compounding application, the effect of FEMA adjudication on the PMLA prosecution, and the use of ATFE proceedings to build the evidentiary record for the PMLA trial.
Securing PMLA bail requires an application specifically designed for the Section 45 standard — demonstrating weakness of the prosecution's merits case and the accused's community roots, compliance history, and absence of flight risk. GP has argued Section 45 bail applications before PMLA Special Courts in Mumbai and Delhi and before High Courts on further challenge.
GP's approach to every PMLA case begins with a thorough analysis of the predicate offence. A weak predicate offence is the most powerful basis for bail, for challenging the attachment, and ultimately for dismissal of the PMLA case. GP identifies weaknesses in the predicate offence prosecution at the earliest stage.
Secured PMLA Section 45 bail for a Mumbai businessman arrested by the ED in connection with an alleged FEMA violation (undisclosed foreign assets through a Mauritius structure). GP demonstrated the Mauritius structure was a legitimate business holding disclosed in income tax returns, and that a FEMA compounding application had been pending with RBI for eight months before the arrest. The Special Court granted bail, finding reasonable grounds to believe the accused was not guilty given the voluntary disclosure and pending compounding. GP simultaneously challenged the property attachment.
Defended a Delhi textile exporter against an ED SCN alleging non-repatriation of Rs.6 crore export proceeds, with a proposed penalty of Rs.18 crore (3x). GP's adjudication reply demonstrated the delay was caused by the overseas buyer's UK insolvency proceedings, the exporter had pursued recovery in the UK insolvency process, and had reported the non-repatriation to its authorised dealer bank as required. The Adjudicating Authority reduced the penalty to Rs.2.4 crore — the standard penalty for first-time non-wilful violations.
Challenged a PMLA provisional attachment of Rs.28 crore of a Mumbai family business's assets — including the family residence and the working capital account — arising from an alleged GST fraud by a supplier. GP demonstrated the family business had paid market price for goods, had no knowledge of the supplier's alleged fraud, and was a bona fide purchaser. The Adjudicating Authority freed the residential property and working capital account, restoring operating capability while maintaining attachment of commercial properties pending full trial.
GP's ED/FEMA enforcement practice covers the complete lifecycle — from the first ED summons through property attachment, arrest, bail, and PMLA Special Court trial — with strategic integration of the FEMA civil and PMLA criminal tracks.
For clients with concurrent SEBI enforcement where the SEBI violation is the PMLA predicate offence, GP's SEBI practice provides coordinated defence across all three regulators simultaneously.
How to build a Section 45 bail application that demonstrates weakness of the prosecution's case — and the evidence that has established reasonable grounds of innocence.
Read Insight →The Section 5 provisional attachment procedure, the Section 8 challenge, and the evidence that has successfully freed attached property pending trial.
Read Insight →Whether you need pre-investigation advice, are responding to a regulator notice, or are defending enforcement action — speak to GP today.