MANU/APDR/0005/2017

Ministry : Reserve Bank of India

Department/Board : RBI A.P. DIR (Series)

Circular No. : A. P. (DIR Series) Circular No. 28
                   RBI/2016-2017/216

Date : 25.01.2017

Notification/ Circulars Referred : Notification No. FEMA.120/RB-2004 dated July 07, 2004 MANU/RFEM/0035/2004;Notification No. FEMA 382/2016-RB dated January 02, 2017 MANU/RFEM/0001/2017

Citing Reference:
Notification No. FEMA.120/RB-2004 dated July 07, 2004 MANU/RFEM/0035/2004  Referred

Notification No. FEMA 382/2016-RB dated January 02, 2017 MANU/RFEM/0001/2017  Referred

To

All Category- I Authorised Dealer Banks

Madam / Sir,

Prohibition on Indian Party from making direct investment in countries identified by the Financial Action Task Force (FATF) as "Non Co- operative countries and territories"

Attention of the Authorised Dealer Category - I (AD - Category I) banks is invited to Regulation 6 of FEMA Notification No. FEMA.120/RB-2004 dated July 07, 2004, as amended from time to time.

2. At present, there is no restriction on an Indian Party with regard to the countries, where it can undertake Overseas Direct Investment. In order to align, the instructions with the objectives of FATF, on a review, it has been decided to prohibit an Indian Party from making direct investment in an overseas entity (set up or acquired abroad directly as JV/ WOS or indirectly as step down subsidiary) located in the countries identified by the FATF as "non co-operative countries and territories" as per list available on FATF website www.fatf-gafi.org or as notified by the Reserve Bank of India from time to time.

3. Necessary amendments to the Notification ibid have been notified vide Notification No. FEMA 382/2016-RB dated January 02, 2017 c.f. G.S.R. No. 01(E) dated January 02, 2017.