The government on Monday said that it will initiate proceedings under the Foreign Trade Act and could also take the help of CBI and Economic Offence Wing against exporters who have issued post-dated Letters of Credit beyond May 13.
In a notice, the Directorate General of Foreign Trade also said that the government will take all necessary action against those banks which are found complicit with exporters in issuing post-dated LCs as it has been “apprehended that some of the exporters are applying for registration certificates from RA (regional authorities) based on improper documents and therefore more checks need to be put in the system”.
“In cases where the LC date is on or prior to May 13 but the swift message/message exchange date between the Indian and foreign bank is after May 13, the RA may conduct full investigation (if required, through external experts) and if these are found to be ante-dated, immediate proceedings under the FT (D&R) Act needs to be initiated against the exporter,” the DGFT said.
The government had banned wheat on May 13 but allowed exports against valid irrevocable LCs issued on or before then as a transitional arrangement.
Later, it directed to get the LCs registered to ensure that only exporters with valid and genuine LCs got the final nod.
“Such cases will be further examined for referring to enforcement agencies like EoW/CBI,” it said, adding that in case of complicity of any banker where ante-dating is established necessary proceedings as per law will be initiated.
It also said that in order to plug the loopholes, RAs of the directorate will do physical verification of all LCs whether already approved or under process and rope in professional agencies besides ensuring validation or endorsement by recipient banks.
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