A multi-agency group in India, has decided at a high level meeting that the Foreign Exchange Management Act (FEMA) should be made a criminal offence in view of the economic damage caused by trade-based money laundering (TBML), illegal hawala transactions and foreign currency smuggling.

At the moment, breaches of FEMA are treated as compoundable offences, which means offenders can only be fined or pay penalties and cannot be sentenced to prison.

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