The committee, which has submitted its report in December 1998, has recommended that the saving (and repeal) clause applicable to FERA, be applied only to FERA cases where prosecution has been launched and adjudication started following the completion of investigation.

Put simply, this means, FERA cases where show cause notices have not been issued and prosecution not launched, will not be covered by FERA on repeal of the Act. The committee was chaired by Congress MP Murli Deora. For the offenses covered under FERA, a case is not formally initiated as in other Acts where an FIR is filed. The show-cause notice(SCN) is issued on completion of investigation, and adjudication commences. Prosecution, if recommended is also at this stage only.

The recommendation of the Standing Committee would mean that those who have cases pending against them but have not received SCN and the prosecution is not initiated will go out of the net of FERA. Several MPs in the committee have also dissented from their colleagues on the committee on this score, the report reveals.

In fact, one dissenting note from Rupchand Pal and V Radhakrishnan, MPs, warns of the experience of many SE Asian countries which went for full convertibility in a hurry. But the most scathing note comes from Janata Dal MP, S Jaipal Reddy.

``My severest discomfort is, however, with the proposed amendments to clause 49 (repeal and saving). ..I am afraid that this will amount to grant of general amnesty in respect of FERA. I may recall that even Income-Tax amnesty schemes which have been made operative more than once, covered only unnoticed and unregisteredcases.''

Of the sensitive cases under FERA investigation, where SCN are still to be issued are the Rs 133 cr urea scam case and the (FERA) cases in the Jain hawala scam. Most of the 7,000-odd cases where SCN are yet to be issued are at the stage of either intelligence or investigation.

Only about half of them are pending for periods between one to three years, about 1500 of them are as recent as six months old.

The proposed FEMA bill is seeking to make such offenses civil liabilities, with a highly reduced penalty. The committee, while recommending a higher penalty in FEMA, is silent on prosecution. FEMA has no proposal for prosecution like FERA had.

There is considerable disquiet among officers of the Enforcement Directorate about the fate of their cases. Their argument is : When an Act is repealed, offenses booked under the Act must continue to be tried under the same law as was in operation at the time of commission of the offence.

When TADA lapsed, the cases did not lapse, even without thechargesheet. The recommendation on the saving clause would result in giving the rich, influential and crafty offender the benefit if he had managed to delay the process of law.

Fema is going to allow limited transfer of funds in both capital and current accounts, but frauds detected under FERA were usually complex crimes, not mere transfers of forex. Most of these frauds are about laundering of slush money through over-invoicing of exports or imports, the use of fake documents non-repatriation of forex earned abroad.

While the committee had also made some recommendations on specific misuse, it is increasingly clear that the Prevention of Money Laundering Act (PMLA) should also come into effect with FEMA, if not before it. It is not still clear which agency will administer PMLA, whether it will be the ED or the Central Economic Intelligence Bureau or the CBDT. Frauds such as referred to earlier are sought to be tried by the PMLA, specifically the provisions ruling crimes under the category `falsificationof accounts'.