Explain briefly scope and procedure for compounding of contravention under Foreign Exchange Management Act, 1999.

Scope for Compounding of contravention under Foreign Exchange Management Act, 1999 are as under: Any person who contravenes any provision of the FEMA, 1999 except section 3(a) or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act or contravenes any condition subject to which an authorization is issued by the Reserve Bank, can apply for compounding to the Reserve Bank. Applications seeking compounding of contraventions under section 3(a) of FEMA, 1999 may be submitted to the Directorate of Enforcement. Wilful, malafide and fraudulent transactions are, however, viewed seriously, which will not be compounded by the Reserve Bank. Procedure for Compounding of contravention under Foreign Exchange Management Act, 1999 are as under: On receipt of the application for compounding, the Reserve Bank shall examine the application based on the documents and submissions made in the application and assess whether contravention is quantifiable and, if so, the quantifiable amount of contravention. The Compounding Authority may call for any information, record or any other documents relevant to the compounding proceedings. In case the contravener fails to submit the additional information/documents called for within the specified period, the application for compounding will be liable for rejection. The following factors, which are only indicative, may be taken into consideration for the purpose of passing compounding order and adjudging the quantum of sum on payment of which contravention shall be compounded: the amount of gain of unfair advantage, wherever quantifiable, made as a result of the contravention; the amount of loss caused to any authority/agency/exchequer as a result of the contravention; economic benefits accruing to the contravener from delayed compliance or compliance avoided; the repetitive nature of the contravention, the track record and/or history of non-compliance of the contravener; contravener's conduct in undertaking the transaction and in disclosure of full facts in the application and submissions made during the personal hearing; and any other factor as considered relevant and appropriate.