RBI imposes restrictions on capital transactions with North Korea

RBI amends FEMA (Permissible Capital Account Transactions) Regulations, 2000

The Reserve Bank of India has notified the FEMA (Permissible Capital Account Transactions) (First Amendment) Regulations, 2019 wherein norms related to prohibition of capital account transaction have been amended. In regulation 4, new clauses (c) and (d) have been added providing that no person resident in India shall undertake any capital account transaction which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, of the Government of India, with any person who is a citizen of or a resident of the Democratic People’s Republic of Korea, or an entity incorporated or otherwise, in the Democratic People’s Republic of Korea, until further orders.

The amendment also prescribes that the existing investment transactions, with any citizen of or resident of the Democratic People’s Republic of Korea, or an entity incorporated or otherwise in Democratic People’s Republic of Korea, or any existing representative office or other assets possessed in Democratic People’s Republic of Korea, by a person resident in India, which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, shall be closed/liquidated/disposed of/settled within a period of 180 days from the date of issue of this Notification, unless there is specific approval from the Central Government to continue beyond that period

Foreign Companies in Telecom, defence, Information and Broadcasting and private security sectors will not be required to take permission of the RBI to open Liaison or Branch offices