Module: General Practice
Q83: Consider the following duties of an Authorized Person (AP) under Section 10 of FEMA. Which statement is CORRECT?
✅ Correct Answer: C
Option C is the statutory duty.
Concept Definition: Due Diligence obligations of the AP.
Structural Breakdown: The Declaration Rule: Under Section 10(5), an AP shall require a declaration from the person confirming that the transaction is lawful.
Refusal Duty: If the person refuses to declare, or if the AP believes the transaction involves a contravention, the AP must refuse to handle the transaction.
Causal Reasoning: This effectively deputizes banks (APs) as the first line of defense in forex compliance.
They are not just facilitators; they are gatekeepers.
Concept Definition: Due Diligence obligations of the AP.
Structural Breakdown: The Declaration Rule: Under Section 10(5), an AP shall require a declaration from the person confirming that the transaction is lawful.
Refusal Duty: If the person refuses to declare, or if the AP believes the transaction involves a contravention, the AP must refuse to handle the transaction.
Causal Reasoning: This effectively deputizes banks (APs) as the first line of defense in forex compliance.
They are not just facilitators; they are gatekeepers.