Section 38 FEMA Act 1999 - Empowering Other Officers

Section 38 of the Foreign Exchange Management Act, 1999 (FEMA) enables the Central Government to authorise specified officers outside the Directorate of Enforcement to exercise stated FEMA powers and discharge stated FEMA duties, subject to the conditions and limitations imposed by the Government.

In simple terms: Section 38 is an enabling provision. It does not automatically confer every FEMA power on every customs, central excise, police or other government officer. The authority must arise from a Central Government order, and the officer can act only within the powers, duties, conditions and limitations stated or applicable to that authorisation.

Text and meaning of Section 38

Section 38(1): The Central Government may, by order and subject to conditions and limitations it considers appropriate, authorise an officer of customs, a central excise officer, a police officer, or another officer of the Central Government or a State Government to exercise specified powers and discharge specified duties of the Director of Enforcement or another Enforcement officer under FEMA.

Section 38(2): Officers covered by sub-section (1) exercise like powers to those conferred on income-tax authorities under the Income-tax Act, 1961, subject to conditions and limitations imposed by the Central Government.

The paragraph above is a reader-friendly explanation. For the authoritative statutory wording, refer to the official India Code text linked in the sidebar.

Who may be authorised under Section 38?

The Central Government may authorise any of the categories expressly mentioned in Section 38(1), including an officer of customs, a central excise officer, a police officer, or another officer serving the Central Government or a State Government. The provision therefore permits FEMA functions to be entrusted to specified officers outside the regular Enforcement Directorate structure when the Central Government issues an appropriate order.

How does the authorisation operate?

Central Government order is required: the statutory mechanism is an authorisation made by order.
Powers may be limited: the order may confer only specified powers or duties rather than the whole range of powers available to Enforcement officers.
Conditions and limitations matter: an authorised officer must act within the limits attached to the authorisation.
Functions derive from FEMA: the order may permit the officer to exercise powers or discharge duties of the Director of Enforcement or another officer of Enforcement under the Act.
Sub-section (2) applies: the authorised officers exercise like powers to those conferred on income-tax authorities under the Income-tax Act, 1961, subject to Central Government conditions and limitations.

Relationship with Sections 36 and 37 of FEMA

Section 38 appears in Chapter VI of FEMA, dealing with the Directorate of Enforcement. Section 36 concerns the Directorate of Enforcement, while Section 37 deals with powers including investigation and search-related matters. Section 38 supplements that framework by allowing the Central Government to empower other specified government officers, but only in accordance with the authorising order and applicable statutory limits.

Why Section 38 is important

The provision creates an administrative mechanism for extending specified FEMA enforcement functions to other government officers where legally authorised. In any particular matter, the relevant authorisation order, the exact power invoked, and any conditions or limitations attached to that authority are therefore important when examining the officer's jurisdiction.

Key takeaway

Section 38 is about delegated statutory authority. The identity of the officer alone is not enough; the legal basis, scope and limits of the Central Government's authorisation must be considered. Readers dealing with an investigation, summons, search or other FEMA proceeding should examine the applicable provision and the specific authorisation relied upon in that proceeding.