Table of Content
- ACTS ADMINISTRATED BY IS-I DIVISION
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- From green airports to 50 new RCS routes and disinvestment of Air India, here is the year-end review of MoCA
- Corporate Travel: Making Smart Decisions
- Foreign nationals from border sharing countries need security clearance from Home Ministry for obtaining DIN
- What is the procedure for obtaining clearance from the Ministry of Home Affairs for the conference Visa/seminar/workshop?
- Management
The new policy is aimed at bringing about a healthy balance between meeting the imperatives of national security and facilitating ease of doing business and promoting investment in the country. Broadcast of live events without prior registration will invite penal action, which could include suspension or cancellation of the channel’s permission. The guidelines, however, don’t clarify which event to be uplinked live would be construed as a news or current affairs event, leaving it up to the decision of the central government. Only such events, which from the standpoint of parameters require MHA’s security clearance, should be forwarded by the Ministries/Departments of the Central Government, State Government, PSUs etc. to the Ministry of Home Affairs at least 30 days prior to the commencement of the event. The current notification, in collaboration with PN-3, has tried to ensure that Indian businesses are secure from hostile takeovers from foreign powers, especially China. An additional layer of check involving the MHA will ensure authenticity of any foreign directors trying to be on the board of an Indian company.
Further, this change might deter Indian companies that urgently need to fill vacant directorship positions from appointing nationals from the countries that share a land border with India. In such instances, companies may be forced to choose Indian nationals/ nationals from other countries to fill these positions, given that security clearances might take time and may not be forthcoming. The Ministry of Corporate Affairs (“MCA”), vide notification dated June 1, 2022, notified theCompanies Amendment Rules, 2022 (“2022 Amendment Rules”), which amended the Companies Rules, 2014 (“Appointment and Qualification Rules”). This amendment states the security clearance requirements needed to hold directorship position in an Indian company, if an individual is a national of a country which shares land border with India. From a practical standpoint, it is essential for companies to recalibrate and review their existing Board composition, particularly those companies which have nationals from a country that shares land borders with India on their Board. In the event the directorship term of a person belonging to a country that shares land borders with India is nearing expiry, then such companies must act quickly to ensure that security clearance is obtained or find replacements.
ACTS ADMINISTRATED BY IS-I DIVISION
Afghanistan, China, Iraq, Pakistan, Sudan, Foreigners of Pakistani origin and Stateless persons. Now, the person seeking appointment as a director who is a national of a country that shares a land border with India shall have to obtain necessary security clearance from the Ministry of Home Affairs, Government of India shall attach the same along with the consent. The Form DIR -2 has also been suitably amended to include a disclosure from the applicant that he/she is not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking an appointment as director. Now security clearance from Home Ministry would be required if a person seeking an appointment as a director or applying for Director Identification Number is a national of a country that shares a land border with India. The necessary security clearance shall be attached along with the consent or application for DIN. Thus, taking the theme of protectionism one step further, through the 2022 Amendment Rules, restrictions on countries sharing land borders with India has been extended beyond investments to cover management of Indian companies to now include nationals who hold or seek to hold directorship positions in Indian companies.
Ministry of Home Affairs on 01st June 2022 issued a notification requiring to amending the Companies Rules, 2014. In pursuant to the amendment, it will become mandatory to obtain security clearance for individuals from countries sharing land borders with India before being appointed as directors on the boards of Indian companies. The guidelines reiterate that security clearances from the MHA will be mandatory for the company and its directors, in case of a change in directors or appointment of a new executive, change in shareholding pattern, or the transfer of a channel from one entity to the other.
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While most companies continue to grapple with PN-3, the new 2022 amendments are certain to increase applications from neighbouring nationals. This will create an administrative burden, as both FDIs and Foreign Directors now seek permission for operating in India. Thus, PN-3 and the 2022 notification are complimentary to each other.
Thereafter, the MCA also notified the Companies Amendment Rules, 2022, dated May 30, 2022, and inserted a new sub-rule to Companies Rules, 2016, and new Form No. CAA 16 related to declaration in terms of Rule 25A. Through this amendment, in case of a compromise or an arrangement or merger or demerger between an Indian company and a company/ body corporate, which has been incorporated in a country sharing land border with India, a declaration through Form No. CAA 16 would be required at the stage of submission of application under Section 230 of the Companies Act, 2013 (“Companies Act”), stating whether prior approval under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, is required or not.
From green airports to 50 new RCS routes and disinvestment of Air India, here is the year-end review of MoCA
The third source added that too much reference to the MHA is also cause of worry, and the absence of a single-window clearance is also an issue, given that other ministries and departments involved in the process such as the Department of Space and the Department of Telecommunication, are still not aligned. According to the I&B ministry, there was a need to review and amend the existing guidelines, which were last issued in 2011. This need was felt because of challenges emerging from “fast evolving broadcasting technology”, “changes in the market scenarios”, and other operational developments in the broadcasting sector. There was also a need for creating a conducive environment for ease of business on a “sound regulatory framework”. Home ministry can withdraw security clearance to TV channels under new draft...
There is no objection to the delegates coming to attend conference etc. in India combining tourism with attending the conference. Missions may, therefore, at their discretion grant visas for the required period. Such visa shall not exceed 6 months, subject to usual conditions applicable for the grant of the Tourist visa. In the above cases, MEA will examine the proposal along with MHA clearance may be granted within four weeks. Clearance will be conveyed to the Missions and organizers of the conference. In case a Mission needs clarifications about the organizers, it can also refer the case to MEA and MHA.
“The Ministry of Home Affairs has given security clearance to Air India CEO-designate Campbell Wilson,” a senior government official told ANI. Under civil aviation rules, MHA clearance is mandatory for the appointment of key personnel at airlines, especially foreigners. The Department for Promotion of Industry & Internal Trade , in April 2020, issued a notice – PN-3 – regarding Foreign Direct Investment . With this notification, the Government made its approval for foreign investments mandatory from any country that shares a land border with India to discourage takeovers and other unfair activities influenced from such countries seeking to take advantage of the Pandemic, which was at its peak in 2020. Therefore, FDI proposals from China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan require Government approval.
The guidelines also specify that channels which do not remain operational for 60 days should inform the I&B ministry, along with reasons about why it has remained non-operational, failing which, it would receive a warning. In case the channel continues to be non-operational for over 90 days, it would invite suspension or cancellation of permission. Also included in the amended guidelines are provisions for penal action, such as a warning and/or prohibition of broadcast up to 30 days, for use of dual logos for a channel or using a name or logo not approved by the ministry. “The guidelines do not specify a timeline required to get a licence, so business planning can’t take place,” the second source said. “But, they do not explicitly state if a channel with security clearance already in the broadcasting business will have to go for another round of security clearance from the MHA if it has to open a new channel,” the source quoted above said. The new guidelines also list a series of penal actions for violations from broadcasters, ranging from prohibiting a channel’s broadcast for 30 days if it uses dual logos, to stopping a channel from live broadcasts for up to six months in case it fails to register for the telecast of a live event.
A foreign national intending to attend an International Conference/ seminar/ workshop while already in India on Business/ Employment / Student/ Research visa may seek prior permission of the FRRO/ FRO concerned by making a suitable application along with all relevant details. However, in respect of cases falling within the parameters of Prior reference categories, such permission shall be granted by FRRO/ FRO concerned only with the prior approval of the Ministry of Home Affairs. Provided that no application number shall be generated in case of the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with application for Director Identification Number. The amendment requires necessary security clearance from Ministry of Home Affairs, GoI in case the person seeking appointment to act as Director shares land border with India alongwith the consent. A second industry source said there is a disconnect between the guidelines and the Companies Act, because most of the time, “new directors in the company are from within the employees, and unless the MHA gives security clearance to the person, he or she cannot take up the job”.
No proposal for setting up of new SEZ will be entertained without this information. Before obtaining DIN, such person required to take approval from Ministry of Home Affairs and such clearance/ approval are required to be attached in DIR -3. A further amendment has also been made to Rule 10 which relates to the allotment of the DIN. Rule -10 prescribes that on the generation of the that on the submission of the Form DIR-3 on the portal and payment of the requisite amount of fees through online mode an application number shall be generated by the system automatically. Security clearance is granted by the Ministry of Home Affairs after assessing reports received from the Central Intelligence and investigating agencies from the national security point of view. Average processing time for such clearance was about 71 days in 2018.
As per information provided by Department of Industrial Policy & Promotion and Reserve Bank of India, FDI through automatic route is under general permission and can be received without any approval, in compliance with the Foreign Exchange Management Regulation, 2017. No information is available about the number of proposals received for FDI under automatic route. Therefore, information related to percentage in terms of number of FDI proposals coming through the automatic route is not available. Sounds exactly like how “nationalists”/”republicans” tend to savage certain reforms by certain( ahem!) structured belief-systems ( “organised religions”). The guidelines also do not mention preconditions for use of foreign satellites. Industry sources said the new guidelines do address some challenges in terms of the ease of doing business in the broadcast sector.
Copy of online filled form, letter of invitation from India and proof of Residential Address. If any person wants to appoint Director in Indian Company and belong to any country sharing land borders with India listed in point 1 above then – 1. Before appointment, such persons are required to take approval from Ministry of Home Affairs and the same shall be attached along with consent to act director given in DIR -2.
What is the procedure for obtaining clearance from the Ministry of Home Affairs for the conference Visa/seminar/workshop?
The changes are mainly brought in to restrict Chinese takeovers in India. According to MCA data, there are about 490 foreign nationals registered as directors in India companies, 30% of whom are Chinese. No, the request to participate in the international conference/seminar/workshop shall be made directly to the Mission.
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