The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)
Objective:
The Act was enacted to conserve foreign exchange and to prevent smuggling activities that were harming the national economy. It provides for preventive detention of persons involved in activities related to smuggling, foreign exchange manipulation, and illegal trade.
Key Provisions:
Preventive Detention Power:
The Act empowers the Central Government, State Governments, and certain officers to detain persons to prevent them from engaging in smuggling or foreign exchange violations.
Detention is preventive, not punitive (to stop future acts).
Grounds of Detention:
Engaging in smuggling activities.
Abetting or financing smuggling.
Dealing in smuggled goods.
Manipulating foreign exchange resources in violation of law.
Duration of Detention:
Maximum detention period: 1 year.
Can be extended up to 2 years in certain cases involving smuggling of goods affecting the economy.
Advisory Board:
Consists of Judges of a High Court.
Reviews detention orders within a specified time (usually within 3 months).
Advises Government whether detention should continue.
Protection of Detention Orders:
Detention orders cannot be challenged in ordinary courts except on procedural grounds.
Provides legal immunity to officials acting in good faith.
Reporting to Parliament:
The Government must place the detention orders and related details before Parliament.
Importance of the Act:
Ensures control over foreign exchange misuse.
Prevents illegal inflow/outflow of currency.
Protects Indian economy from black money and smuggling networks.
Strengthens national security by curbing cross-border smuggling.
Considered a preventive detention law like NSA (National Security Act).
📑 Summary Table
| Aspect | Details |
|---|---|
| Name of Act | The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) |
| Objective | To conserve foreign exchange & prevent smuggling activities |
| Type of Law | Preventive detention law |
| Authorities Empowered | Central Govt., State Govts., and certain officers |
| Grounds of Detention | Smuggling, abetting smuggling, financing smuggling, illegal foreign exchange dealings |
| Duration of Detention | Up to 1 year (extendable to 2 years in special cases) |
| Advisory Board | Judges of High Court review detention orders |
| Judicial Review | Limited; orders protected except on procedural grounds |
| Parliamentary Oversight | Reports submitted to Parliament |
| Importance | Protects economy, prevents black money, ensures national security |
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