CCI Penalizes Goa Chemist & Druggist Association for anti-competitive practice

The Competition Commission of India (CCI) has discovered the Chemist & Druggist Association, Goa (CDAG) violating the Section 3 of the Competition Act, 2002 ("Act") for indulging in anti-competitive practices and imposed penalty of Rs. 2 Lakhs @10% on the average of the receipts for financial 2008-09, & 2009-10. CDAG'd guidelines that lays down the margins for wholesalers and retailers was found to be anti competitive affecting the interests of the consumers.CDAG had also prescribed a cap on the amount of the discount a wholesaler can give to the retailer and prohibited the retailer from giving any discounts to the consumers. CCI has directed CDAG to remove the clauses in the circulars, MoU and Guidelines and file an undertaking to this effect within 60 days from the date of receipt of the order. Full order of the CCI can be found here.

RBI Allows Exporters to Receive Advance Amount Beyond One Year

In a recent Circular Issued by RBI, it has permitted the AD Category- I banks to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the ‘export agreement’ provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment subject to the flowing conditions:

1. the KYC and due diligence exercise has been done by the AD Category –I bank for the overseas buyer;
2. compliance with the Anti Money Laundering standards has been ensured;
3. the AD Category-I bank should ensure that export advance received by the exporter should be utilized to execute export and not for any other purpose i.e., the transaction is a bona-fide transaction;
4. progress payment, if any, should be received directly from the overseas buyer strictly in terms of the contract;
5. the rate of interest, if any, payable on the advance payment shall not exceed London Inter-Bank Offered Rate (LIBOR) + 100 basis points;
6. there should be no instance of refund exceeding 10% of the advance payment received in the last three years;
7. the documents covering the shipment should be routed through the same authorised dealer bank; and
8. in the event of the exporter's inability to make the shipment, partly or fully, no remittance towards refund of unutilized portion of advance payment or towards payment of interest should be made without the prior approval of the Reserve Bank

This would ease the financial burden of the manufacturers in such a way that they can receive the advance amount from the foreign importer well in advance and adjust the manufacture of the goods accordingly. Necessary amendments will be made to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.