New Delhi, May 31 :     The draconian 27-year-old Foreign Exchange Regulation Act (Fera) will lapse tomorrow paving the way for a more humane legislation - the Foreign Exchange Management Act. The most significant change brought in by the new act is that forex law violators will no longer be treated as criminals but as civil offenders. Fema was enacted by the government as Fera had become incompatible with the new liberalised economic policies followed in the country today. Sections 3 to 9 of Fema spell out the important rules for those dealing in foreign exchange. The violation of these provisions would invite a monetary penalty amounting to a maximum of three times the sum involved, in contrast to five times prescribed in Fera. While specifying that there would be no prosecution in forex violation cases, the law says that in case an offender fails to pay the penalty, the enforcement directorate (ED) could move the court, which could then send the offender to jail. In jail too, the offender would be treated like a civil prisoner who has to pay for his stay behind bars. Cases already under Fera would have to be settled within a two-year timeframe, ie by May 31, 2001, after which they would lapse. However, if the Fera cases were in court, it would end with the verdict given by the judicial officer. At present, there are about 4000 cases which are before the courts under Fera and another 3000, in which investigation is almost complete. These 3000 cases are ready for filing before the competent courts. However there are about 346 cases investigations of which are still in the nascent stage. The enforcement directorate may not be in a position to pursue them and these would be decided under the Fema. Fema provides for a number of appellate authorities who could be approached by a person against whom the directorate officials have adjudicated and levied penalties. Section 5 and 6 of the Act provide for freer convertibility of rupee into other currencies regarding'current account transactions' as compared with the same in 'capital account transactions'.