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What is Enforcement Directorate (ED)?

What is Enforcement Directorate (ED)?

What is Enforcement Directorate (ED)?

The Enforcement Directorate, also known as the Directorate General of Economic Enforcement (Enforcement Directorate), is an agency tasked with enforcing economic laws and combating economic crimes in India. Initially focused on handling violations of Exchange Control Laws under the Foreign Exchange Regulation Act of 1947, it was originally established in 1956 as an 'Enforcement Unit' under the Department of Economic Affairs. In 1957, it was renamed as the Enforcement Directorate (ED) and later shifted to the Department of Revenue for administration in 1960. Presently, the Enforcement Directorate operates under the Department of Revenue within the Ministry of Finance. With its headquarters located in New Delhi, it maintains numerous regional offices across the country. The Enforcement Directorate is overseen by the Director of Enforcement, who is typically an officer of the Indian Revenue Service (IRS).

Objective: The organization's mandate involves enforcing the provisions of two key fiscal laws – the Foreign Exchange Management Act, 1999 (FEMA) and the Prevention of Money Laundering Act, 2002 (PMLA).

Composition: It comprises officers from various civil services including the Indian Revenue Service, Indian Police Service, and the Indian Administrative Service, as well as promoted officers from its own cadre. Besides direct recruitment, the Directorate also brings in officers from different Investigating Agencies such as Customs & Central Excise, Income Tax, and Police, on deputation. While the department's total strength is less than 2000 officers, approximately 70% of officials are deputed from other organizations, with the Enforcement Directorate having its own cadre as well.

Headquarters: The Directorate of Enforcement is headquartered in New Delhi, with five regional offices located in Mumbai, Chennai, Chandigarh, Kolkata, and Delhi, each headed by Special Directors of Enforcement.


Functions of Enforcement Directorate (ED):

1.    Investigating violations of Foreign Exchange Management Act (FEMA) laws and provisions.
•    Designated ED officials adjudicate FEMA violations.
•    Penalties of up to three times the sum involved can be imposed.

2.    Investigating offences under the Prevention of Money Laundering Act, 2002 (PMLA) laws and provisions.
•    ED is empowered to attach the assets of individuals found guilty of violating FEMA. "Attachment of assets" entails prohibiting the transfer, conversion, disposition, or movement of property by an order issued under Chapter III of the Money Laundering Act.

3.    Processing cases of fugitives from India under the Fugitive Economic Offenders Act, 2018.
•    Offenders opt to remain outside the country and its jurisdiction to evade legal consequences.
•    This Act enables the prosecution of economic offenders evading the law and upholds the integrity of the justice system in the nation.

4.    Adjudicating show-cause notices issued under the repealed Foreign Exchange Regulation Act, 1973 (FERA).

5.    Initiating cases of Preventive Detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) concerning FEMA violations.

6.    Providing assistance to foreign countries in matters related to money laundering and asset recovery under the provisions of the PMLA.

Special court

To adjudicate offenses punishable under section 4 of the Prevention of Money Laundering Act (PMLA), the Central Government, in consultation with the Chief Justice of the High Court, designates one or more Sessions Courts as Special Courts, commonly referred to as "PMLA Courts." Any appeal against an order issued by the PMLA Court can be directly filed in the High Court having jurisdiction over the area.

 

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