Enforcement Directorate

Enforcement Directorate or ED is a dedicated financial investigation agency that works under the Ministry of Finance, Department of Revenue, and Indian Government that enforces many laws. The ED is formed for enforcing economic laws, and it also fights the economic crimes that happen in India. This is a vital portion of the Ministry of Finance. Some departments categorized under the ED are the Indian Police Service, the officials of the Indian Revenue Service, and the officials of the Indian Administrative Service.

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The Organizational Setup 

The ED has got its headquarters in New Delhi, and the Director of Enforcement heads it. There are five regional offices of ED at various places, like Chennai, Kolkata, Mumbai, Delhi, and Chandigarh, and all of them are headed by Special Enforcement Directors. 

The zonal offices of the ED are present in Bengaluru, Ahmedabad, Chennai, Chandigarh, Delhi, Kochi, Guwahati, Panaji, Jaipur, Hyderabad, Kolkata, Jalandhar, Mumbai, Lucknow, Srinagar, and Patna. A Joint Director heads these zonal offices.

Again, the Directorate has some sub-zonal offices at Kozhikode, Bhubaneswar, Madurai, Indore, Allahabad, Nagpur, Dehradun, Raipur, Shimla, Surat, Jammu, and Visakhapatnam. A Deputy Director remains responsible for heading these sub-zonal offices.

Enforcement Directorate and Its Major Functions

The chief objective of the Enforcement Directorate is to enforce a couple of acts; The FEMA (Foreign Exchange Management Act), 1999, and the PMLA (Prevention of Money Laundering Act), 2002.

On 8th November 2016, when our Prime Minister, Mr. Narendra Modi, announced the demonetization of five hundred and Rupees one thousand currency notes, the NDA government for tracing the flow of black money extended the chances of the investigations of income tax beyond tax evasion. It roped in the ED and the CBI to hunt for the probable offenses related to money laundering.

If the Enforcement Directorate and its major functions register a case under the Prevention of Money Laundering or PMLA, then all the assets equal to the alleged undisclosed income get confiscated when the person is proved to be guilty. Previously, when the Income Tax Dept. used to get hold of some unaccounted money, the accused was supposed to pay the penalty or the tax, and he used to get away without any prosecution.

However, after demonetization, this alteration in policies has resulted in the unearthing of numerous hoarding cases of black money.

What is meant by FEMA and PMLA?

A short introduction about FEMA and PMLA is given here:

FEMA – FEMA is meant Foreign Exchange Management Act, 1999, and it is a civil law that many officers empower for conducting investigations into the suspected contraventions related to the Foreign Exchange Regulations, Foreign Exchange Laws, contraventions, adjudications, and also impose penalties on the adjudged people who have contravened the law.

PMLA – PMLA is the abbreviation of the Prevention of Money Laundering Act, 2002. This is acknowledged as criminal law, and here officers are empowered to conduct investigations to trace assets derived from various proceeds of crime to attach or confiscate the same. It also involves the prosecution and arresting of the offenders who are discovered to be included in money laundering cases.

Functions of Enforcement Directorate

The chief functions that the Enforcement Directorate does are:

• ED investigates whether or not there has been a violation of FEMA. This came into force from the 1st of June, 2000. The violations of FEMA are handled through adjudication by several designated authorities who are related to the ED. Here, penalties rise to 3 times in comparison to the sum involved.

• The investigating offenses related to money laundering under the requirements of PMLA came into force from the 1st of July, 2005. This takes actions of the confiscation and attachment of property when the same happens to be the proceeds of crime derived from some Scheduled Offenses. There are one hundred and fifty-six offenses under twenty-eight statutes considered Scheduled Offenses under the Prevention of Money Laundering Act, 2002.

• The job of the ED also involves investigating the suspected violations that happen under the FEMA provisions. The suspected violations include hawala transactions, non-realization of the proceeds of the exports, ownership of foreign currency in large amounts, buying of assets abroad, violations of foreign exchange, and non-repatriation of foreign exchange besides various other violations under FEMA.

• ED also processes cases of Indian fugitive(s) under the Fugitive Economic Offenders Act, 2018. This act works to deter fugitive economic lawbreakers from escaping from the Indian process of law. ED also makes them stay outside the Indian courts’ jurisdiction, and it preserves the holiness of Indian law.

• It can be said about Enforcement Directorate that it accumulates, disseminates, and forms intelligence information connected to the infringement of FEMA, 1999. The job of the ED is to receive intelligence inputs from State and Central Intelligence agencies. ED also looks after the complaints made in this matter.

• The ED also provides and seeks mutual legal assistance from or to respective states related to the confiscation and attachment of proceeds of crime. Later, it hands over the accused people under the Act of Money Laundering.

• The ED holds every right to survey, search, arrest, seize, and take prosecution action against the offenders of the PMLA offense.

• The Enforcement Directorate also renders cooperation in foreign nations related to matters connected to the restitution of assets. Additionally, it seeks cooperation in these matters. 

• The ED also sponsors cases connected to preventive detention under COFEPOSA (Conservation of Foreign Exchange & Prevention of Smuggling Activities Act), 1974, regarding the contraventions of FEMA.

• The ED settles the violation cases of the erstwhile FERA and FEMA and decides penalties that must be imposed on the termination of some settlement proceedings. 

Hence, it can be concluded that the ED plays a vital role in fighting the danger of corruption.

Some Vital Points About ED

• Enforcement Directorate has got ten zonal offices. A Deputy Director heads every office. Again, there are eleven sub zonal offices where the Assistant Directors are considered the heads.

• The Dept. of Revenue of the Ministry of Finance puts administrative control on the Directorate for operational purposes.

• The Directorate enforced some regulations under the Act of Foreign Exchange Regulation. Afterwards, FEMA replaced the FERA.

• The ED works in the form of a leading financial investigation agency under the Govt. of India. Its working happens to be according to strict compliance with the Indian laws. Additionally, it respects all the guidance of every lawful authority.

• The official website of the ED does enlist its various other objectives that are commonly connected to checking the cases of money laundering. 

The ED remains impartial, and to accomplish this, it remains reasonable and fair in its investigations. It also pursues and reveals the truth in due time. Additionally, it makes decisions without any favour or fear. The job of the ED also includes acting without prejudice, bias, or malice. It also does not permit the violence of power in any condition.