ED cannot seek anybody’s interrogation in custody

ED cannot seek anybody’s interrogation in custody

Subject: Polity

Section: National body

Concept :

• The enforcement directorate (ED) does not have the power to seek custody of an accused for interrogation under the Prevention of Money Laundering Act (PMLA).

Directorate of Enforcement (ED)

• The Directorate of Enforcement (ED) is a multi-disciplinary organization mandated with investigation of offences of money laundering and violations of foreign exchange laws.
• It functions under the Department of Revenue of the Ministry of Finance.
• As a premier financial investigation agency of the Government of India, the Enforcement Directorate functions in strict compliance with the Constitution and Laws of India.
• In tune with the International Anti Money Laundering regime, the Prevention of Money Laundering Act, 2002 (PMLA) was enacted and ED was entrusted with its enforcement w.e.f. 1st July 2005.

Structure of ED

• The Directorate of Enforcement, with its headquarters at New Delhi, is headed by the Director of Enforcement.
• There are five regional offices at Mumbai, Chennai, Chandigarh, Kolkata and Delhi headed by Special Directors of Enforcement.
• The Directorate has 10 Zonal offices each of which is headed by a Deputy Director and 11 sub Zonal Offices each of which is headed by an Assistant Director.
• Recruitment of the officers is done directly and by drawing officers from other investigation agencies.
• It comprises officers of IRS (Indian Revenue Services), IPS (Indian Police Services) and IAS (Indian Administrative Services) such as Income Tax officer, Excise officer, Customs officer, and police.

Statutory Functions of ED

• The statutory functions of the Directorate include enforcement of following Acts:
• COFEPOSA: Under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), this Directorate is empowered to sponsor cases of preventive detention with regard to contraventions of FEMA.
• Foreign Exchange Management Act, 1999 (FEMA): It is a civil law enacted to consolidate and amend the laws relating to facilitate external trade and payments and to promote the orderly development and maintenance of foreign exchange market in India.
• ED has been given the responsibility to conduct investigation into suspected contraventions of foreign exchange laws and regulations, to adjudicate and impose penalties on those adjudged to have contravened the law.
• Prevention of Money Laundering Act, 2002 (PMLA): Following the recommendations of the Financial Action Task Force (FATF) India enacted PMLA.
• The ED has been entrusted with the responsibility of executing the provisions of PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
• Fugitive Economic Offenders Act, 2018 (FEOA): Lately, with the increase in the number of cases relating to economic offenders taking shelter in foreign countries, the Government of India introduced the Fugitive Economic Offenders Act, 2018 (FEOA) and ED is entrusted with its enforcement.
• This law was enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
• Under this law, the ED is mandated to attach the properties of the fugitive economic offenders who have escaped from India warranting arrest and provide for the confiscation of their properties to the Central Government.

How ED Functions under PMLA?

• The ED carries out search (property) and seizure (money/documents) after it has decided that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
• On the basis of that, the authorities decide if arrest is needed as per Section 19 (power of arrest).
• Under Section 50 of the PMLA, the ED can also directly carry out search and seizure without calling the person for questioning.
• It is not necessary to summon the person first and then start with the search and seizure.
• If the person is arrested, the ED gets 60 days to file the prosecution complaint (chargesheet) as the punishment under PMLA doesn’t go beyond seven years.
• If no one is arrested and only the property is attached, then the prosecution complaint along with attachment order is to be submitted before the adjudicating authority within 60 days.

ED’s Jurisdiction

• Both FEMA or PMLA apply to the whole of India. So, the ED can take action against any person on which this act applies.
• Cases under FEMA may lie in civil courts where PMLA cases will lie in criminal courts.
• The agency has jurisdiction over a person or any other legal entity who commits a crime.
• All the public servants come under the jurisdiction of the agency if they are involved in any offence related to money laundering.
• ED can not take an action suo motu. One has to complain to any other agency or Police first and then ED will investigate the matter and will identify the accused.
• The ED will investigate the matter and may attach the property of an accused person and also make an arrest and start proceeding with the violation of the provisions of FEMA and PMLA act.
• The matter will be resolved by way of adjudication by courts or PMLA courts.
• For further reference on PMLA – https://optimizeias.com/prevention-of-money-laundering-act/