Enforcement Directorate (ED)

Enforcement Directorate (ED)

Subject: Governance

Section: National Bodies

Context:

On May 1st, 1956, an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA). In the year 1957, this Unit was renamed as ‘Enforcement Directorate’. The administrative control of the Directorate was transferred from the Department of Economic Affairs to the Department of Revenue in 1960.

With the onset of the process of economic liberalization, FERA, 1973, which was a regulatory law was repealed and in its place, effective 1st June, 2000, a new law – Foreign Exchange Management Act, 1999 (FEMA) came into operation. Further, in tune with the International Anti Money Laundering regime, Prevention of Money Laundering Act, 2002 (PMLA) was enacted, and entrusted for its enforcement to the Directorate, from 01.07.2005.

Presently, Directorate of Enforcement is a Multi Disciplinary Organization mandated with the task of enforcing the provisions of two special fiscal laws – Foreign Exchange Management Act, 1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA). 

The main functions of the Directorate:

• Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999 (FEMA)
• Investigate offences of money laundering under the provisions of Prevention of Money Laundering Act, 2002(PMLA) and to take actions of attachment and confiscation of property if the same is determined to be proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the persons involved in the offence of money laundering.

There are 156 offences under 28 statutes which are Scheduled Offences under PMLA.

• Processing cases of fugitive/s from India under Fugitive Economic Offenders Act, 2018. The objective of this Act is to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian Courts and to preserve the sanctity of the rule of law in India.
• Sponsor cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) in regard to contraventions of FEMA.
• Render cooperation to foreign countries in matters relating to money laundering and restitution of assets under the provisions of PMLA and to seek cooperation in such matters.
• Adjudicate Show Cause Notices issued under the repealed Foreign Exchange Regulation Act, 1973 (FERA) up to 31.5.2002 for the alleged contraventions of the Act