The Enforcement Directorate of the Directorate General of Economic Enforcement is Indian law enforcement and economic intelligence body responsible for enforcing economic laws and combating economic crime.
It was established to deal with violations of the Exchange Control Law of the Foreign Exchange Regulation Act of 1947.
It was established in 1956 as an “Enforcement Unit” under the Department of Economic Affairs, but it was transferred to the Department of Revenue for administration in 1960.
In 1957, it was renamed the Enforcement Directorate (ED). The Enforcement Directorate (ED) is now managed by the Ministry of Finance’s Department of Revenue.
The ED is headquartered in New Delhi and has numerous regional offices throughout the country. It is led by an IRS officer, the Director of Enforcement.
History of Enforcement Directorate (ED)
The Enforcement Directorate is a specialized financial investigative agency under the Department of Revenue, Ministry of Finance, of the Government of India. On May 1, 1956, this Directorate was created. It had two branches in Bombay and Calcutta, as well as a headquarters in Delhi.
The Directorate was managed by the Department of Personnel and Administrative Reforms for four years (from 1973 to 1977). It had two branches in Bombay and Calcutta, as well as a headquarters in Delhi.
Objectives of Enforcement Directorate (ED)
- Implementation of two of India’s significant financial Acts—the Foreign Exchange Management Act (FEMA), 1999 and the Prevention of Money Laundering Act (PMLA), 2002.
- To direct examinations about the speculated contradictions or encroachments under the arrangements of the FEMA, to force reasonable punishments on the blamed guilty party.
- Under PMLA 2002, to direct examinations, follow, connect, and additionally seize the resources identified with the monetary wrongdoing, and to capture and indict the guilty parties.
Composition of Enforcement Directorate (ED)
The Enforcement Directorate enlists a portion of its officials straightforwardly while some others are delegated from other State offices on the nomination, similar to the Income Tax, Excise, divisions, and so forth.
The officials are from the Indian Administrative Services (IAS), Indian Police Service (IPS), Indian Revenue Service (IRS), Indian Corporate Law Service (ICLS), and so forth.
Legislations Monitored by the Enforcement Directorate (ED) and its Power
- Foreign Exchange Management Act, 1999: The Act, established in 1999, was acquainted with a point with direct unfamiliar trade, exchange, its turn of events, and support in India. The Act proclaims unfamiliar trade offenses to be considered offenses. It is considerate law with semi-legal forces. The Enforcement Directorate has executed this law since the year 2000.
- Prevention of Money Laundering Act, 2002: The Act was ordered in 2002 yet became effective on July 1, 2005, when it was given over to the ED for its execution. It manages the control of illegal tax avoidance, holding onto the property obtained from the laundered cash of the individual charged, and different guidelines and punishments. It is criminal law.
The Enforcement Directorate goes about as an Intelligence and Enforcement organization for these two demonstrations. It works in a joint effort with the Financial Intelligence Unit India (FIU-IND) to handle tax evasion.
- Fugitive Economic Offenders Act, 2018: This Act was set up under the arrangements of the Prevention of Money Laundering Act, 2002. The FEOA 2018 awards capacity to any uncommon court to take and hold onto the properties of wrongdoers charged over Rs 100 crores, who likewise attempt to avoid legal procedures.
Powers of Enforcement Directorate
- Powers of the Officers: The chief forces of the Officers of the ED are to research in instances of illegal tax avoidance, start the procedures of connection of property, and dispatch arraignment against the denounced.
- Powers to Investigating Officers: Under the Prevention of Money Laundering Act, 2002, the Investigating Officers of the ED have the accompanying forces:
- They can connect any property or the worth of the property, purchased with the laundered cash straightforwardly or by implication, as a crime.
- They can look and review the spot and records identified with the property.
- They can capture the denounced, bring, and record the assertion of individuals identified with the charged.
- Powers of the Authority: The ED has the power to label fugitives or documents with identifying marks. They can compile an inventory and/or record the accused’s and witnesses’ statements.
- Powers of Officers during the search: The officers or authorities of the ED have the authority to enter the accused’s residence, inspect, seize, or freeze it, question witness accounts, and so on.
- Powers of authorities during summons:
- Regional, zonal, and sub-zonal directors of the Enforcement Directorate have the power to summon anyone involved in financial fraud, who is required to attend the meeting in person or through officers.
- These are judicial proceedings and are governed by Section 45 of the Indian Penal Code.
Role of Enforcement Directorate
As stated earlier, the Enforcement Directorate’s primary duties are to administer the monetary Acts FEMA 1999 and PMLA 2002. The ED’s other responsibilities under these Acts are mentioned below:
- To carry out inquiries into alleged violations of the Foreign Exchange Management Act of 1999.
- These offenses can result in ED arrests, settlements, or punishments that are up to three times the quantity of money connected to the case.
- Under the provisions of the Prevention of Money Laundering Act,2002, perform and oversee investigations into alleged money laundering topics.
- The Enforcement Directorate has the authority to confiscate or seize property associated with or bought with laundered funds, as well as to take steps such as attachment and freezing of the property.
- Officers from the ED may arrest or prosecute the suspect or accused.
- Under the repealed Foreign Exchange Regulation Act of1973, the Enforcement Directorate may also issue show-cause notices, levy fines, and convict in Special Courts in cases of money laundering or fraud.
- Under the Fugitive Economic Offenders Act, 2018, the Enforcement Directorate has been granted the authority to work with Indian and foreign governments to track down and prosecute the offender.
- The Enforcement Directorate assists in the investigation of cases brought under the 1974 Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).
- Under the provisions of the PMLA and the FEOA, the ED works with other countries to prevent and regulate money laundering, for example, by entering into contracts with them.
The Directorate of Enforcement in our government is committed to the advancement of our country. After discussing its structure and working with its functions and forces, we can now assume that it is working with specific unique objects. This is a government-backed organization in India tasked with combating and preventing money laundering. It has a good and consistent vision for the country. A significant number of officers from different agencies assist this organization. They use the authority given to them by an organization to investigate and settle the matter through the adjudication process, as well as perform several other functions. Its goal is to assist our economy is growing. It punishes money-laundering fraudsters as well as those who violate FEMA and PMLA provisions. Its efforts to monitor and prevent money laundering, as well as its role as the guardian of two critical laws or actions, will assist India in improving and growing.