Enforcement Directorate – History, Functions, Powers and Composition – Free PDF Download

What are the Functions of the Directorate of Enforcement

• Is a multi-disciplinary organization mandated with investigation of offence of money laundering and violations of foreign exchange laws.

History

• Initially an ‘Enforcement Unit’ was formed in the Department of Economic Affairs for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947 (FERA ’47) in 1956.
• This Unit with Delhi as Headquarters was headed by a Director of Enforcement, assisted by an Officer drawn on deputation from Reserve Bank of India (RBI) and 03 Inspectors of Special Police Establishment.
• There were 02 branches – at Bombay and Calcutta.

• Recently, with the increase in number of cases relating to economic offenders taking shelter in foreign countries, the Government has passed the Fugitive Economic Offenders Act, 2018 (FEOA) and ED is entrusted with its enforcement with effect from 21st April, 2018.

Statutory Body-

• Directorate of Enforcement is given Statutory Recognition by the Central Government under Section 36 of the Foreign Exchange Management Act, 1999.

Composition

• Besides directly recruiting personnel, the Directorate also draws officers from different Investigating Agencies, viz., Customs & Central Excise, Income Tax, Police, etc. on deputation.

How to appoint ED Director?

• is appointed by the central government on the recommendation of a committee chaired by the Central Vigilance Commissioner and members comprising of Vigilance Commissioners, Home Secretary, Secretary DOPT and Revenue Secretary.

The 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.
• Violations Include-
• non-realization of export proceeds,
• “hawala transactions”,
• purchase of assets abroad,
• possession of foreign currency in huge amounts,
• non-repatriation of foreign exchange, foreign exchange violations

The Prevention of Money Laundering Act, 2002 (PMLA): 

• It is a criminal law enacted to prevent money laundering and
• to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.
• ED has been given the responsibility to enforce the provisions of the 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.

The Fugitive Economic Offenders Act, 2018 (FEOA): 

• This law was enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
• It is a law whereby Directorate is mandated to attach the properties of the fugitive economic offenders who have escaped from the India warranting arrest and provide for the confiscation of their properties to the Central Government.

The Foreign Exchange Regulation Act, 1973 (FERA):

• The main functions under the repealed FERA are to adjudicate the Show Cause Notices issued under the the said Act upto 31.5.2002 for the alleged contraventions of the Act which may result in imposition of penalties and to pursue prosecutions launched under FERA in the concerned courts.  

Sponsoring agency under 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.

OUR CORE VALUES

• Integrity : Integrity is our core requirement, displayed by
• Soundness of moral principle, honesty and sincerity
• Accountability: We are answerable for outcomes
• Commitment: Commitment means to us dedication, application, perseverance and a determination to achieve results.
• Excellence: We aim to excel in all that we do
• Impartiality: We aim to
• Be fair and reasonable in our investigations
• Pursue and reveal the truth

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