Enforcement Directorate (ED): What is Enforcement Directorate, know its functions, power and how it works

In news:

• The Enforcement Directorate or ED is in the news these days because ED is conducting raids on the homes and offices of some politicians or businessmen. The latest discussed case is that of Jharkhand Chief Minister (former) Hemant Soran. Often you can see questions related to all the important organizations of India in the examinations like their establishment, directors etc.

What is Enforcement Directorate? (What is Enforcement Directorate?)

• The Enforcement Directorate or ED is a multidisciplinary organization created by the Government of India to investigate economic crimes (money laundering) and violations of foreign exchange laws.

• This Directorate was established on May 01, 1956 as an enforcement unit under the control of the Department of Economic Affairs. In the year 1957, this unit was renamed as 'Enforcement Directorate'. It works like an economic intelligence agency of the Government of India.

The statutory functions of the Directorate include the enforcement of five Acts which are:

• Prevention of Money Laundering Act, 2002 (PMLA)
• The Foreign Exchange Management Act, 1999 (FEMA)
• The Fugitive Economic Offenders Act, 2018 (FEOA)
• The Foreign Exchange Regulation Act, 1973 (FERA) repealed
• Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)

1. 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 involving money laundering and for matters connected therewith or incidental thereto. The Enforcement Directorate is entrusted with the responsibility of enforcement of the provisions of PMLA by conducting investigations to trace the property derived from the proceeds of crime, temporarily attaching the property and prosecuting the offenders and ensuring confiscation of the property by the Special Court. .

2. The Foreign Exchange Management Act, 1999 (FEMA)

• It is a civil law enacted to consolidate and amend the laws relating to the facilitation of foreign trade and payments and to promote the orderly development and maintenance of the foreign exchange market in India. The Enforcement Directorate is entrusted with the responsibility of investigating suspected violations of foreign exchange laws and regulations, adjudicating and imposing penalties on violators.

3. The Fugitive Economic Offenders Act, 2018 (FEOA)

• This law was enacted to prevent economic offenders from evading the process of Indian law by fleeing the jurisdiction of Indian courts. This is a law under which the Directorate has been mandated to confiscate the properties of fugitive economic offenders who have fled out of India evading arrest and to make provisions for attaching their properties to the Central Government. .

4. Repealed The Foreign Exchange Regulation Act, 1973 (FERA)

• This law was made to control foreign payments in India and to utilize foreign exchange properly. It is not applicable at present but under the Act, ED takes action in case of violation of show cause notice issued till 31.05.2002.

5. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (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 in respect of violations of FEMA.

Historical background of ED?

• This Directorate was established on May 01, 1956, when an enforcement unit was formed under the control of the Department of Economic Affairs to prevent violations of exchange control statutes under the Foreign Exchange Regulation Act, 1947 (FERA, 1947).

Under which ministry and department does ED work? (Under which ministry and department ED works?)

• Initially ED was under the Department of Economic Affairs of the Ministry of Finance, but since 1960 it works under the control of the Department of Revenue of the Ministry of Finance, Government of India.

Who is the director of ED? (Who is the director of ED?)

• Rahul Navin

What is ECIR? (What is ECIR?)

• Enforcement Case Information Report (ECIR): The first official document filed by the Enforcement Directorate (ED) before starting its investigation is the Enforcement Case Information Report, also known as ECIR. Is known.

• Just as the police files a First Information Report (FIR) before starting investigation in any cognizable offence, similarly the ED files an ECIR when it receives information about the commission of the crime of money laundering.

• But it is not mandatory to share ECIR with the accused whereas First Information Report (FIR) is shared with the accused.

How did the term money laundering come into use? (How the term money laundering came into picture?)

Money laundering is the illegal process of making large amounts of money resulting from criminal activity such as drug trafficking or terrorist funding, but the money appears to come from legitimate sources. Money generated from criminal activity is considered dirty and the process of 'laundering' is meant to make it appear clean. This is where the term money laundering came into use. Money laundering is a serious financial crime commonly committed by white-collar and street level criminals. Most financial companies have Anti Money Laundering (AML) policies in place to detect and prevent these types of activities.