The Directorate of Enforcement is a multi-disciplinary organization tasked with looking into money laundering claims and international trade law infractions.
The ‘Enforcement Unit’ at the Department of Economic Affairs was established on May 1, 1956, to deal with violations of Exchange Control Laws under the Foreign Exchange Regulation Act, 1947. In 1957, the unit was renamed as ‘a Confirmation Team’. In place of the Secretary of State of India, Sanjay Kumar Mishra, the Chief Commissioner of Income Taxes in New Delhi, has been named the ED head.
- It began as an ‘Enforcement Unit’ under the Department of Economic Affairs in 1956, but its administration was shifted to the Department of Revenue in 1960.
- The Enforcement Directorate is presently managed by the Ministry of Finance’s Department of Revenue (ED).
- The ED is based in New Delhi and has numerous regional offices across the country.
- The Director of Enforcement, an IRS officer, is in charge (Indian Revenue Service).
Functions of the Enforcement Directorate
- The Prevention of Money Laundering Act, 2002 (PMLA): A criminal law enacted to prevent money laundering and provide for the seizure of property seized, or involved, in money laundering and related matters. The ED has been tasked with enforcing the PMLA’s requirements by conducting investigations into the purchase of assets acquired from illicit funds, the interim attachment of assets, and ensuring that perpetrators are prosecuted, and property is confiscated by the Special Court.
- The Foreign Exchange Management Act of 1999 (FEMA) was enacted as a citizenship law to consolidate and revise laws relating to the facilitation of foreign exchange and payments and support the development and preservation of the Indian foreign exchange market. The ED is in charge of investigating charges of infractions of foreign trade laws and regulations and prosecuting and fining those found guilty.
- Refugee Economic Crimes Act, 2018 (FEOA): This law was enacted to prevent economic offenders from escaping India’s legal process by staying outside the courts of India. It is a law by which the Office of the Director is authorized to attach the buildings of refugee economic criminals who escape to India that authorize the arrest and provide for the seizure of their property by the Central Government.
- The Foreign Exchange Regulation Act, 1973 (FERA): Key functions under FERA abolished to adjudicate the Statements of Reason issued under this Act dated 31.5.2002 for alleged breaches of the Act, which may result in the imposition of fines and pursuit of prosecution introduced under FERA in the relevant courts.
- Funding agency under COFEPOSA: Under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), this unit is empowered to fund preventive detention cases related to FEMA violations.