The Directorate General of Economic Enforcement, established in the year 1956, has its headquarters in New Delhi along with other regional offices all over the country. It is a law enforcement and economic intelligence agency. Its responsibility includes enforcing economic laws and regulating economic crime in India.
It was formed for handling violations of Exchange Control Law under the Foreign Exchange Regulation Act, 1947. While it was initially established under the control of the Department of Economic Affairs in 1956, it now forms part of the Department of Revenue and is under their administrative control since 1960 for operational purposes.
The Directorate of Enforcement is a multidisciplinary institution tasked with enforcing the terms of two special fiscal laws: the Foreign Exchange Management Act (FEMA) of 1999 and the Prevention of Money Laundering Act (PMLA) of 2002. Apart from directly recruiting people, the Directorate also derives officers from several Investigating Agencies, such as Customs and Central Excise, Income Tax, and Police.
After receiving government clearance on March 11, 2011, the Directorate underwent a substantial restructuring, increasing its force to 2067 officers from 758, while also increasing the number of its offices from 21 to 49 across India. However, work is still being done to ensure that the entire workforce is available and that all 49 offices are operational.
The origins of this Directorate can be traced back to May 1, 1956, when the Department of Economic Affairs established an & lsquo Enforcement Unit' to handle Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA), 1947. This Unit was led by a Legal Service Officer as Director of Enforcement, assisted by an Officer on deputation from RBI, as well as three Special Pound Inspectors. This unit was renamed the & lsquo Enforcement Directorate' in 1957, and a Madras branch was established. In 1960, the Directorate's administrative supervision was transferred from the Department of Economic Affairs to the Department of Revenue. FERA, 1947 was repealed and replaced by FERA, 1973 as time passed. The Directorate was under the administrative jurisdiction of the Department of Personnel and Administrative Reforms for four years (1973& ndash 1977).
Legislations enforced by the Enforcement Directorate
FERA, 1973, a regulatory law, was repealed with the start of the economic liberalization movement, and in its place, the Foreign Exchange Management Act, 1999 went into force on June 1, 2000. In addition, following the international anti-money laundering framework, the Prevention of Money Laundering Act, 2002 was adopted and transferred to the Directorate for enforcement on July 1, 2005.
The Directorate, which was carved out of the role of a multi-dimensional organization, enforces two laws: FEMA, a Civil Law with quasi-judicial powers, for investigating suspected contraventions of the Exchange Control Laws and Regulations, with the power to impose penalties on those found guilty, and PMLA, a Criminal Law, whereby the Officers are empowered to conduct inquiries to locate, provisionally attack, and arrest those found guilty.
Organizational Structure of the Enforcement Directorate
The Enforcement Directorate is headed by the Director of Enforcement. Its five regional offices, situated in Mumbai, Chandigarh, Kolkata, Chennai, and Delhi are headed by Special Directors of Enforcement.
Zonal offices of the Directorate are headed by a Joint Director. Further, the sub-zonal offices are headed by a Deputy Director.
It is an investigation agency and deals in matters related to economics and finance.
It forms part of the Department of Revenue of the Ministry of Finance.
It primarily deals with FEMA and PMLA.
It has its own courts and appellate tribunals for trials.
It adjudicates matters through the provisions in the Acts.
Powers of the Enforcement Directorate
1. Powers of the Officers: The primary powers of the ED Officers include investigating cases of money laundering, attaching property, and prosecuting those who are found guilty of committing an offense under the Acts.2. Powers of Investigating Officers: Under the Prevention of Money Laundering Act, 2002, an Investigating Officer can:
Attach any property purchased with laundered money,
Search or examine the area as well as the records of the property,
Arrest the accused, summon witnesses, and record their statements.
3. Powers during the search: The ED Officers and authorities have the power to enter the property of the accused, search, confiscate, or freeze it. They may also investigate persons connected with the property.4. Power of summons: The regional, zonal, or sub-zonal Directors of the Enforcement Directorate have the power to issue summons to a person involved in a financial crime.
Its basic functions include enforcing economic laws such as the Foreign Exchange Management Act (FEMA), 1999, and certain provisions of the Prevention of Money Laundering Act (PMLA). The Enforcement Directorate is entrusted with the work related to the investigation and prosecution of cases under Prevention of Money Laundering and has been assigned to the ED as well.
Investigating FEMA cases: The designated ED Officials investigate and adjudicate violations under FERA and FEMA. Violations under FEMA may include non-realization of export earnings, foreign exchange racketeering, and non-repatriating foreign exchange. A violation under these provisions is punishable by an arrest by the Enforcement Directorate, settlement, or imposition of a penalty up to three times the sum involved.
Investigating cases under the Prevention of Money Laundering Act: The Enforcement Directorate is entrusted with the power to attach the assets of the accused found guilty or search, seize, or freeze the property of the accused. Attaching the assets means prohibiting the transfer, converting, or moving of property. The offenses covered under PMLA are criminal in nature.
Handling cases of fugitives from India: The Fugitive Economic Offenders Act, 2018 prohibits economic offenders who choose to stay outside the country's jurisdiction to protect themselves from evading the law of the country and preserve its justice system. Under the Act, the ED has been conferred with the power to cooperate with the Government of India and foreign governments to trace and arrest the guilty.
Cooperating with foreign countries: ED offers cooperation to foreign countries where a matter relates to money laundering or restoring assets under the PMLA provisions. Section 56 of the PMLA enables the Government of India to enter into an agreement with any other country to enforce the provisions of the Act.
The Enforcement Directorate also recommends and processes cases for preventive detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).
Why do you need a lawyer?
Any successful defense, whether civil or criminal, is based on a sound strategy. It is significant to lay down an effective way to counter the prosecution's case which can only be done with the help of a criminal lawyer. A case in the hands of the Enforcement Directorate can be extremely complicated and a lawyer well-versed with civil and criminal laws will enable the accused to defend their case effectively. Therefore, it is exceedingly significant for an accused to contact a lawyer as soon as they are charged with an offense under either Act.Advocate Jaspreet Singh Rai provides service in various fields of law including civil and criminal law. With 18 years of experience in the field of law, he has provided advisory and legal consultancy services to numerous clients. He also specializes in matters pertaining to corruption and CBI cases.
1. “ My brother was falsely accused of money laundering when he obtained a large amount of money as a part of his income. However, a false FIR alleging that the money was in fact obtained from a crime led to an investigation by the ED. Only after consulting with a lawyer were we able to defend my brother in the case and get a favorable outcome.”
-Mr. Om Khanna
2. “ I was charged with money laundering and as a result, the ED attached my residential property. I immediately contacted a lawyer from LawRato.com who developed an effective defense for my case and enabled me to get my property back. The case is still pending, but with the help of my lawyer I have been able to defend myself in the money laundering case and secured substantial evidence to present in court.”
-Mrs. Mira Bhatt
3. “ My sister was falsely charged with violating the FEMA Act. I immediately consulted a civil lawyer who helped me understand the technicalities of the law. He helped my sister in defending her case and she was saved from paying a hefty amount of penalty for the offense.”
-Ms. Sushila Sibal
What is the Enforcement Directorate?
The Directorate General of Economic Enforcement, established in the year 1956, has its headquarters in New Delhi along with other regional offices all over the country. It is a law enforcement and economic intelligence agency. Its responsibility includes enforcing economic laws and regulating economic crime in India.
It was formed for handling violations of Exchange Control Law under the Foreign Exchange Regulation Act, 1947. While it was initially established under the control of the Department of Economic Affairs in 1956, it now forms part of the Department of Revenue and is under their administrative control since 1960 for operational purposes.
The Directorate of Enforcement is a multidisciplinary institution tasked with enforcing the terms of two special fiscal laws: the Foreign Exchange Management Act (FEMA) of 1999 and the Prevention of Money Laundering Act (PMLA) of 2002. Apart from directly recruiting people, the Directorate also derives officers from several Investigating Agencies, such as Customs and Central Excise, Income Tax, and Police.
After receiving government clearance on March 11, 2011, the Directorate underwent a substantial restructuring, increasing its force to 2067 officers from 758, while also increasing the number of its offices from 21 to 49 across India. However, work is still being done to ensure that the entire workforce is available and that all 49 offices are operational.
History of Enforcement Directorate
The origins of this Directorate can be traced back to May 1, 1956, when the Department of Economic Affairs established an & lsquo Enforcement Unit' to handle Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA), 1947. This Unit was led by a Legal Service Officer as Director of Enforcement, assisted by an Officer on deputation from RBI, as well as three Special Pound Inspectors. This unit was renamed the & lsquo Enforcement Directorate' in 1957, and a Madras branch was established. In 1960, the Directorate's administrative supervision was transferred from the Department of Economic Affairs to the Department of Revenue. FERA, 1947 was repealed and replaced by FERA, 1973 as time passed. The Directorate was under the administrative jurisdiction of the Department of Personnel and Administrative Reforms for four years (1973& ndash 1977).
Legislations enforced by the Enforcement Directorate
FERA, 1973, a regulatory law, was repealed with the start of the economic liberalization movement, and in its place, the Foreign Exchange Management Act, 1999 went into force on June 1, 2000. In addition, following the international anti-money laundering framework, the Prevention of Money Laundering Act, 2002 was adopted and transferred to the Directorate for enforcement on July 1, 2005.
The Directorate, which was carved out of the role of a multi-dimensional organization, enforces two laws: FEMA, a Civil Law with quasi-judicial powers, for investigating suspected contraventions of the Exchange Control Laws and Regulations, with the power to impose penalties on those found guilty, and PMLA, a Criminal Law, whereby the Officers are empowered to conduct inquiries to locate, provisionally attack, and arrest those found guilty.
Organizational Structure of the Enforcement Directorate
The Enforcement Directorate is headed by the Director of Enforcement. Its five regional offices, situated in Mumbai, Chandigarh, Kolkata, Chennai, and Delhi are headed by Special Directors of Enforcement.
Zonal offices of the Directorate are headed by a Joint Director. Further, the sub-zonal offices are headed by a Deputy Director.
Features of the Enforcement Directorate
It is an investigation agency and deals in matters related to economics and finance.
It forms part of the Department of Revenue of the Ministry of Finance.
It primarily deals with FEMA and PMLA.
It has its own courts and appellate tribunals for trials.
It adjudicates matters through the provisions in the Acts.
Powers of the Enforcement Directorate
1. Powers of the Officers: The primary powers of the ED Officers include investigating cases of money laundering, attaching property, and prosecuting those who are found guilty of committing an offense under the Acts.2. Powers of Investigating Officers: Under the Prevention of Money Laundering Act, 2002, an Investigating Officer can:
Attach any property purchased with laundered money,
Search or examine the area as well as the records of the property,
Arrest the accused, summon witnesses, and record their statements.
3. Powers during the search: The ED Officers and authorities have the power to enter the property of the accused, search, confiscate, or freeze it. They may also investigate persons connected with the property.4. Power of summons: The regional, zonal, or sub-zonal Directors of the Enforcement Directorate have the power to issue summons to a person involved in a financial crime.
Its basic functions include enforcing economic laws such as the Foreign Exchange Management Act (FEMA), 1999, and certain provisions of the Prevention of Money Laundering Act (PMLA). The Enforcement Directorate is entrusted with the work related to the investigation and prosecution of cases under Prevention of Money Laundering and has been assigned to the ED as well.
Investigating FEMA cases: The designated ED Officials investigate and adjudicate violations under FERA and FEMA. Violations under FEMA may include non-realization of export earnings, foreign exchange racketeering, and non-repatriating foreign exchange. A violation under these provisions is punishable by an arrest by the Enforcement Directorate, settlement, or imposition of a penalty up to three times the sum involved.
Investigating cases under the Prevention of Money Laundering Act: The Enforcement Directorate is entrusted with the power to attach the assets of the accused found guilty or search, seize, or freeze the property of the accused. Attaching the assets means prohibiting the transfer, converting, or moving of property. The offenses covered under PMLA are criminal in nature.
Handling cases of fugitives from India: The Fugitive Economic Offenders Act, 2018 prohibits economic offenders who choose to stay outside the country's jurisdiction to protect themselves from evading the law of the country and preserve its justice system. Under the Act, the ED has been conferred with the power to cooperate with the Government of India and foreign governments to trace and arrest the guilty.
Cooperating with foreign countries: ED offers cooperation to foreign countries where a matter relates to money laundering or restoring assets under the PMLA provisions. Section 56 of the PMLA enables the Government of India to enter into an agreement with any other country to enforce the provisions of the Act.
The Enforcement Directorate also recommends and processes cases for preventive detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).
Why do you need a lawyer?
Any successful defense, whether civil or criminal, is based on a sound strategy. It is significant to lay down an effective way to counter the prosecution's case which can only be done with the help of a criminal lawyer. A case in the hands of the Enforcement Directorate can be extremely complicated and a lawyer well-versed with civil and criminal laws will enable the accused to defend their case effectively. Therefore, it is exceedingly significant for an accused to contact a lawyer as soon as they are charged with an offense under either Act.Advocate Jaspreet Singh Rai provides service in various fields of law including civil and criminal law. With 18 years of experience in the field of law, he has provided advisory and legal consultancy services to numerous clients. He also specializes in matters pertaining to corruption and CBI cases.
Testimonials
1. “ My brother was falsely accused of money laundering when he obtained a large amount of money as a part of his income. However, a false FIR alleging that the money was in fact obtained from a crime led to an investigation by the ED. Only after consulting with a lawyer were we able to defend my brother in the case and get a favorable outcome.”
-Mr. Om Khanna
2. “ I was charged with money laundering and as a result, the ED attached my residential property. I immediately contacted a lawyer from LawRato.com who developed an effective defense for my case and enabled me to get my property back. The case is still pending, but with the help of my lawyer I have been able to defend myself in the money laundering case and secured substantial evidence to present in court.”
-Mrs. Mira Bhatt
3. “ My sister was falsely charged with violating the FEMA Act. I immediately consulted a civil lawyer who helped me understand the technicalities of the law. He helped my sister in defending her case and she was saved from paying a hefty amount of penalty for the offense.”
-Ms. Sushila Sibal
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Advocate Jaspreet Singh Rai provides service in various fields of law including civil and criminal law. With 18 years of experience in the field of law, he has provided advisory and legal consultancy services to numerous clients. He also specializes in matters pertaining to corruption and CBI cases.
Greater Kailash - 1, Delhi
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