[Opinion] Enforcement Directorate & its Powers under FEMA, 1999, PMLA, 2002 and FEOA, 2018

Lekshmi N. – [2023] 150 taxmann.com 378 (Article)

Knock Knock

Who’s there?

ED -for investigation

ED Who?

Go through the below mentioned briefs and understand Who’s Who!

Who’s ED?

The investigation of economic crimes and infractions of foreign currency legislation is the responsibility of the Directorate of Enforcement, also known as the ED. This Directorate was first established on May 1st, 1956. The Department of Economic Affairs established the “Enforcement Unit” to handle Exchange Control Law infractions under the Foreign Exchange Regulation Act, 1947 (FERA ’47). This unit, which had Delhi as its base of operations, was led by a Legal Service Officer serving as Director of Enforcement, with assistance from three Special Police Establishment Inspectors and an Officer on appointment from the Reserve Bank of India (RBI). There were two locations: Calcutta and Bombay.

This unit was renamed the “Enforcement Directorate” in 1957, and a second branch was established in Madras. The Department of Economic Affairs turned over management of the Directorate to the Department of Revenue in 1960. With time, FERA’47 was repealed and FERA, 1973 was put in its stead. The Directorate remained under the administrative control of the Department of Personnel & Administrative Reforms for a brief period of four years (1973–1977). Currently, the Department of Revenue, Ministry of Finance, Government of India, has administrative jurisdiction over the Directorate.

The nexus between ED and the Acts

FERA, 1973, a regulatory law, was repealed with the start of the economic liberalisation movement, and in its substitute, the Foreign Exchange Management Act, 1999 (FEMA), went into effect on June 1st, 2000.

The Prevention of Money Laundering Act, 2002 (PMLA) was also passed in accordance with the International Anti-Money Laundering framework, and ED was given responsibility for its enforcement beginning on July 1st, 2005.

The government passed the Fugitive Economic Offenders Act, 2018 (FEOA), and ED is responsible for its enforcement beginning on April 21, 2018, in response to an upsurge in instances involving economic offenders seeking refuge in foreign nations.

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