Director of Enforcement Directorate (ED)

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    1833

    Source: GS3/ Security agencies

    In News

    • IRS officer Rahul Navin was appointed in-charge Director of the Enforcement Directorate (ED) replacing incumbent Sanjay Kumar Mishra.

    Directorate of Enforcement (ED)

    • The Directorate of Enforcement is a multi-disciplinary organization mandated with investigation of offenses of money laundering and violations of foreign exchange laws. 
    • It functions under the Department of Revenue of the Ministry of Finance.
    • The origin of this Directorate goes back to 1st May, 1956, when 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 1957, this Unit was renamed as ‘Enforcement Directorate’, and another branch was opened at Madras (now Chennai).
    • In 1960, the administrative control of the Directorate was transferred from the Department of Economic Affairs to the Department of Revenue.

    Functions of ED

    The statutory functions of the Directorate include enforcement of following Acts:

    • Prevention of Money Laundering Act, 2002 (PMLA): 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.
    • Foreign Exchange Management Act, 1999 (FEMA): 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.
    • Fugitive Economic Offenders Act, 2018 (FEOA): It is a law whereby the Directorate is mandated to attach the properties of the fugitive economic offenders who have escaped from India warranting arrest and provide for the confiscation of their properties to the Central Government.
    • 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.

    Foreign Exchange Regulation Act

    • Foreign Exchange Regulation Act, 1947 was enacted initially for a period of ten years on a temporary basis. However, 10 years of economic development did not ease the foreign exchange constraint, FERA permanently entered the statute book in the year 1957. 
    • Subsequently, Foreign Exchange Regulation Act, 1947 was replaced by the Foreign Exchange Regulation Act, 1973 (FERA, 1973),which came into force with effect from January 1, 1974.
    • FERA, 1973 came into force, for regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency, for the conservation of the foreign exchange resources of the country and the proper utilization thereof in the interests of the economic development of the country.
    • Keeping in view the changed environment during 1991 LPG reforms, the Foreign Exchange Management Act (FEMA) was enacted in 1999 to replace FERA. FEMA became effective from June 1, 2000.

    Source: TH