Directorate of Enforcement (ED)
GS-2 Mains
Short Notes or Revision Notes
Question : Examine the powers vested in the Directorate of Enforcement (ED) to investigate and act against violators of economic offenses.
About Directorate of Enforcement (ED)
- Established in 1956 under Department of Economic Affairs.
- A multi-disciplinary organization investigating:
- Money laundering offense
- Foreign exchange law violations
Statutory Functions
- Enforces Acts:
- Prevention of Money Laundering Act (PMLA) (2002)
- Traces assets from proceeds of crime.
- Attaches property and prosecutes offenders.
- Confiscates property by special court.
- Foreign Exchange Management Act (FEMA) (1999)
- Investigates suspected contraventions of foreign exchange laws.
- Imposes penalties on those who break the law.
- Fugitive Economic Offenders Act (FEOA) (2018)
- Attaches properties of economic offenders who fled India.
- Confiscates properties to the Central Government.
- Prevention of Money Laundering Act (PMLA) (2002)
Powers of ED
- Extensive powers to investigate and act against violators.
- Summon individuals for evidence or record production during investigations.
- Special power to confiscate disproportionate assets under PMLA.
Challenges
- Overburdened and lengthy investigations due to:
- Complex financial transactions
- Legal hurdles
- Need for coordination with other agencies
- Political interference.
- Lack of coordination between ED and other law enforcement agencies.
- Legal challenges:
- Delays in court proceedings
- Interpretation of legal provisions
- Limitations in legal framework
- International cooperation:
- Differences in legal systems
- Jurisdictional issues
- Diplomatic complexities
Way Ahead
- Strengthen institutional capacity of ED.
- Enhance coordination with other agencies.
- Ensure independence and autonomy of ED.
- Provide adequate resources and training to ED personnel.
- Reform legal framework and international cooperation mechanisms.
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