The functioning of the Enforcement Directorate
- The Enforcement Directorate (ED) is in the news now and often.
- It goes back to May 1, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA).
- The ED today is a multi-dimensional organisation investigating economic offences under the Prevention of Money Laundering Act (PMLA), Fugitive Economic Offenders Act, Foreign Exchange Management Act and FERA.
Powers of ED
- The PMLA was brought in to prevent parking of money outside India and to trace out the layering and the trail of money. The ED got its power to investigate these crimes under Sections 48 and 49 of the Act.
- Whenever any offence is registered by a local police station, which has generated proceeds of crime over and above ₹1 crore, the ED steps in. The ED can also carry out search (property) and seizure (money/documents) if it suspects money has been laundered.
- A person shall be guilty of the offence of money-laundering, if such person is found to have directly or indirectly attempted to indulge or knowingly assist a party involved in one or more of the following activities — concealment; possession; acquisition; use; or projecting as untainted property; or claiming as untainted property in any manner.
- If money has been laundered abroad, the PMLA court (constituted as per the Act) has the right to send a letter of rogatory under Section 105 (reciprocal arrangements regarding processes) of the Code of Criminal Procedure. The said government can then share the documents and evidence needed by the agency.
Can the ED investigate cases of money laundering retrospectively?
- Since the PMLA was enacted only in 2005, any ill-gotten property acquired before the year 2005 has no case under PMLA.
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