Directorate of Enforcement is a Multi Disciplinary Organization mandated with the task of enforcing the provisions of two special fiscal laws –
Foreign Exchange Management Act, 1999 (FEMA) and
Prevention of Money Laundering Act, 2002 (PMLA).
Besides directly recruiting personnel, the Directorate also draws officers from different Investigating Agencies, viz., Customs & Central Excise, Income Tax, Police, etc. on deputation.
Directorate of Enforcement – Background
The origin of this Directorate goes back to 1st May, 1956, when an ‘Enforcement Unit’ was formed, in Department of Economic Affairs, for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947
In the year 1957, this Unit was renamed as ‘Enforcement Directorate’, and another branch was opened at Madras. The administrative control of the Directorate was transferred from Department of Economic Affairs to Department of Revenue in 1960.
With the passage of time, FERA’47 was repealed and replaced by FERA, 1973. For a short period of 04 years (1973 – 1977), the Directorate remained under the administrative jurisdiction of Department of Personnel & Administrative Reforms.
With the onset of the process of economic liberalization, FERA, 1973, which was a regulatory law was repealed and in its place, effective 1st June, 2000, a new law – Foreign Exchange Management Act, 1999 (FEMA) came into operation. Further, in tune with the International Anti Money Laundering regime, Prevention of Money Laundering Act, 2002 (PMLA) was enacted, and entrusted for its enforcement to the Directorate in 2005
Carved in the role of a multi-dimensional Organisation, the Directorate enforces two laws; FEMA, a Civil Law having quasi judicial powers, for investigating suspected contraventions of the Exchange Control Laws and Regulations with the powers to impose penalties on those adjudged guilty and PMLA, a Criminal Law, whereby the Officers are empowered to conduct enquiries to locate, provisionally attach/confiscate assets derived from acts of Schedules Offences besides arresting and prosecuting the Money Launderers.
Directorate of Enforcement – Functions
Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999(FEMA) which came into force with effect from 1.6.2000. Contraventions of FEMA are dealt with by way of adjudication by designated authorities of ED and penalties upto three times the sum involved can be imposed.
Investigate offences of money laundering under the provisions of Prevention of Money Laundering Act, 2002(PMLA) which came into force with effect from 1.7.2005 and to take actions of attachment and confiscation of property if the same is determined to be proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the persons involved in the offence of money laundering.
Adjudicate Show Cause Notices issued under the repealed Foreign Exchange Regulation Act, 1973 (FERA) upto 31.5.2002 for the alleged contraventions of the Act which may result in imposition of penalties. Pursue prosecutions launched under FERA in the concerned courts.
Sponsor cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA) in regard to contraventions of FEMA.
Render cooperation to foreign countries in matters relating to money laundering and restitution of assets under the provisions of PMLA and to seek cooperation in such matters.