Foreign Exchange Management Act, 1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA). irectorate of Enforcement is a multi disciplinary organization mandated with the task of enforcing the provisions of two special fiscal laws –
- The origin of this Directorate goes back to 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.
- ED enforces 2 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.
. PMLA, a criminal law, whereby the officers are empowered to conduct enquiries to locate, provisionally attach/ confiscate assets derived from acts of scheduled offences besides arresting and prosecuting the money launderers.
- The Directorate is under the administrative control of the Department of Revenue (Ministry of Finance) for operational purposes.
The policy aspects of the FEMA, its legislation and its amendments are within the purview of the Department of Economic Affairs.
Policy issues pertaining to PML Act, however, are the responsibility of the Department of Revenue.
- The Directorate has 10 zonal offices each of which is headed by a deputy director and 11 sub zonal offices each of which is headed by assistant directors.
. To collect, develop and disseminate intelligence relating to violations of FEMA, 1999, the intelligence inputs are received from various sources such as central and state Intelligence agencies, complaints.
. To investigate suspected violations of the provisions of the FEMA, 1999 relating to activities such as “hawala” foreign exchange racketeering, non-realization of export proceeds, non-repatriation of foreign exchange and other forms of violations.
. To undertake survey, search, seizure, arrest and prosecution action against offenders of PMLA offence.
. To provide and seek mutual legal assistance to/ from contracting states in respect of attachment/ confiscation of proceeds of crime as well as in respect of transfer of accused persons under PMLA.