Context:
Delhi Chief Minister was arrested by the Enforcement Directorate (ED).
What is the issue?
- Arrested on charges of corruption and money laundering in the formulation and execution of Delhi’s scrapped excise policy.
Enforcement Directorate (ED):
- A multi-disciplinary organization premier financial investigation agency of the Government of India
- Mandate – Investigation of economic crimes and violations of foreign exchange laws.
- Functions under – Department of Revenue, Ministry of Finance
Evolution of ED:
- In 1956, an ‘Enforcement Unit’ was formed in the Department of Economic Affairs.
- It handled the Exchange Control Laws violations under Foreign Exchange Regulation Act of 1947 (later FERA 1973)
- In the year 1957, this Unit was renamed as ‘Enforcement Directorate’.
- In 1960, its administrative control was transferred from the Department of Economic Affairs to the Department of Revenue.
- It was regulated under Foreign Exchange Regulation Act (FERA) of 1973 (repealed later).
Structure of ED:
- Head – Director
- Appointed by – Centre
- Recommended by – High-level committee headed by the Central Vigilance Commissioner
- Tenure – 2 years (maximum 3 annual extensions)
Statutory functions of ED:
- Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA): Empowered to sponsor cases of preventive detention with regard to contraventions of FEMA
- Foreign Exchange Management Act, 1999 (FEMA): ED conducts investigation into suspected contraventions of foreign exchange laws and regulations.
- Prevention of Money Laundering Act, 2002 (PMLA): Executing the provisions of PMLA by conducting investigation to trace the assets derived from proceeds of crime.
- Fugitive Economic Offenders Act, 2018 (FEOA): ED 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.
- Foreign Exchange Regulation Act, 1973 (FERA): To adjudicate the Show-cause notices issued under this Act.
Differences between Central Bureau of Investigation (CBI) and ED:
| Central Bureau of Investigation (CBI) | Enforcement Directorate (ED) | |
| Nature | Not a statutory body | Statutory body |
| Ministry | Ministry of Personnel, Pension & Public Grievances | Department of Revenue under the Ministry of Finance |
| Acts governing | Derives powers from the Delhi Special Police Establishment Act of 1946 | Mainly from 2 acts: Foreign Exchange Management Act, 1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA) |
| Investigates | Anti-Corruption crimes and special crimes under IPC apart from economic crimes | Only economic crimes. Can carry out searches and confiscate assets |
| Economic Crimes | Investigates crime of corruption, economic offences | Investigates offences of money laundering and foreign exchange laws violation |
| Central Government’s role | Needs Central Government notification to initiate investigation | Does not need such notification |
Source: The Hindu
Previous Year Question
Consider the following organizations/bodies in India:
1. The National Commission for Backward Classes
2. The National Human Rights Commission
3. The National Law Commission
4. The National Consumer Disputes Redressal Commission
How many of the above constitutional bodies?
[UPSC Civil Services Exam – 2023 Prelims]
(a) Only one
(b) Only two
(c) Only three
(d) All four
Answer: (a)
Explanation: Among the organizations mentioned, only the National Commission for Backward Classes is a constitutional body.
