Enforcement Directorate

Enforcement Directorate
 

News: The Supreme Court on Monday said it might revisit its 2021 ruling that the tenure of a superannuated officer may be extended only in exceptional circumstances.
 

What is the issue?

o The tenure for directors of CBI and ED is two years. However, in November 2021, the President promulgated two ordinances allowing the Centre to extend the tenures from two years to up to five years.
o So, now they can be given three annual extensions. The Supreme Court had previously upheld this and allowed the extension of ED’s chief Sanjay Kumar Mishra, but said that such extension should be done in rare and exceptional cases and for a short period.
o The government recently extended tenure of ED chief citing a pending review by the Financial Action Task Force and that Mishra would not remain in service after his term comes to an end in November. This has been challenged in SC.
 

About ED:

o The Directorate General of Economic Enforcement (Enforcement Directorate) is a law enforcement and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.
o The Enforcement Directorate (ED) is administered by the Department of Revenue under the Ministry of Finance.
o HQ – Delhi and has 5 regional offices around the country.
o It is headed by the Director of Enforcement, who is an IRS officer (Indian Revenue Service).
 

Functions:

o Investigating violations of Foreign Exchange Management Act (FEMA) laws and provisions.
o Investigating offences of Prevention of Money Laundering Act, 2002 (PMLA) laws and provisions.
o Processing cases of fugitive/s from India under the Fugitive Economic Offenders Act, 2018.
o Sponsoring cases of Preventive Detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) with respect to FEMA violations.
o Rendering cooperation to foreign countries in matters related to money laundering and restoration of assets under the PMLA provisions.
 

Issues with ED and PMLA:

o The Enforcement Case Information Report (ECIR) is not given to the accused and the ED lacks clarity in selecting cases to investigate.
o The ED has been assigned almost blanket powers under PMLA for searching, seizing, investigating, and attaching assets considered to be proceeds of crime.
o Low conviction rate. For example, Between 2005 and 2013-14, there were zero convictions, and between 2014-15 and 2021-22, only 23 cases were under conviction out of 888 cases registered.
o Observation of Political biases as those jumping ship to ruling party have been given clean chits, ED has not acted or slowed down proceedings against them.