Enforcement Directorate

News: The Enforcement Directorate has transferred assets worth ₹8,441.50 crore to public sector banks that suffered losses to the tune of ₹22,585.83 crore due to frauds committed allegedly by Vijay Mallya, Nirav Modi and Mehul Choksi.

Background:

  • ED had taken up a money laundering probe which helped unearth a complex web of domestic and international transactions and stashing of assets abroad by the accused persons and their associates.
  • They had used dummy entities controlled by them for rotation and siphoning of the funds provided by the banks. But, All three accused had fled overseas.
  • Prosecution complaints were filed against all the three accused after completion of the investigation under the Prevention of Money Laundering Act.
  • The extradition of Mr. Mallya has been ordered by the Westminster Magistrates Court and confirmed by the U.K. High Court. The matter is pending with the U.K.’s Home Department for quite some time now.
  • The Westminster Magistrates Court had also ordered the extradition of Mr. Modi to India.
  • Choksi was recently found in Dominica.

About Enforcement Directorate:

  • The origin of this Directorate goes back to 1st May, 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 (FERA ’47).
  • In the year 1957, this Unit was renamed as ‘Enforcement Directorate’.
  • Presently, it is part of the Department of Revenue, Ministry of Finance.
  • The Organization is 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.
  • It processes cases of fugitive/s from India under Fugitive Economic Offenders Act, 2018.
  • It also sponsors cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA) in regard to contraventions of FEMA.
  • For the trial of an offence punishable under section 4 of PMLA, the Central Government (in consultation with the Chief Justice of the High Court), designates one or more Sessions Court as Special Court(s). The court is also called “PMLA Court”. Any appeal against any order passed by PMLA court can directly be filed in the High Court for that jurisdiction.