Enforcement Directorate [ED]

By : Neha Dhyani

Updated : Jun 15, 2022, 4:32

The Enforcement Directorate, also known as the Directorate General of Economic Enforcement (DGEE), is Indian statutory regulation and economic data organisation tasked with preventing financial crime by implementing economic laws.

The Enforcement Directorate [ED] is a multi-disciplinary body responsible for upholding the Foreign Exchange Management Act 1999 and FEMA and the Prevention of Money Laundering Act 2002 of PMLA.

About Enforcement Directorate [ED]

New Delhi, India, is the head office of ED. In addition, the Enforcement Directorate [ED] operates several regional offices across the country. The Director of Enforcement, an IRS (Indian Revenue Service) officer, leads the Enforcement Directorate [ED].

The Department of Revenue, Ministry of Finance and Government of India oversees the Enforcement Directorate [ED].

History of Enforcement Directorate

Enforcement Directorate dates to May 1, 1956, when the Economic Affairs Department established an 'Enforcement Unit' to oversee Exchange Control Law infractions under the Foreign Exchange Regulation Act of 1947 (FERA).

This unit's name was changed to the 'Enforcement Directorate' in 1957. By 1960, the Enforcement Directorate's command control was shifted to the Department of Revenue from the Department of Economic Affairs.

The Department of Personnel and Administrative Reforms also overlooked the Directorate for four years (1973-1977).

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Enforcement Directorate [ED] Composition

People from different agencies are a part of the Enforcement Directorate.

There are people from Income Tax Department, Excise Department, Police Force, etc.

Powers of the Enforcement Directorate

The Enforcement Directorate [ED] is in charge of enforcing these two laws -

  • The Foreign Exchange Management Act of 1999 (FEMA) is a civil statute that empowers officials to investigate alleged violations of the Foreign Exchange Laws and Regulations, adjudicate violations, and impose penalties on individuals found to have broken the law.
  • The Prevention of Money Laundering Act of 2002 (PMLA) is a criminal law that empowers authorities to conduct investigations to trace assets obtained from criminal proceeds, provisionally attach/confiscate such investments, and arrest and punish criminals proven to be involved in money laundering.

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Other Responsibilities of the Enforcement Directorate

Under the Fugitive Economic Offenders Act of 2018, the cases of fugitive/s from India are examined to preserve the sanctity of the rule of law in India by enacting measures to dissuade fugitive economic offenders from avoiding the Indian legal system by remaining beyond the jurisdiction of Indian courts.

In situations of FEMA violations, sponsor cases of preventive detention under the 1974 Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).

Cooperate with other countries in instances of money laundering and asset restitution under the PMLA's provisions, and seek cooperation in such matters.

With the onset of industrialisation 4.0 in India, the Enforcement Directorate [ED] is the need of the hour. It not only protects but also promotes fair trade, preventing economic crime. Within the purview of the enforcement directorate, the Directorate can penalise those who are guilty of infringement of exchange control laws. It can also take action against money launderers besides locating/confiscating assets.

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FAQs on Enforcement Directorate [ED]

Q.1 When was the Enforcement Directorate [ED] established?

The Enforcement Directorate [ED] was established in 1956.

Q.2 What are the two laws the Enforcement Directorate [ED] upholds under its purview?

The Enforcement Directorate [ED] is responsible for defending the Foreign Exchange Management Act (FEMA) of 1999 and the Prevention of Money Laundering Act (PMLA) of 2002.

Q.3 Who leads an Enforcement Directorate [ED]?

An Indian Revenue Service (IRS) Officer heads the Enforcement Directorate [ED]. The Department of Revenue, Ministry of Finance and Government of India oversees the Enforcement Directorate.

Q.4 Where is the headquarter of the Enforcement Directorate [ED]?

The Enforcement Directorate [ED] is headquartered in New Delhi.