Why in the News?
Tamil Nadu Ex-Minister Senthil Balaji's custodial interrogation by the
ED under the Prevention of Money laundering act (PMLA) has been upheld by the Madras
HC.
Directorate of Enforcement (ED):
1)
Established
in the year 1956 with headquarters in New Delhi.
2)
Works
under the Administrative control of the Department of Revenue, Ministry of
Finance.
3)
Appointment:
Officers are directly drawn from among officers of other investigation
agencies.
Tenure: Two years- The term of Directors can be extended from 2-5
years through a maximum of three annual extensions.
The statutory functions of ED include,
1.
Prevention
of Money Laundering Act, 2002 (PMLA)
a)
To
enforce provisions of the criminal law- PMLA and conduct investigations to
trace assets arising from the proceeds of the crime or related thereto.
b)
To
ensure prosecution of offenders, confiscate or provisionally attach property of
the offenders.
c)
To
carry out survey, search, seizure, arrest, prosecution,etc. against PMLA
offenders.
2.
The
Foreign Exchange Management Act, 1999 (FEMA)
a)
A
civil law relating to facilitating external trade and payments and maintenance
of foreign exchange markets in India.
b)
ED
has to conduct investigation into alleged violations of foreign exchange laws
and regulations.
c)
To
adjudicate and impose penalties on those convicted of contravention of the law.
3.
The
Fugitive Economic Offenders Act, 2018 (FEOA):
a)
ED
is obliged to attach the properties of the fugitive economic offenders against
whom a warrant of arrest is issued but is evading prosecution by remaining
outside the jurisdiction of Indian courts.
b)
ED has the power to confiscate their
properties to the Central Government.
c)
Conservation
of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA)
d)
To
recommend cases for preventive detention under the contraventions of COFEPOSA
and FEMA.
Issues associated with functioning of the ED:
1.
Misuse
of wide discretionary powers allocated to the ED
·
Minor
cases are booked under PMLA negating its primary intent of combating drug
trafficking.
2.
Functional
opacity
·
Lack
of clarity on ED's selection of cases to investigate and filing of the
Enforcement Case Information Report (ECIR) equivalent of FIR, which is not
produced to the accused.
3.
High
under-trials and slow pace of prosecution.
·
PMLA
scorecard: Of total 1,118 cases filed since 2005, trial over in only 36,
convictions in 20.
4.
Violation
of Individual's fundamental rights.
·
The
statutory basis of ED functions violated the fundamental rights of the Right to
liberty (Art 21) and right against self-incrimination(Art 20) of the
constitution.
Reforms has to be brought about in
dealing with expeditious settlement of cases, wise use of discretionary powers
of ED by enforcing accountability and to foster confidence among the public
that ED actions are non-political.
