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Enforcement Directorate UPSC NOTE

 What is ED and its role

  • The Enforcement Directorate (ED) in India plays a crucial role in safeguarding the country's financial health and combating economic crime.

  • Prevention of Money Laundering: The ED acts as the frontline agency against money laundering, investigating and prosecuting individuals and entities suspected of using illegal means to legitimize proceeds of crime

  • This includes activities like drug trafficking, corruption, and tax evasion.

  • Enforcement of Foreign Exchange Management Act (FEMA): The ED ensures compliance with FEMA regulations, which govern foreign exchange transactions in India

  • This involves investigating violations like unauthorized foreign exchange transactions, hawala transactions, and illegal remittances.

  • Combating Black Money and Tax Evasion: The ED plays a vital role in unearthing and tackling black money generation and tax evasion schemes. 

  • They utilize sophisticated investigation techniques and intelligence gathering to track down hidden assets and bring perpetrators to justice.

  • Asset Recovery: The ED works to recover assets acquired through illegal means, ensuring that ill-gotten wealth doesn't remain in the hands of criminals. 

  • This involves attaching and confiscating properties, freezing bank accounts, and pursuing international cooperation to repatriate illicit funds

  • Counterfeiting and Smuggling: The ED actively combats the menace of counterfeiting and smuggling, protecting India's economic interests and national security

  • They work closely with other law enforcement agencies to crack down on counterfeiting of currency and goods, as well as illegal import and export of prohibited items.

  • Liaison and International Cooperation: The ED plays a crucial role in international cooperation on matters related to economic crime

  • They maintain liaison with foreign counterparts, sharing intelligence and expertise to combat cross-border financial crime and money laundering activities.

  • Overall, the Enforcement Directorate serves as a vital watchdog, protecting India's financial integrity and ensuring a level playing field for legitimate businesses. 

  • Their work contributes significantly to promoting transparency, accountability, and economic stability in the country.

SC Intervention and outcome

  • The Supreme Court on Thursday called for a “pan-India mechanism” to determine whether political vendetta or vindictiveness is a motive behind the Union government unleashing the Enforcement Directorate (ED) on officials and Ministers in non-BJP-ruled States, and States then retaliating by arresting the Central agency’s local officers.

  • A Bench of Justices Surya Kant and K.V. Viswanathan said that Tamil Nadu should be the testing ground for the implementation of such a mechanism.

  • The Bench expressed concern about the fate of the country if States and Central agencies are engaged in a vindictive game of one-upmanship by filing cases and arresting each others’ officers.

  • The court was hearing a petition by the ED, represented by Solicitor-General Tushar Mehta, complaining that Tamil Nadu was not sharing details of its investigation into FIRs and complaints against Ministers, officials, and others in the State in cases of corruption, illegal sand mining, and disproportionate assets, among others.

  • The ED has also sought the transfer of a case of bribery against its officer, Ankit Tiwari, from the Tamil Nadu Directorate of Vigilance and Anti-Corruption (DVAC) to the CBI. 

  • He was allegedly caught accepting ₹20 lakh from a doctor in Dindigul.

  • Senior advocate Kapil Sibal, and Tamil Nadu Additional Advocate-General, senior advocate Amit Anand Tiwari, countered that the Centre was using the ED to “target” only certain non-BJP-ruled States. 

  • They alleged that the federal structure of the country has been jeopardised by the political vindictiveness on display.

  • We should explore a fair and transparent mechanism or a body which will look into the inter-State ramifications, especially when different parties are at the Centre and States, and keep intact the object of punishing the guilty while preventing vindictive arrest.

  • The court said that the mechanism should also ensure that the accused in genuine cases filed by the ED do not go scot-free by crying “political vendetta”.

  • Justice Viswanathan said that the Centre and Tamil Nadu need to consider this case only as a “trigger to evolve best practices… This kind of friction in a quasi federal set-up will cause hurt”.

  • The ED and CBI have detachments across India.

  • They have officers in every State.

  • We are not saying ED/CBI are vindictive or they are vindictive

  • But suppose, in a given scenario, if there is some vindictive action from their side as a tit-for-tat for what they perceive as a vindictive action from your side.

Tussle with states

  • Mr. Mehta said that the State of Tamil Nadu need not be bothered when the ED registers cases against individuals who happened to be senior Ministers. 

  • If there is a vindictive arrest by the ED

  • He pointed out that the ED would take cognisance of a case only if the predicate offences were scheduled in the Prevention of Money Laundering Act (PMLA).

  • Once we take cognisance, it is a statutory mandate under the PMLA that the agency, State or central, investigating the predicate offence, share all the details of the case with ED. 

  • Tamil Nadu is not sharing anything with us. 

  • The website showing the FIRs is blocked.

  • The ED have been forced to come to the Supreme Court. 

  • The court issued notice to Tamil Nadu in the case, which will be listed after two weeks.



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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Enforcement Directorate UPSC NOTE
Enforcement Directorate UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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