Established in 1956, an all-powerful multi-disciplinary law enforcement agency Enforcement Directorate (“ED”) headquartered at New Delhi have five regional offices situated in Mumbai, Chennai, Chandigarh, Kolkata, and Delhi.  ED deriving its power from the Prevention of Money Laundering Act, 2002 (“PMLA”) and Foreign Exchange Management Act, 1999 (“FEMA”) (erstwhile Foreign Exchange Regulation Act of 1947) plays a pivotal role in the Government’s probe for curbing economic offence of money laundering, illegal foreign exchange transactions, and other financial crimes. The complexities associated with ED matters and the arduous effects of it makes it crucial to get the virtuoso legal guidance engaging the best ED lawyers in India since inception.

Offences under ED:

ED can exercise wide-ranging powers which includes conducting investigations, issuing notices, freezing assets, attach properties, initiating prosecution and even initiate criminal proceeding against those involved in money laundering and other economic offenses which fall into the category of predicate or scheduled offences. The schedule to the PMLA, lists specific offences under various Acts that are considered scheduled offences or predicate offences which may terrorism, human trafficking, narcotics smuggling etc. Only the predicated or scheduled offences under PMLA comes under the radar of ED.

Powers of Enfocement Dircectorate (ED)

ED a multi-disciplinary enforcement agency is mandated to enforce two cardinal fiscal laws:

FEMA, a civil law that deals with permissibility, restrictions, prohibitions, and contraventions of exchange control laws and imposes penalties.

PMLA, a criminal law to prevent and combat money laundering and terror financing activities and provides for civil & criminal punishment for laundering money.

The other laws and acts that the ED can enforce include Fugitive Economic Offenders Act, 2018, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The all-inclusive power of ED includes and are not limited to the following:

• Power to issue summon.
• Power to attach any property.
• Power to search or examine the area as well as the records.
• Power of seizure.
• Power of survey.
• Power to arrest the accused, summon witnesses, and record their statements.
• Power to enter the property of the accused, search, confiscate, or freeze it.
• Power to investigate persons connected with the property.
• Power to penalize.

Proceedings under the Enforcement Directorate (ED)

If ED has reasons to believe that an offence of money laundering has been committed or if they believe that carrying out an investigation will let them decide whether an illegal activity was carried out or not, the ED may use the powers enumerated under Section 16 and Section 17 of PMLA which are the power of survey and power of search and seizure, respectively  to examine the property and investigate and seize money and documents. Such search and seizure may also be carried out directly under Section 50 of the PMLA without contacting the accused for questioning.

The offences of money laundering as noted in Section 3 of the PMLA are considered an aggravating one and the accusation under the same shifts the onus of proof on the person accused of having committed the offence. Just as an First Information Report (“FIR”) is generated when a case is lodged at a police station,   Enforcement Case Information Report (“ECIR”), is generated when ED wants to initiate a proceeding, however it is pertinent to note that unlike a FIR, the ED is not required to provide a copy of the ECIR to an accused or a suspect, as held by the Apex Court of India.

Notice by ED may be served to the accused and/or to the witness. Usually, the ED summons does not outrightly state whether a person is called as an accused or as a witness making it even more important to take legal aid which will enable the party to whom the summon is served to determine the nature of the offence that is being investigated. Based on the severity of the matter in hand the ED may determine whether an arrest is necessary under Section 19 of the PMLA which deals with power of arrest.

Legal Support for Matters related to Enforcement Directorate (ED): Our Role

Our experienced teams of experts with their unparalleled and comprehensive knowledge of economic, civil and criminal laws are well equipped to provide the required litigation support services to our clients in matters related to ED which are complex in nature and may have severe consequences. Our services include and is not limited to assisting our clients in drafting replies to show cause notices, preparing necessary documentations, filing and defending cases, representing them before the appropriate authorities and addressing their compliance obligations. Litigation being A&A’s flagship gives us a unique advantage in understanding the intricacies of ED related matters as well as the ability to pave out way that would lead to successful results.