The story so far: The Enforcement Directorate (ED) is in the news now and often. It goes back to May 1, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA). The ED today is a multi-dimensional organisation investigating economic offences under the Prevention of Money Laundering Act (PMLA), Fugitive Economic Offenders Act, Foreign Exchange Management Act and FERA.
From where does the ED get its powers?
When proceeds of crime (property/money) are generated, the best way to save that money is by parking it somewhere, so one is not answerable to anyone in the country. Therefore, there was a need to control and prevent the laundering of money. The PMLA was brought in for this exact reason in 2002, but was enacted only in 2005. The objective was to prevent parking of the money outside India and to trace out the layering and the trail of money. So as per the Act, the ED got its power to investigate under Sections 48 (authorities under act) and 49 (appointment and powers of authorities and other officers).
