Enforcement Directorate Essay Example for Free

Enforcement Directorate Essay Enforcement Directorate ‡Pertains to the establishment of Directorate of Enforcement and the powers to investigate the violation of any provisions of Act, rule, regulation, notifications, directions or order issued in exercise of the powers under this Act. The Director have been empowered to take up investigations. Enforcement Directorate ‡ The Directorate of Enforcement is mainly concerned with the enforcement of the provisions of the FEMA to prevent leakage of foreign exchange which generally occurs through the following malpractices. 2.Remittances of Indians abroad otherwise than through normal banking channels, i. e. through compensatory payments. 3.Acquisition of foreign currency illegally by person in India. 4.Unauthorized maintenance of accounts in foreign countries. 5.Illegal acquisition of foreign exchange through Hawala. 6.Secreting of commission abroad. Organizational Set-Up *The Enforcement directorate, with its HQs at New Delhi has seven zonal offices at Bombay, Calcutta, Delhi, Jalandhar, Madras, Ahmedabad and Bangalore. The zonal offices are headed by the Dy. Directors * The Directorate has 9 sub zonal offices at Agra,Srinagar, Jaipur, Varanasi, Trivendrum, Calicut, Hyderabad, Guwahati and Goa, which are headed by the Asstt. Directors. FEMA 1999 ENFORCEMENT DIRECTORATE Established by Central Govt to investigate due adherence to the provisions of the Act by market participants. Concerned with enforcement of the provisions of the Act to prevent leakage of foreign exchange occurring through various malpractices. Directorate of Enforcement is responsible for detection of cases relating to violation and performance of adjudicatory functions to curb malpractices FUNCTIONS To collect and develop intelligence relating to violation of provisions of FEMA. To conduct searches of suspected persons, conveyances and premises for seizing incriminating materials. To enquire into and investigate suspected violations or provisions of FEMA. To adjudicate cases of violations of FEMA for levying penalties and also for confiscating the amounts involved in contraventions. To realise penalties in departmental adjudication. The Parliament has enacted the Foreign Exchange Management Act,1999 to replace the Foreign Exchange Regulation Act, 1973. This Act came into force on the 1st day of June,2000. To investigate provisions of the Act, the Central Govt. have established the Directorate of Enforcement with Director and other officers as officers of the Enforcement. ROLE OF ENFORCEMENT DIRECTORATE The Directorate of Enforcement is mainly concerned with the enforcement of the provisions of the Foreign Exchange Management Act to prevent leakage of foreign exchange which generally occurs through the following malpractices 1) Remittances of Indians abroad otherwise than through normal banking channels, i.e. through compensatory payments. Acquisition of foreign currency illegally by person in India. Non ²repatriation of the proceeds of the exported goods. Unauthorised maintenance of accounts in foreign countries. Under ²invoicing of exports and over ²invoicing of imports and any other type of invoice manipulation. Siphoning off of foreign exchange against fictitious and bogus imports land by Illegal acquisition of foreign exchange through Hawala. Secreting of commission abroad. 2) 3) 4) 5) 6) 7) 8) Directorate has to detect cases of violation and also perform substantial adjudicatory functions to curb such malpract ices. ORGANISATION SET-UP The Enforcement Directorate, with its Headquarters at New Delhi has seven zonal offices at Bombay, Calcutta, Delhi, Jalandhar, Madras, Ahmedabad and Bangalore. The zonal offices are headed by the Deputy Directors. The Directorate has nine sub ²zonal offices at Agra, Srinagar, Jaipur, Varanasi, Trivandrum, Calicut, Hyderabad, Guwahati and Goa, which are headed by the Assistant Directors. The Directorate has also a Unit at Madurai, which is headed by a Chief Enforcement Officer. Besides, there are three Special Directors of Enforcement and one Additional Director of Enforcement, FUNCTIONS The main functions of the Directorate are as under: ² The main functions of the Directorate are as under 1 2 3 4 5 6 7 8 9 To enforce Foreign Exchange Management Act 1999 and Prevention of money Laundering Act 2002. To collect and develop intelligence relating to violation of the provisions of Foreign Exchange Management Act and Prevention of money Laundering Act 2002. To conduct searches of suspected persons, conveyances and premises and seize incriminating materials (including Indian and foreign currencies involved) To enquire into and investigate suspected violations of provisions of Foreign Exchange Management Act and Prevention of money Laundering Act 2002. To adjudicate cases of violations of Foreign Exchange Management Act penalties departmentally and also for confiscating the amounts involved in violations. To realize the penalties imposed in departmental adjudication; To attach and confiscate properties involved in the act of Money laundering. To arrest the pers on suspected to be involved in the act of money laundering. To prosecute the person involved in the act of money laundering. In addition to the above functions relating to the Foreign Exchange Management Act. Directorate also processes and recommends cases for detention of habitual offender under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,1974 (COFEPOSA), which provides interalia for detention of a person with a intention of preventing him from acting in a manner prejudicial to the conservation and augmentation of exchange. PROCEDURAL PROVISIONS For enforcing the provisions of various sections of FEMA,l999, the officers of Enforcement Directorate of the level of Assistant Director and above will have to undertake the following functions: 1) 2) 3) 4) Collection and development of intelligence/information. Keeping surveillance over suspects. Searches of persons/vehicles as per provisions of Income ²tax Act,1961. Searches of premises as per provisions of Income ²tax Act,1961. 5) Summoning of persons for giving evidence and producing of documents as per provisions of Income ²tax Act,l96l. Power to examine persons as per provisions of Income ²tax Act,196l. Power to lcall for any information/document as per provisions of Income ²tax Act , 1961. Power to seize documents etc. as per provisions of Income ²tax Act,196l. Custody of documents as per Income ²tax Act,196l. Adjudication and appeals- Officers of and above the rank of Dy Director of Enforcement, are empowered to adjudicate cases of contravention of the provisions of the Act; these proceedings which are quasi ²judicial in nature, start with the issuance of show cause notice; in the event of cause tshown by the Notice ²not being found satisfactory, further proceedings are held, vis. personal hearing, in which the noticee has a further right to present his defence, either in person or through any authorised representative; on conclusion of these proceedings, the adjudicating authority has to examine and consider the evidence on record, in its entirety and in case the charges not being found proved, the noticee is acquitted, and in the e vent of charges being found substantiated, such penalty, as is considered appropriate as per provisions of section 13 of the Act can be imposed, besides confiscation of amount involved in these contraventions. The penalty imposed has to be deposited in the concerned office of the Dy. Director within 45 days of the date of receipt of the Adjudication order. In case the party feels aggrieved by the orders of the adjudicating authority, he/she/they can refer appeal, before the Appellate Tribunal/Special Director (Appeal), Foreign Exchange. Whereas, another appeal lies to the High Court, against the order of the Appellate Tribunal, however, only in the matters involving question/points of Law. PUBLIC GRIEVANCES MACHINERY The Directorate keeps a constant vigil over its officers/staff and strict action is taken against anybody found/suspected to be involved in any undesirable activity. The Vigilance Cell of the Directorate works under the direct supervision of the Director of Enforcement, and, at present, it includes two very senior officers.