The Enforcement Directorate (ED) is a multi-disciplinary law enforcement and economic intelligence agency of the Government of India, operating under the Department of Revenue, Ministry of Finance. It is an institution established on May 1, 1956, initially as an 'Enforcement Unit' within the Department of Economic Affairs to handle violations of exchange control laws under the Foreign Exchange Regulation Act, 1947 (FERA '47). The ED's mandate expanded significantly with the liberalization of the Indian economy.
The ED's primary function is to enforce two key Acts: the Foreign Exchange Management Act, 1999 (FEMA), which replaced the regulatory FERA, 1973, and the Prevention of Money Laundering Act, 2002 (PMLA), which was enacted following the recommendations of the Financial Action Task Force (FATF). The ED also enforces the Fugitive Economic Offenders Act, 2018 (FEOA). Under the PMLA, the ED has broad criminal investigative powers, including the authority to conduct searches and seizures under Section 17, arrest individuals under Section 19, and provisionally attach property derived from the proceeds of crime under Section 5. Furthermore, Section 50 of the PMLA grants ED officers quasi-judicial powers to summon any person and record their statements, which are admissible as evidence.
A major recent change involves the PMLA's stringent bail conditions under Section 45(1), which were initially struck down by the Supreme Court in Nikesh Tarachand Shah v. Union of India (2017) but were later restored through a 2018 amendment. The Supreme Court, in Vijay Madanlal Choudhary v. Union of India (2022), upheld the constitutional validity of the ED's sweeping powers under the PMLA, including the power of arrest and the twin bail conditions, though the court later agreed to review some aspects. The ED's scope has also recently expanded to include new threats like cyber and cryptocurrency-related frauds. The ED is also a sponsoring agency under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).