ED’s expansion – The agency is entering new areas of surveillance

Source: The post is based on the article “ED’s expansion – The agency is entering new areas of surveillance” published in the Business Standard on 30^th November 2022.

Syllabus: GS 3 – money laundering and its prevention.

Relevance: About the expansion of ED’s power.

News: Last week, the Centre has amended a 2006 notification to include 15 organisations on the list of institutions with which the Enforcement Directorate (ED) may share information regarding cases. This expands substantially the ambit of the ED’s information-sharing brief.

What is the Enforcement Directorate(ED)?

What is the functioning of the Enforcement Directorate?

About the present amendment on ED’s power

The Centre has amended a 2006 notification to include 15 organisations on the list of institutions with which the ED may share information regarding cases. Among these are the National Investigation Agency (NIA), the Competition Commission of India (CCI), the Serious Fraud Investigation Office (SFIO), and State Police Divisions.

Previously this information sharing is limited to bodies such as the Central Bureau of Investigation’s economic offences wing, the banking and stock market regulators, the Research and Analysis Wing of the Cabinet Secretariat, and the Intelligence Bureau, apart from the chief secretaries in states.

How the recent amendment will widen the power of ED?

Expand ED’s sectoral expertise: Some of the institutions that have been included in the amendment will widen ED’s sectoral expertise. For instance, information sharing with Bureau of Wildlife Crime Control will provide domain expertise in that field.

ED can question other organisations: If organisations such as the SFIO, Central Vigilance Commission, and NIA are required to share data with ED, it will create an open question of the enforcement functions of these agencies.

The inclusion of the CCI within the ED’s information-sharing ambit: This has significant consequences for the corporate sector since it lays open to agency scrutiny confidential data that companies submit to the competition regulator.

How does the recent Supreme Court ruling on ED also widen its powers?

Recently, the Supreme Court held that a) The ED’s have powers of arrest, property attachment, and search and seizure with relative impunity, b) ED was not bound to produce the Enforcement Case Information Report, the official document recorded before starting a criminal investigation.

Note: The court agreed to list the verdict for review.

Why there is an expansion of ED’s power?

This is due to an expansion in the money-laundering caseload. Between 2019-20 and 2021-22, the agency handled 2,723 cases, up from 1,262 in the seven years from 2012-13 to 2018-19.

What are the concerns with the expansion of ED’s power?

a) The weaponisation of the ED might lead to an increase in cases against Opposition leaders and critics of the state, b) The government can expand its surveillance powers to larger swathes of society. An expanding surveillance state is usually a sign of shrinking democracy.