ED's expansion

The agency is entering new areas of surveillance

Business Standard Editorial Comment | Mumbai
Last Updated at November 29, 2022 22:04 IST

Last week, the Enforcement Directorate (ED), the 66-year-old agency that puts into operation the Foreign Exchange Management Act (Fema) and Prevention of Money Laundering Act (PMLA), saw an exponential expansion of its powers under the PMLA. 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. This expands substantially the ambit of the ED’s information-sharing brief, which was previously limited to such bodies 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. With the latest list, several questions arise. First, some of the institutions that have been included point to an impressive expansion of the ED’s sectoral expertise — the Bureau of Wildlife Crime Control, for example. Second, if organisations such as the SFIO, Central Vigilance Commission, and NIA are required to share data, it leaves open the question of the enforcement functions of these agencies. Third and most problematic is 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. This is hardly likely to add to corporations’ confidence in a key institution that governs mergers and acquisitions and, at the very least, will seriously discourage consolidation and buyouts by foreign corporations.

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