New Delhi: The Union government has mandated that the Enforcement Directorate receive case information from 15 more ministries, including the Ministry of External Affairs, the National Intelligence Grid, and the Military Intelligence directorate.
The notification was issued on 22 November, amending the rules of the Prevention of Money Laundering Act (PMLA), 2002.
Other feeder entities will include the National Investigation Agency, Serious Fraud Investigation Office, State Police Department, Special Investigation Team, National Intelligence Grid, Central Vigilance Commission, Defence Intelligence Agency, and National Technical Research Organisation among others.
In addition, information by any preliminary inquiry authority appointed with the approval of the Central Vigilance Commission, by the Disciplinary Authority — with the prior approval of the Centre — and any other preliminary inquiry authority appointed with concurrence of the Central Vigilance Commission, will also be shared with the ED.
These entities are bound to disclose information under Section 66 of the PMLA Act to the ED if the probe falls under their jurisdiction.
Section 66 of PMLA states that heads of these organisations would be required to furnish to the concerned authorities “any information received or obtained by such Director or any other authority as is necessary for the purpose of the officer, authority or body… to perform his or its functions under that law”.
It also includes a provision where “if the Director or other authority specified… is of the opinion, on the basis of information or material in his possession, that the provisions of any other law for the time being in force are contravened, then the Director or such other authority shall share the information with the concerned agency for necessary action”.
The ED can then file a case if they deem fit under the PMLA and take action, if required based on their investigation.
What does this mean for the organisations?
An amendment to the Act was earlier made in 2006 and 2020. Prior to this, only those listed in the notification from 2006 — Director (Financial Intelligence Unit, India, under the Ministry of Finance, Department of Revenue), Cabinet Secretariat (Research and Analysis Wing), Ministry of Home Affairs or National Security Council Secretariat or Intelligence Bureau, Economic Offenses Wing of Central Bureau of Investigation, Chief Secretaries of State Governments, Reserve Bank of India, Department of Company Affairs, Securities and Exchange — were bound to share information with the ED.
The Prevention of Money Laundering Act (PMLA) grants the Enforcement Directorate (ED) the authority to search, confiscate, and attach property. This amendment comes amid the recent Supreme Court verdict in July that maintained these rights, declaring that “law is not arbitrary”. The court’s order came at a time when claims of power abuse were being made against the ED.
The money-laundering act has been used against a variety of businesses, rights organisations, activists, and journalists, but the charges against political leaders have garnered the greatest attention.
Almost all of India’s major opposition party leaders are defending themselves against allegations of money-laundering. Importantly, the probes frequently came to light while these leaders were engaged in bitter conflicts with the BJP.
With the addition of 15 more departments to the list of information sharing, the agency is anticipated to have access to a lot more data involving financial fraud.
In the list of entities is the National Technical Research Organisation (NTRO), a technical intelligence agency under the National Security Advisor (NSA).
In 2011, the agency came under fire when the Supreme Court ordered an investigation into claims of financial irregularities in the acquisition of military weapons after a complaint was filed by a whistleblower and ex-NTRO scientist, hinting at systemic corruption within the agency.