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Indian Express
a day ago
- Business
- Indian Express
SC pulls up ED: What are the powers of India's financial crime watchdog?
— Kannan K The Supreme Court recently reprimanded the Enforcement Directorate (ED) for 'crossing all limits' and 'violating the federal structure' by conducting raids on government-run liquor retailer Tamil Nadu State Marketing Corporation (TASMAC). Chief Justice of India (CJI) B R Gavai described the central agency's actions against the State corporation as a violation of the Constitution's federal structure. Notably, the TASMAC case is not the first time the apex court has pulled up the ED. Earlier this month, the Court criticised the body for making 'allegations without any reference to anything' in a liquor scam case in Chhattisgarh. In another case in Chhattisgarh, it had called out the agency for paying scant heed to the 'fundamental rights of the accused'. These developments warrant revisiting the formation and evolution of India's economic intelligence agency, and its role in enforcing economic laws and combating financial crimes. The ED was established on May 1, 1956, as the 'Enforcement Unit' under the Department of Economic Affairs within the Ministry of Finance for handling violations of exchange control laws under the now-repealed Foreign Exchange Regulation Act, 1947/1973 (FERA). Later on, it was renamed the Enforcement Directorate and was transferred to the administrative control of the Department of Revenue, and subsequently entrusted with the enforcement of a broader range of financial laws. The enactment of the Foreign Exchange Management Act (FEMA), which replaced FERA in 1999, and the Prevention of Money Laundering Act (PMLA) in the early 2000s, increased the power of ED. These moves aligned its functions with international standards to combat financial crimes, notably those recommended by the Financial Action Task Force (FATF). In 2006, India received observer status in FATF – which was created in 1989 to coordinate anti-money laundering efforts across the world – and in 2010, it became its member state. While the ED has a broad mandate to investigate offences related to money laundering and foreign exchange violations, it's mandated to enforce the following key laws: — The Prevention of Money Laundering Act, 2002 (PMLA): The ED traces assets from money laundering activities and is responsible for ensuring the prosecution of offenders and confiscation (permanent seizure of ownership, usually after conviction) of such assets. — The Foreign Exchange Management Act, 1999 (FEMA): The law enforcement agency is also responsible for imposing penalties on offenders of FEMA and in the cases pertaining to violations committed prior to the repeal of the FERA of 1973, which FEMA replaced, thus being responsible for the handling of legacy FERA cases. — The Fugitive Economic Offenders Act, 2018 (FEOA): The ED is mandated to attach (temporarily seizing of property without assuming ownership to prevent sale, usually during trial phase) and confiscate properties of economic offenders evading Indian law by fleeing abroad — The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA), 1974: The Directorate is the sponsor of cases under the law and can initiate preventive detention proceedings on FEMA violations based on COFEPOSA. ED's power and federal structure Thus, as the primary body to enforce economic laws, the ED enjoys significant powers to investigate, detect, and prevent economic crimes. For instance, under the PMLA, the central agency is empowered to summon individuals, enforce their attendance, and record their statements, which are valid as evidence. The ED also has the authority to conduct searches and seize property or documents linked to money laundering, provided there's a recorded 'reason to believe' and the statutory prerequisites are met. It can also make arrests based on material evidence and written justification – but with the condition that the grounds for arrest are communicated to the accused. This is a higher threshold than that required for arrests under the Bharatiya Nagarik Suraksha Sanhita (BNSS). The ED also has the power to attach properties suspected to be proceeds of crimes for up to 180 days to prevent their sale during investigation. A distinctive feature of PMLA is the reversal of the burden of proof, where the onus often shifts to the accused to prove innocence by showing the legitimacy of the attached assets. Under the FEMA, the ED has adjudication powers and acts as a quasi-judicial body to impose penalties for foreign exchange regulation violations. Further, the FEOA grants the ED powers to attach and confiscate properties of economic offenders who have absconded from India. Taken together, these wide range of powers to investigate, secure evidence, attach and confiscate assets strengthen the ED's objective of protecting the integrity of India's financial system. However, these powers are subject to constitutional limits rooted in federalism. The Supreme Court has repeatedly warned the ED on overreaching its jurisdiction, stressing the need to respect state autonomy and to avoid causing any disruption to the union-state balance. These instructions are relevant, particularly in light of allegations regarding the use of the ED as a tool to interfere in investigations that fall under state jurisdiction. While the ED has an important role in safeguarding India's financial integrity, its functioning has regularly drawn scrutiny and raised significant concerns, as seen in the Supreme Court's recent criticism of the TASMAC case. The CJI's observation regarding a violation of the Constitution's federal structure coupled with concerns about the agency's operational independence and allegations of partisan motivations underlined the need for introspection. A significant criticism faced by the ED is regarding its low conviction rate under the PMLA, despite a substantial number of cases registered and properties. Of the 5,297 cases registered under the PMLA from 2014 to 2024, only 40 cases have seen convictions, prompting the apex court to direct the agency to 'focus on quality prosecution and evidence' in August 2024. This has raised questions about the intent and effectiveness of the ED's investigative and prosecution mechanisms in securing convictions. The extensive powers granted to the ED, particularly under PMLA, including the power to arrest, provisionally attach assets, and the unique provision of a reversed burden of proof, have led to debates regarding their potential impact on due process and civil liberties. It has been alleged that the provision placing the burden of proof on the accused to prove their innocence has been used as a political tool to stifle the opposition. The Supreme Court's observations regarding a pattern of accusations without proof, and dismissal of multiple cases due to lack of evidence, substantiate such concerns. Critics argue that such powers are likely to be misused for political gain. The recent arrest of a high-ranking ED official by the CBI on grounds of taking bribes apparently contributed to eroding public trust in the body. Concerns have also been raised regarding the operational independence of the ED. Allegations of political influence and targeting of specific individuals or entities have frequently surfaced, impacting public perception and the agency's credibility. The need for greater transparency in its case selection process, investigations, and conviction rates is widely discussed. Additionally, the ED's actions sometimes overstep its jurisdictions, taking up cases that fall under the states' ambit, as seen in the TASMAC case, leading to federal friction. The ED would benefit from certain reforms aimed at increasing its effectiveness and improving the public perception regarding its functioning. A key step perhaps could be to place the agency under stronger judicial oversight, particularly the investigation, arrest, and attachment processes to prevent overstepping of jurisdiction. Another step could involve strict adherence to due process to counter allegations of political interests and harassment, which could be supported by establishing clear Standard Operating Procedures (SOPs) and effective training and capacity-building for ED personnel. Reorienting the ED's functioning to make investigations intelligence-driven and focussing on convictions through strong evidence might further help to dispel the perception of bias. To conclude, an economic intelligence agency such as the ED is a necessity to protect the economic integrity of India, ensuring the prevention of financial crimes. Reforms that keep pace with the times and strict adherence to due process and constitutional norms will be essential to ensure its fair and effective functioning. How has the ED's mandate evolved over time since its inception in 1956? What are the key laws enforced by the Enforcement Directorate, and how do they define its jurisdiction? How does the ED's role intersect with federal principles enshrined in the Indian Constitution? The Supreme Court criticised the Enforcement Directorate (ED) for 'crossing all limits' and 'violating the federal structure' in the Tamil Nadu State Marketing Corporation (TASMAC) case. Evaluate the concerns raised by the Court. Do you think the political misuse of agencies like the ED impact democratic institutions and public trust in governance? What is the significance of the ED's powers to attach and confiscate property under different laws like PMLA, FEMA, and FEOA? (Kannan K is a doctoral candidate in Political Science at the Centre for Economic and Social Studies, Hyderabad.)
Saba Yemen
21-05-2025
- Business
- Saba Yemen
Greatest mines in Algeria, millions of tons of underground wealth
Algeria - Saba: Five mines in Algeria stand out among the list of strategic projects the state is counting on to achieve a qualitative shift in the structure of the national economy. These projects are considered a practical starting point for diversifying sources of income, strengthening manufacturing industries, and reducing dependence on oil and gas. These projects are supported by huge investment figures and employing thousands of workers. The specialized "Energy" platform listed the five most prominent mines in Algeria that have spearheaded the country's vision to exploit the country's untapped mineral potential, which until recently was only 10% exploited. The five most prominent mines in Algeria include resources of iron ore, phosphate, zinc, and lead, and their prospects extend to include gold and even diamonds. With Algerian President Abdelmadjid Tebboune's directives to make mineral resources a priority in economic policy, the pace of work on the ground has accelerated to launch and activate major mining projects that had been postponed for decades. National and international partnerships have been harnessed to complete them within record timeframes. This step represents a real transformation, as 2023 witnessed what can be described as the "year of mining resurgence," following the launch of several such projects across the country, from the southwest to the far northeast. Ghar Djebilet Mine The Djebilet gas mine is the largest of Algeria's five major mines, with a massive reserve estimated at 3.5 billion tons of iron ore, of which 1.75 billion tons are directly exploitable. The mine, discovered in 1952, is located in southwestern Algeria. However, its actual exploitation did not begin until 2022, making it one of the most delayed projects in Algeria, despite its importance. The project was launched as part of an Algerian-Chinese partnership under the supervision of the National Iron and Steel Company (FERA) and the Chinese consortium CMH. During its first phase (2022-2025), it will produce between 2 and 3 million tons annually, increasing to 50 million tons starting in 2026, following the completion of the 950-kilometer railway line to the city of Béchar. Jebel Onk Mine The Jebel Onk mine is the second largest project among the five major mines in Algeria, representing the backbone of the integrated phosphate project in the east of the country. According to Algerian mining sector data from the specialized energy platform, Jebel Onk covers the provinces of Tebessa, Souk Ahras, Skikda, and Annaba. This mine's reserves are estimated at 2.8 billion tons of phosphate, and the project aims to produce 10 million tons of raw material annually, 6 million tons of phosphate concentrate, and approximately 4 million tons of fertilizer. Investments in the Jebel Onq mine have reached approximately $7 billion, and are the result of a partnership between national companies (Asmidal and Algerian Mines) and Chinese companies (Wuhan and Yunnan Tian'an). Tala Hamza Mine The Tala Hamza-Oued Amizour mine is one of the new projects included in the Ministry of Energy and Mines' plans. It is located in the Tala Hamza region of Bejaia province and covers an area of 23.4 hectares. Oued Amizour is also one of the five most prominent mines in Algeria, with reserves estimated at 34 million tons of zinc ore, placing it among the top ten globally. The project's foundation stone was laid at the end of 2023, as part of an Algerian-Australian partnership with an investment of $400 million. Scheduled to begin operations in July 2026, the mine is expected to produce approximately 170,000 tons of zinc concentrate and 30,000 tons of lead annually, providing thousands of jobs and subject to strict environmental standards. Amsemsa Mine The Amsemsa gold mine, located 460 kilometers in the In Guezzam region, west of Tamanrasset Province, the far south of the country near the border with Niger, was discovered and developed by GMA Resources PLC. It is one of the top five mines in Algeria, being the country's largest gold producer. The mine's gold deposits amount to approximately 70 tons, with proven reserves estimated at approximately 3.38 million tons. It represents a sample of the mines spread throughout the Hoggar region in southern Algeria, a region with difficult geological terrain and abundant precious metals. Jebel Reggane Mine Although not yet operational, the Jebel Reggane region in Adrar Province is considered one of the regions with significant potential for diamond production, according to recent geological studies. This site is currently undergoing intensive exploration and could become a promising mine in the future, placing it among the top five mines in Algeria, worth $30 billion. Whatsapp Telegram Email Print
Business Recorder
25-04-2025
- Business
- Business Recorder
Forex & appeal rules: SC dismisses federation's plea
ISLAMABAD: The Supreme Court held that the condition under 23C(4) of the Foreign Exchange Regulation Act, 1947 (FERA) and rule 8 of the Adjudication Proceedings and Appeal Rules, 1998 for filing an appeal against the decision of adjudicating officer is not justified and infringed upon the fundamental rights. A five-judge constitutional bench of the Supreme Court, headed by Justice Aminuddin Khan, decided the matter on the federation's appeal against the Lahore High Court (LHC) order. The bench maintaining the LHC order dismissed the federation's appeal. Senior Joint Director Foreign Exchange Operations Division SBP (respondent No 8) had filed a petition before the Lahore High Court, challenging the vires of Section 23C (4) of the Foreign Exchange Regulation Act, 1947 (FERA) and rule 8 of the Adjudication Proceedings and Appeal Rules, 1998. The petition was allowed by means of order dated 01.02.2023 and struck down the said provision of FERA and rule 8 of the Rules as unconstitutional. The federation then approached the Supreme Court. Averting due adjudication: LHC declares SBP's Circular No 2 as unlawful Under section 23C of the FERA, a decision of the adjudicating officer, made under section 23B(4) is though appealable before the Foreign Exchange Regulation Appellate Board, but it shall not be admitted for hearing unless the appellant deposits in cash with the Appellate Board the amount of penalty or, at the discretion of the Appellate Board, furnishes security equal in value to such amount of penalty, as provided by its subsection (4). The main controversy for determination is whether the pre-condition of deposition of the amount of penalty for admission of an appeal as provided by section 23C(4) of the FERA and rule 8 of the Rules, is constitutional. The judgment said that an unreasonable condition could make it impossible or unfairly difficult to exercise the right to appeal. Similarly, conditions that obstruct the normal and fair functioning of the due process for an appellant, such as, the payment of excessive amount could be considered as unreasonable. It said there is no justification for deposition of such an excessive amount nor has it been shown that the condition attached to the appeal is with due regard to the public requirement. Directing a party to deposit the total amount of the subject matter, before admission of his appeal would be unreasonable, resulting into preventing that party from exercising his right of appeal, which violates his fundamental right of fair trial and due process, guaranteed by Article 10A of the Constitution. If permitted, this will not only deprive the respondents from their fundamental right of challenge to the decision of the executive authority before an independent and impartial higher forum, but will also give a license to the powerful executive to misuse its authority. The condition of deposition of the fine amount imposed by subsection (4) of section 23C of the FERA is so excessive and unreasonable that it would amount to denial of the right to appeal, which violates Article 10A of the Constitution, hence, cannot sustain. The judgment noted that there is always a possibility of error, mistake of facts or law in a decision at the level of initial forum, therefore, the right of appeal is a substantive right of an aggrieved person. It existed since the establishment of judiciary, with its primary function to protect against miscarriage of justice. A right of access to justice and a right to a fair trial and due process is a fundamental right of a citizen, guaranteed by Article 10A of the 1973 Constitution, which includes an appeal to a higher, independent and impartial forum to scrutinise the decision of the fora below. The court noted that the denial of right of appeal violates the fundamental rights of a citizen, the principles of natural justice and the injunctions of Islam. Copyright Business Recorder, 2025
Express Tribune
25-04-2025
- Politics
- Express Tribune
No preconditions to right to appeal
A constitutional bench of the Supreme Court has disapproved attaching any condition with the right of appeal and declared it a violation of fundamental rights. "Unreasonable conditions attached to an appeal would likely be one that is not justified, disproportionate or infringed upon the fundamental rights or the legal process. An unreasonable condition could make it impossible or unfairly difficult to exercise the right to appeal," reads a five-page judgement authored by Justice Jamal Khan Mandokhail. He was hearing an appeal filed by Senior Joint Director Foreign Exchange Operations Division against Lahore High Court which had declared that section 23C (4) of the Foreign Exchange Regulation Act, 1947 (FERA) and rule 8 of the Adjudication Proceedings and Appeal Rules,1998 are unconstitutional. A five-judge bench of the constitutional bench led by Justice Aminuddin Khan heard the matter. "Similarly, conditions that obstruct the normal and fair functioning of the due process for an appellant, such as, the payment of excessive amount could be considered as unreasonable," the judgment adds. "There is no justification for deposition of such an excessive amount nor has it been shown that the condition attached to the appeal is with due regard to the public requirement." Under section 23C of the FERA, a decision of the Adjudicating Officer, made under section 23B(4) is though appealable before the Foreign Exchange Regulation Appellate Board (Appellate Board), but it shall not be admitted for hearing unless the appellant deposits in cash with the Appellate Board the amount of penalty or, at the discretion of the Appellate Board, furnishes security equal in value to such amount of penalty, as provided by its subsection (4). The main controversy for determination is whether the pre-condition of deposition of the amount of penalty for admission of an appeal as provided by section 23C(4) of the FERA and rule 8 of the Rules, is constitutional. The judgement notes that there is always a possibility of error, mistake of facts or law in a decision at the level of initial forum, therefore, the right of appeal is a substantive right of an aggrieved person. "It existed since the establishment of judiciary, with its primary function to protect against miscarriage of justice. A right of access to justice and a right to a fair trial and due process is a fundamental right of a citizen, guaranteed by Article 10A of the constitution, which includes an appeal to a higher, independent and impartial forum to scrutinize the decision of the fora below.
Express Tribune
24-04-2025
- Business
- Express Tribune
CB shields right of appeal from preconditions
Listen to article A constitutional bench of the Supreme Court has disapproved attaching any condition with the right of appeal and declared it a violation of fundamental rights. "Unreasonable conditions attached to an appeal would likely be one that is not justified, disproportionate or infringed upon the fundamental rights or the legal process. An unreasonable condition could make it impossible or unfairly difficult to exercise the right to appeal,' reads a five-page judgement authored by Justice Jamal Khan Mandokhail. He was hearing an appeal filed by Senior Joint Director Foreign Exchange Operations Division against Lahore High Court which had declared that section 23C (4) of the Foreign Exchange Regulation Act, 1947 (FERA) and rule 8 of the Adjudication Proceedings and Appeal Rules,1998 are unconstitutional. A five-judge bench of the constitutional bench led by Justice Aminuddin Khan heard the matter. 'Similarly, conditions that obstruct the normal and fair functioning of the due process for an appellant, such as, the payment of excessive amount could be considered as unreasonable,' the judgment adds. 'There is no justification for deposition of such an excessive amount nor has it been shown that the condition attached to the appeal is with due regard to the public requirement.' Under section 23C of the FERA, a decision of the Adjudicating Officer, made under section 23B(4) is though appealable before the Foreign Exchange Regulation Appellate Board (Appellate Board), but it shall not be admitted for hearing unless the appellant deposits in cash with the Appellate Board the amount of penalty or, at the discretion of the Appellate Board, furnishes security equal in value to such amount of penalty, as provided by its subsection (4). The main controversy for determination is whether the pre-condition of deposition of the amount of penalty for admission of an appeal as provided by section 23C(4) of the FERA and rule 8 of the Rules, is constitutional. The judgement notes that there is always a possibility of error, mistake of facts or law in a decision at the level of initial forum, therefore, the right of appeal is a substantive right of an aggrieved person. "It existed since the establishment of judiciary, with its primary function to protect against miscarriage of justice. A right of access to justice and a right to a fair trial and due process is a fundamental right of a citizen, guaranteed by Article 10A of the constitution, which includes an appeal to a higher, independent and impartial forum to scrutinize the decision of the fora below. "It plays a role to review very carefully, to interpret and apply law in most accurate and uniform manner within the limits of legal procedure, in order to eliminate a slightest instance of miscarriage of justice. "Denial of right of appeal violates the fundamental rights of a citizen, the principles of natural justice and the injunctions of Islam." The judgement further notes that the Constitution guarantees that every person enjoys the protection of law and is to be treated in accordance with law, therefore, no clog, condition or restriction should be imposed by a simple act or law on a fundamental right conferred upon him by the Constitution, except in specific situation and according to due process, only in the larger interest of public. "The authority of the Parliament to legislate is derived from the Constitution, which must be consistent with and in accordance with the Constitution. Any enactment, a part of it or amendment introduced in it, if inconsistent or in violation of any provision of the Constitution, shall to the extent of such inconsistency or violation, be void. It is well settled that the right of appeal derives through a Statute. "The Constitution does not restrict the Legislature to impose conditions or restrictions, while granting the right of appeal. However, those conditions or restrictions must be with due regard to the public requirement and reasonable. Making a fundamental right subject to any clog, condition or restriction, contrary to the constitutional provisions or beyond the parameters of reasonableness, would be violative of the fundamental rights guaranteed by the Constitution." "Unreasonable conditions attached to an appeal would likely be one that is not justified, disproportionate or infringed upon the fundamental rights or the legal process. "An unreasonable condition could make it impossible or unfairly difficult to exercise the right to appeal. Similarly, conditions that obstruct the normal and fair functioning of the due process for an appellant, such as, the payment of excessive amount could be considered as unreasonable. 'There is no justification for deposition of such an excessive amount nor has it been shown that the condition attached to the appeal is with due regard to the public requirement. 'Directing a party to deposit the total amount of the subject matter, before admission of his appeal would be unreasonable, resulting into preventing that party from exercising his right of appeal, which violates his fundamental right of fair trial and due process, guaranteed by Article 10A of the Constitution. "If permitted, this will not only deprive the respondents from their fundamental right of challenge to the decision of the executive authority before an independent and impartial higher forum, but will also give a license to the powerful executive to misuse its authority. 'The condition of deposition of the fine amount imposed by subsection (4) of section 23C of the FERA is so excessive and unreasonable that it would amount to denial of the right to appeal, which violates Article 10A of the Constitution, hence, cannot sustain", says SC while upholding the LHC judgement. Meanwhile, Justice Shakeel Ahmad in his additional note stated that it is trite that the legislature is sovereign within its domain of law-making, but this sovereignty is not unfettered. "The legislature cannot enact any provision whatsoever which is inconsistent with, or violative of fundamental rights enshrined in the Constitution. Any such provision must be tested on the touchstone of constitutionality and struck down if found to be inconsistent with fundamental rights", he added.
