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ED wants independence in registering anti-money laundering cases

ED wants independence in registering anti-money laundering cases

The ED chief today batted for allowing the agency to independently register and pursue anti-money laundering cases so that its probe is not impacted even if the courts junk the first FIR by any other agency, according to PTI.

The ED is in a "three-legged race" and many courts feel that if the case of the scheduled agency is thrown out, "then the ED case automatically fails", Enforcement Directorate chief Karnal Singh said and added this should change as the rules of the game are "different" under the PMLA.

His remarks comes in the backdrop of the courts recently discharging the Maran brothers (Aircel-Maxis 2G spectrum case) and arms dealer Abhishek Verma in separate CBI cases, based on which the ED had registered criminal cases under the Prevention of Money Laundering Act (PMLA).

The ED can, at present, file a case only on the basis of an FIR by agencies like CBI and cannot take up an anti-money laundering investigation independently.

The court had held that as the scheduled offence registered by CBI in Aircel-Maxis case is no more valid, the ED case too becomes "groundless" and that nothing survived in it. The ED has appealed against the order.

Calling such developments as "bottle necks" in its effort to curb the menace of black money and corruption, Singh said that the "undertsanding of law sometimes creates problems."

He was delivering the inaugural speech at the Enforcement Day event, where Finance Minister Arun Jaitley was the chief guest along with Revenue Secretary Hasmukh Adhia.

"Our legs are tied with the scheduled agency (CBI in these cases). It is like in sports where we have the three- legged race...our one leg is tied with them (scheduled agency like police or CBI) and many courts feel that the other case fails then the ED case automatically fails.

"We have gone (in appeal) to the Supreme Court in such a case for a decision," the ED Director said.

The rules of game are different in predicate offence investigation and the ED investigation, he said.

The ED, sources said, wants legal amendments in the PMLA so that it can register criminal cases on its own rather than forming basis of any other agency's FIR.

The ED chief listed some points that differentiate PMLA from other laws.

"Whenever there is investigation by police, the statement given before police is not admissible in court while statement given before a directorate (ED) officer is admissible in court. Appreciation of evidence is also different. These issues have to be resolved with the passage of time," Singh said.

Talking about ED's achievements, the Director said the agency has attached, under PMLA, assets worth over Rs 22,000 crore till now, and half of it has been done in last year alone.

A good number of attachments under anti-money laundering laws came as a result of the ED's probe in black money cases which were registered post demonetisation.

Prime Minister Narendra Modi had declared demonetisation of two high value currencies of Rs 1000 and Rs 500 denomination on November 8 last year.

"The last financial year was full of challenges for ED be it the case of Vijay Mallya, AgustaWestland, bank fraud cases, the demonetisation issues...officers of the agency performed to their best with their diligence and hardwork," he said.

He said the agency filed 76 charge sheets under PMLA last year, while it filed 104 such complaints in the courts this year.

"The total cases under trial are 353," he said adding first two convictions under PMLA were obtained this year.

Singh said cases related to bank frauds, corruption and those related to shell companies are a priority for the agency.

"Analysis of cases being investigated by ED shows that 27 per cent of total cases are bank frauds or other frauds...and it is the area of concern. The second area of concern, about 20 per cent of the cases, are related to corruption.

"If we see how money is laundered then the most important laundering process is by the shell companies which we can say is done by accommodation entry operators," he said.

He also drew an analogy between money laundering and washing clothes at a 'dhobi ghaat'.

"It (money laundering) is like suppose you have to wash your clothes...'dhobi ghaat' only washes them but who uses the clothes? Somebody else.

"If any country is prone to money laundering it becomes like a 'dhobhi ghat'," he said.

"The people of various countries would come, clean their money and go back and take their money back and we are never benefited out of that," Singh said.

He also urged professionals like Chartered Accountants and others to "desist from doing wrong things".

"We did some searches (against CAs and other professionals)...we arrested one CA. They should have a clear message that they should work for the country and not for the offenders," the Director said.

The ED chief added there are certain other "bottle necks" being faced by it like misunderstanding of legal procedures (by its officials), implementation of law and shortage of manpower.

The agency, he said, is in the process of establishing five more cyber labs in addition to the one it has at its headquarters here, so that digital evidence is quickly retrieved and used for investigation purposes.

"Our endeavour is to improve professionalism in the ED and I can assure that we will work with utmost sincerity, integrity and professionalism to give results to the country," he said.


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