'FATF review at critical stage': Centre asks SC to allow ED director to continue till October 15

The central government contended that at "such a critical juncture", it is essential to have an individual who is well-acquainted with the overall status of money laundering investigations and proceedings across the country. -- Reports ETV Bharat's Sumit Saxena.

New Delhi:The Centre Wednesday moved the Supreme Court seeking its permission to extend the tenure of the Enforcement Director Sanjay Kumar Mishra – who was asked by the court to demit office by July 31 – till October 15, 2023, in view of the ongoing Financial Action Task Force (FATF), which is at a critical stage.

The application was mentioned by Solicitor General Tushar Mehta before a bench headed by Justice B R Gavai. The top court agreed to hear Centre’s plea at 3:30 pm on Thursday. The application said: “The Union of India is compelled to approach this court seeking extension of the date up to 15.10.2023 which the Respondent No. 2 (Mishra) may be permitted to continue in office, in view of the ongoing FATF Review which is at a critical stage where submissions on effectiveness have been made on 21.07.2023 and on-site visit is scheduled to be conducted in November, 2023”.

The application contended that at such a critical juncture, it is essential to have an individual who is well-acquainted with the overall status of money laundering investigations and proceedings across the country and also the intricacies of the procedures, operations and activities of the investigating agency, at the helm of affairs at the Directorate of Enforcement (ED).

The application said, “Any transition in leadership at the Directorate of Enforcement at this stage, would significantly impair the ability of the agency to provide necessary assistance to and co-operation with the assessment team and thereby adversely impact India's national interests”. The Centre said India’s mutual evaluation has already begun and is scheduled to be discussed in June 2024 plenary of FATF and India submitted its response on technical compliance on May 5, 2023, and on effectiveness on July 21, 2023.

“Since Enforcement Directorate is the only money laundering agency in India, its role in the presentation of effectiveness of anti-money laundering provision and administration before the assessor is very significant and important from a national interest perspective. The positive outcome of Mutual Evaluation is essential for every country because any adverse report will invite several international sanctions”, said the application.

The Centre stressed that under the present director, the Directorate of Enforcement has been engaged in the preparation of documents and other requirements for mutual evaluation of India since the beginning of the year 2020, and his continuation in this arduous and delicate process is essential. The Centre said ED has a key role to play in India’s mutual evaluation, along with other agencies like RBI, NIA, and Financial Intelligence Unit and it is extremely essential that ED is in the state of full readiness during this period till on-site.

The application said, “The Indian Mutual Evaluation has already commenced and the written submissions on effectiveness as stated earlier, has been made on 21.7.2023. During the next two to three months the assessors will be seeking and asking follow-up questions and clarifications which need to be examined and responded to”.

It said for this purpose, guidance and leadership at a very senior level is required and the assessors are likely to visit India for a period of three weeks starting November 3, 2023.

The Centre said under the provisions of the PMLA, the Directorate of Enforcement seeks assistance from foreign countries/jurisdictions for taking or collecting evidence, examination of witnesses, service or execution of summons, warrant for arrest of an accused person, attachment, seizure or confiscation of property etc.

“Assistance is also provided when a request in this regard is received from a foreign country/jurisdiction. Further, the Directorate of Enforcement is seeking and providing assistance on an informal basis through direct contact amongst enforcement agencies and through other informal channels such as FIU-Egmont Group, Interpol, CARIN Network (ARIN-AP), ITOU, COIN etc.”, said the application.

On July 11, the Supreme Court said the back-to-back extensions granted by the central government to Enforcement Directorate (ED) director Sanjay Kumar Mishra “illegal and not valid in law”. However, the top court allowed Mishra to continue in office till July 31, 2023, “in order to ensure the transition to be smooth in the larger public interest”.

A bench comprising justices B. R. Gavai, Vikram Nath, and Sanjay Karol said: “The impugned orders dated 17th November 2021 and 17th November 2022 granting extensions to the tenure of the respondent No.2- Sanjay Kumar Mishra for a period of one year each are held to be illegal”.

The top court had said orders granting extensions to Mishra are not valid in law, however it considered the concern expressed by Centre with regard to FATF ( Financial Action Task Force ) review. “we find that in order to ensure the transition to be smooth in the larger public interest, it will be appropriate to permit Mishra to continue to be in office till 31st of July 2023”, said the bench.

On July 11, the Supreme Court said the back-to-back extensions granted by the central government to Sanjay Kumar Mishra were “illegal and not valid in law”. However, the top court allowed Mishra to continue in office till July 31, 2023, “in order to ensure the transition to be smooth in the larger public interest”.