Be careful in selecting cases for probe, Finance Minister asks Enforcement Directorate

NEW DELHI: Finance minister P Chidambaram has said the enforcement directorate should be careful in choosing cases for investigation so that legitimate economic activity and investments are not affected and also it is able to focus on important cases.

The enforcement directorate, or ED as it is popularly called, is the designate central agency to probe economic offences such as money laundering and foreign exchange violation cases.

The high-profile cases the agency is investigating now include Bharti-Walmart FEMA violation case, 2G scam and now Saradha Group scam.

"We must remember that economic activity must not be hindered by mindless investigation and prosecutions...All legitimate trading and investment activity must be fully respected and protected even while we investigate crimes involving money and laundering," he said in his address to ED officials on Wednesday.

India amended the Prevention of Money Laundering Act (PMLA) in line with its global commitment to curb money laundering, bringing businesses such as real estate agents, gems and precious metals traders its ambit.

It also dropped the monetary threshold of 30 lakh in line with global standard and made money laundering a standalone offence, raising apprehension that the law and the investigating agency responsible for its enforcement could become more intrusive.

"What drives the economy is trade and investments, especially foreign trade. Investments can flow both ways... We must facilitate foreign trade. We must facilitate investments," Chidambaram said.

The minister said cautioned was also needed because without the monetary threshold the agency could be swamped with lot more cases.

"We must be extremely selective in deciding which cases to prosecute under the money laundering law. Otherwise, we will be overwhelmed with cases that we would be required to prosecute," he said.

The finance minister also called for greater international cooperation to deal with money laundering that was behind crimes such as human and drug trafficking and terror financing."It is important that agencies across the world cooperate, share technology, share information and chase the offenders," Chidambaram said.