Section 38 of FEMA : Section 38: Empowering Other Officers

Explanation using Example

Imagine a scenario where the Enforcement Directorate (ED), which deals with foreign exchange violations, is investigating a case of large-scale money laundering where foreign exchange rules under FEMA have been breached. The ED suspects that a jewelry business is involved in illegally converting black money into gold and then moving funds overseas without proper disclosure and permissions.

The scale of the operation is vast, and the ED needs assistance from local authorities. Under Section 38 of the FEMA, 1999, the Central Government issues an order authorizing officers from the Customs Department and local police to assist in the investigation. These officers are granted powers to conduct searches, seize documents, and question individuals just like the ED officers, but within the limitations and conditions set by the government.

Consequently, a joint operation is carried out where customs officers raid the jewelry shop while the police secure the premises, ensuring that all evidence is collected lawfully and that the suspects are detained as per the legal provisions. This collaboration, enabled by Section 38, allows for a more effective enforcement of FEMA regulations.