ED searches money changers' premises over alleged FEMA violations

📌 Summary:

• Enforcement Directorate searched multiple locations in Delhi and Uttarakhand (Rishikesh, Dehradun) in an inquiry into alleged FEMA violations
• The probe also covers violations of RBI Master Directions governing money changing activities
• ED intelligence indicated licensed full-fledged money changers, their franchisees and associated entities were engaged in unauthorised foreign exchange transactions
• The entities are also alleged to be involved in hawala transactions

🎯 UPSC Relevance: GS3 Internal Security — money laundering channels (hawala) and enforcement architecture; also touches GS3 Economy (forex regulation)

📝 Prelims Facts:

• FEMA (Foreign Exchange Management Act), 1999 replaced FERA; violations are civil offences (unlike PMLA's criminal provisions)
• Full-Fledged Money Changers (FFMCs) are authorised by RBI under Section 10 of FEMA to buy/sell foreign exchange
• ED enforces FEMA, PMLA and the Fugitive Economic Offenders Act, 2018

🔑 Key Term: Hawala — an informal, trust-based money transfer system operating outside banking channels, often used to evade forex laws and launder money