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The Fugitive Economic Offenders Bill 2018

The Fugitive Economic Offenders Bill, 2018

•President has recently gave his assent to the The Fugitive Economic Offenders Bill, 2018

Background

•There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings.

•The absence of such offenders from Indian courts

•hampers investigation in criminal cases;

•wastes precious time of courts of law,

•undermines the rule of law in India.

•Most such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India.

•The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem.

•It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed.

Non-conviction-based asset confiscation

•The non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011).

•This law empowers the government to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum.

Impact

•The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences.

•This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.

•It is expected that the special forum to be created for
expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.

Who is a Fugitive Economic Offender (FEO)

•The Bill allows for a person to be declared as a fugitive economic offender (FEO) if:

(i) an arrest warrant has been issued against him for any specified offences where the value involved is over Rs 100 crore, and

(ii) he has left the country and refuses to return to face prosecution.

•The Bill lists 55 economic offences in the Schedule, which include: (i) counterfeiting government stamps or currency, (ii) dishonouring cheques, (iii) benami transactions, (iv) transactions defrauding creditors, (v) tax evasion, and (vi) money-laundering.

•The central government may amend the Schedule through a notification.

Salient features of the Bill

•Application before the Special Court for a declaration that an individual is a fugitive economic offender;

•Attachment of the property of a fugitive economic offender;

•Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;

•Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;

•Confiscation of other property belonging to such offender in India and abroad, including benami property;

•Disentitlement of the fugitive economic offender from defending any civil claim; and

•An Administrator will be appointed to manage and dispose of the confiscated property under the Act

Procedure

•To declare a person an FEO, an application will be filed in a Special Court (designated under the Prevention of Money-Laundering Act, 2002) containing details of the properties to be confiscated, and any information about the person’s whereabouts.

•The Special Court will require the person to appear at a specified place at least six weeks from issue of notice.

•Proceedings will be terminated if the person appears.

Provisional Attachment of property

•The Bill allows authorities to provisionally attach properties of an accused, while the application is pending before the Special Court.

•Further, the FEO or any company associated with him may be barred from filing or defending civil claims.

•The authorities under the PMLA, 2002 (Enforcement Directorate) will exercise powers given to them under the Bill.