Fugitive Economic Offenders Bill
17, Jul 2018
Prelims level : Indian polity Mains level : Paper - II Parliament and State Legislature
- It replaces the Fugitive Economic Offenders Ordinance 2018 that provides for confiscating properties and assets of economic offenders like loan defaulters who flee the country.
- The provisions of the ordinance will apply for economic offenders who refuse to return, persons against whom an arrest warrant has been issued for a scheduled offence as well as wilful bank loan defaulters with outstanding of over Rs 100 crore.
- A fugitive economic offender(FEO) is a person against whom an arrest warrant has been issued for committing offence like counterfeiting government stamps or currency, cheque dishonour for insufficiency of funds, money laundering, and transactions defrauding creditors.
- Economic offences are those that are defined under the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, the Customs Act, the Companies Act, Limited Liability Partnership Act, and the Insolvency and Bankruptcy Code.
- At present there is a law to tackle fugitive economic offenders, but the time taken to carry out the due process showed us that there is a need for strict and speedy procedures.
- The bill proposes the formation of a special court under the Prevention of Money-laundering Act, 2002, to declare a person a fugitive economic offender
- The special courts direct the Central government to confiscate all the assets belonging to a fugitive economic offender, including those assets that are proceeds of the crime and that do not belong to the offender.
- Bill would lay down measures to empower Indian authorities to attach and confiscate proceeds of crime associated with economic offenders and the properties of the economic offenders
- The Bill allows authorities to provisionally attach properties of an accused, while the application is pending before the Special Court.
- The bill will deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts
- Courts or tribunals can also bar such offenders or their associated companies from filing or defending civil claims before it.
- The Bill allows the Special Court to exempt properties where certain persons may have an interest in such property (e.g., secured creditors).
Process in the Bill:
- A director or deputy director appointed under the PMLA, 2002 may file an application before a special court ,designated under the 2002 Act to declare a person as a fugitive economic offender.
- The application will contain the reasons to believe that an individual is a fugitive economic offender.
- Besides, the application will have information about his whereabouts, a list of properties believed to be proceeds of a crime for which confiscation is sought, a list of benami properties or foreign properties for which confiscation is sought, and a list of persons having an interest in these properties.
- Upon receiving the application, the special court will issue a notice to the individual, requiring him to appear at a specified place within six weeks.
- If the person appears at the specified place, the special court will terminate its proceedings under the provisions of the Bill.
- Any property belonging to the fugitive economic offender may provisionally be attached without the prior permission of the special court, provided that an application is filed before the court within 30 days.
- Appeals against the orders of the special court will lie before the high court.
- However, the bill does not specify whether the central government will share sale proceeds with any other claimants who do not have such an interest (e.g., unsecured creditors).
- The Bill does not require the authorities to obtain a search warrant or ensure the presence of witnesses before a search. This differs from other laws, such as the Code of Criminal Procedure (CrPC), 1973, which contain such safeguards. These safeguards protect against harassment and planting of evidence
- The Bill provides for confiscation of property upon a person being declared an FEO. This differs from other laws, such as CrPC, 1973, where confiscation is final two years after proclamation as absconder.