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Why in News?

  • A special court on Thursday declared absconding Nirav Modi, prime accused in the Punjab National Bank scam, a fugitive economic offender (FEO).
  • The declaration allows the government to initiate action to confiscate the offender’s properties.
  • Nirav Modi is the second person to be declared a fugitive economic offender, under the new fugitive Economic Offenders Act, after Vijay Mallya.

“Fugitive Economic Offender”

  • A person can be named an offender under this law if there is an arrest warrant against him or her for committing any offence listed in the schedule of the act and for involvement in economic offences involving at least Rs. 100 crore or more and has fled from India to escape Legal Action.
  • Major criteria that have to be satisfied are:
    • The Person has left the country to avoid facing prosecution.
    • He refuses to return to India to face prosecution.

About Fugitive Economic Offenders Act, 2018:

  • The Fugitive Economic Offenders Act, 2018 seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution.
  • Offences involving amounts of Rs. 100 crore or more fall under the purview of this law.
  • Some of the offences listed in the schedule of the bill are-counterfeiting government stamps or currency, cheque dishonour for insufficiency of funds, money laundering, transactions defrauding creditors etc.

Proceedings as per the Act:

  • 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.
  • Attachment of the property of 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.
  • All cases under the proposed law will be tried under the Prevention of Money Laundering (PMLA) Act and the administrator will sell the fugitive’s properties to pay off the lenders.
  • The proposed law will have an overriding effect over all other pieces of legislation.

United Nations Convention against Corruption:

  • Non conviction based asset confiscation for corruption related cases are enabled under provisions of United Nations Convention against Corruption which India ratified in 2011. This Act is adopted based on this principle.
    • The United Nations Convention against Corruption is the only legally binding universal anti-corruption instrument.
    • It was adopted by the General Assembly in 2003 and entered into force on December 14, 2005.
    • The Convention covers five main areas: preventive measures, criminalization and law enforcement, international cooperation, asset recovery, and technical assistance and information exchange.
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