Union Cabinet approves Fugitive Economic Offenders Bill, 2018

Mar 5, 2018 10:01 IST
Union Cabinet approves Fugitive Economic Offenders Bill, 2018

The Union Cabinet chaired by Prime Minister Narendra Modi on March 1, 2018 approved the proposal of the Ministry of Finance to introduce the Fugitive Economic Offenders Bill, 2018 in Parliament.

Objective

The main objective of the bill is to lay down measures to deter fugitive economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.

Impact

• The Bill is expected to restore law and order, as with its implementation the fugitive economic offenders would be forced to return to India to face trial for their offences.

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

Who is a Fugitive Economic Offender?

A fugitive economic offender is any individual against whom a warrant for arrest in relation to a schedule offence has been issued by any court of India who, either leaves or has left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution.

A scheduled offence refers to a list of economic offences contained in the schedule of the bill including cheating, forgery, fraud, corruption, insider trading and customs evasion.

 

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Following are the key features of the bill:

• The bill provides for the creation of a ‘Special Court’ under the Prevention of Money-laundering Act, 2002 to declare a person as a Fugitive Economic Offender.

• The process of repatriation of an economic fugitive under the act begins with the submission of an application before the special court declaring that an individual is a fugitive economic offender.

• The application should comprise an attachment of the property of the fugitive.

• After going through the application, the special court would issue a notice to the individual alleged to be a fugitive economic offender.

• This would be followed by confiscation of the property of the individual resulting from the proceeds of crime.

• The offender’s other properties located in India and abroad including benami property would also be confiscated.

• Further, the offender would be disentitled from defending any civil claim.

• Finally, an administrator will be appointed to manage and dispose of the confiscated property under the Act.

Further, only those cases would come under the jurisdiction of the bill that involve a total value of Rs 100 crore or more.

Other Details

If at any point during the course of the proceedings the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would come to an end.

Further, the bill provides for all necessary constitutional safeguards to the offender in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court.

Background

• The Bill was first announced in Finance Minister Arun Jaitley’s 2017 Budget speech.

• India has witnessed several instances of economic offenders fleeing the country to avoid facing criminal proceedings such as industrialist Vijay Mallya and recently, billionaire jewellery designer Nirav Modi.

• Most of the cases involve non-repayment of bank loans, which is 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.

• Therefore, it was felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed.

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