- The Union Cabinet approved the promulgation of the Fugitive Economic Offenders Ordinance 2018, which would empower the government to seize the domestic assets of those deemed by a relevant court to be fugitive economic offenders.
- There have been 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 has several deleterious consequences –
- First, it hampers investigation in criminal cases.
- Second, it wastes precious time of courts of law.
- Third, it undermines the rule of law in India.
- Government’s attempt pass Bill:
- The government had in Budget 2017-18 announced that it was considering a law that would enable it to seize the property such absconders, following which the Union Cabinet approved the Fugitive Economic Offenders Bill 2018 to be introduced in Parliament.
- The Bill was introduced in the LokSabha, but was not passed due to disruptions and adjournments in both Houses of Parliament.
Highlights of ordinance:
- Definition of offender:
- A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution.
- Such economic offenders will be tried under the Prevention of Money Laundering Act (PMLA).
- A scheduled offence refers to a list of economic offences contained in the Schedule to the Ordinance.
- Offence like counterfeiting government stamps or currency, chequedishonour for insufficiency of funds, money laundering, and transactions defrauding creditors etc. are covered.
- Applicability: To ensure that the court is not over-burdened, only those cases where the total value involved in such offences is ₹ 100 crore or more will be within the purview of the Ordinance.
- Special Court:
- The Ordinance has a provision for a ‘Special Court’ under the Prevention of Money-laundering Act, 2002 to declare a person as a Fugitive Economic Offender.
- According to the ordinance, an authority (appointed under the PMLA, 2002) may file an application before a special court to declare a person as a fugitive economic offender.
- 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.
- Confiscation of properties:
- 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.
- It also has provision for confiscation of overseas assets, but this will require cooperation and “appropriate arrangements” with overseas nations.
- Empowerment of authorities:
- The Ordinance will empower authorities to attach and confiscate proceeds of crime associated with economic offenders and the properties of the economic offenders.
- It also provides for the appointment of an administrator to manage and dispose of the confiscated property.
- Offenders’ right: The Ordinance removes the offenders’ right to defend a civil claim in the country.
- Rule of law:
- The Ordinance 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.
- And thereby deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
- Higher recovery: 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.