Fugitive Economic Offenders Bill, 2017 Approved by Law Ministry Approves

Union Law ministry approved Fugitive Economic Offenders Bill, 2017 to empower government to confiscate property of economic offenders and defaulters who flee India detering economic offenders from evading the process of Indian law by fleeing the country.

Fugitive Economic Offenders Bill

Earlier Finance Minister in 2017 - 18 Budget speech promised legislative changes to confiscate the assets of such fugitives.

Features of Bill

  • Defines fugitive economic offender as individual who has warrant for arrest in relation to economic offence, has left the country, and refuses to return to face criminal prosecution.
  • Burden of proof for establishing that an individual is fugitive economic offender will be on authorities.
  • Bill applicable in cases where the value of offences is over ₹ 100 crore.
  • Allows Financial Intelligence Unit (FIU) - technical snoop wing under the finance ministry, to file for declaration of fugitive as economic offender for confiscation of their assets.
  • Bill entrusts responsibility to try such cases to the courts under Prevention of Money Laundering Act, 2002 (PMLA) .
  • Bill provisions appointment of an administrator to dispose property of fugitive offender to pay off the creditors.
  • Has provisions to override provisions of other existing laws.

Current Laws

Existing laws under which such fugitive economic offender are tried include:

  • Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI)
  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI)
  • Insolvency and Bankruptcy Code (IBC)

Need for the New Legislation

  • Recently big offenders like Vijay Mallya fled the country to escape prosecution.
  • Vijay Mallya, chief of Kingfisher Airlines owes over ₹ 9,000 crore to various Indian banks.
  • Such cases have several consequences hampering investigation in criminal cases, wastes precious time of courts of law, and undermines the rule of law.

What is Financial Intelligence Unit (FIU) ?

Financial Intelligence Unit-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister. Set by the Government of India in November 2004 as the central agency responsible for:

  • Receiving, processing, analyzing, and disseminating information relating to suspect financial transactions.
  • Coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the efforts against money laundering

Examrace Team at Aug 28, 2021