q-enumerate-the-key-provisions-and-significance-of-the-fugitive-economic-offenders-act-2018

Q) Enumerate the key provisions and significance of the Fugitive Economic Offenders Act, 2018.

Why this question?

Issues of current importance 

Key demand of the Question 

Key features of FEO Act, 2018 and its significance.

Directive

Enumerate- specifically enlist the provisions in a point wise format.

Introduction 

Define what fugitive economic offenders are.

Body

In the first part, highlight the features of FEO Act, 2018.

In the next part, discuss the significance of the Act.

Conclusion

Conclude with a way forward.

Model Answer

The Fugitive Economic Offenders Act, 2018 seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution or refuse to return to the country to face prosecution.

Features of the Act

  • A fugitive economic offender has been defined as a person against whom an arrest warrant has been issued for committing an offence listed in the schedule of the Bill, and the value of the offence is at least Rs 100 crore, and who (i) has left India so as to avoid criminal prosecution; or (ii) being abroad, refuses to return to India to face criminal prosecution.
  • Some of the offences listed in the act are:
    • Counterfeiting government stamps or currency.
    • Cheque dishonour.
    • Money laundering.
    • Transactions defrauding creditors.
  • Declaration of a Fugitive Economic Offender:
    • After hearing the application, a special court may declare an individual as a fugitive economic offender and may confiscate properties which are proceeds of crime, Benami properties and any other property, in India or abroad.
    • Upon confiscation, all rights and titles of the property will vest in the central government, free from encumbrances (such as any charges on the property).
    • The central government may appoint an administrator to manage and dispose of these properties.
  • Bar on Filing or Defending Civil Claims:
    • The Act allows any civil court or tribunal to prohibit a declared fugitive economic offender from filing or defending any civil claim.
    • Any company or limited liability partnership where such a person is a majority shareholder, promoter, or a key managerial person, may also be barred from filing or defending civil claims.
    • The authorities may provisionally attach properties of an accused, while the application is pending before the Special Court.
  • Powers:
    • The authorities under the Prevention of Money laundering Act (PMLA), 2002 will exercise powers given to them under the Fugitive Economic Offenders Act.
    • These powers will be similar to those of a civil court, including the search of persons in possession of records or proceeds of crime, the search of premises on the belief that a person is an FEO and seizure of documents.

Significance of the Act

  • It aims to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts, to preserve the sanctity of the rule of law in India and for matters connected therewith or incidental thereto.
  • 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.

There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings. The Act is a significant development in the process of tracking the fugitive economic offenders.