Assets worth over $12 billion have been attached since 2014 under the Prevention of Money Laundering Act (PMLA). Additionally, assets exceeding $1.8 billion have been recovered in the past four years under the Fugitive Economic Offenders Act (FEOA), 2018.
About the Fugitive Economic Offenders Act, 2018
- The FEOA is a key piece of legislation created to deal with the problem of economic offenders who leave the nation to avoid being prosecuted or who refuse to come forward to answer for their actions.
- Among other things, this act gives authorities the right to seize these people’s illicit assets and prevent them from bringing or defending civil claims.
Key Provisions of the Fugitive Economic Offenders Act:
(1) Definition of Fugitive Economic Offender:
- An individual for whom an arrest warrant has been issued for committing one of the act’s enumerated offences and the value of the offence is at least Rs. 100 crore is referred to as a “fugitive economic offender.”
- The statute lists many offences, such as forging official stamps or money, dishonouring checks, money laundering, and creditor fraud.
(2) Declaration of a FEO:
- A special court (established under the Prevention of Money Laundering Act, 2002) may designate someone as a fugitive economic offender after taking into account their application.
- The court has the authority to seize any property, whether it is located in India or elsewhere, including benami properties and proceeds of crime.
- All ownership rights and titles to the property pass to the central government upon confiscation, free from any liens.
- An administrator may be chosen by the central government to oversee and dispose of these holdings.
(3) Bar on Filing or Defending Civil Claims:
- According to the Act, a declared fugitive economic offender may neither bring nor defend a civil claim in any civil court or tribunal.
- Additionally, any corporation or limited liability partnership in which such a person holds a controlling stake, serves as a promoter or serves in a senior executive capacity may be prohibited from bringing or defending civil lawsuits.
- As long as the application is pending before the Special Court, authorities may temporarily seize an accused person’s property.
(4) Powers:
- The powers granted to them by the Fugitive Economic Offenders Act will be used by the authorities under the Prevention of Money Laundering Act, 2002.
- These powers, which are comparable to those of a civil court, include the ability to search individuals suspected of having records or proceeds of crime, search locations on the suspicion that a person is a fugitive economic offender, and seize papers.
Other laws related to FEOs
The existing laws under which such fugitive economic offenders are tried:
1. Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI)
2. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI)
3. Insolvency and Bankruptcy Code (IBC).
