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Fugitive Economic Offender

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A fugitive economic offender is an individual who has committed some specified offence(s) involving an amount of one hundred crore rupees or more and has absconded from India or refused to come back to India to avoid or face criminal prosecution in India.

A Fugitive Economic Offender is a person declared so by a 'Special Court' set up under the Prevention of Money-laundering Act (PMLA), 2002, against whom an arrest warrant has been issued in respect of any of the economic offences provided in the schedule to Fugitive Economic Offenders Bill, 2018 and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. Offences under some 15 Acts are listed in the Schedule to the Bill.

The word is defined in Section 2(1)(f) of the Fugitive Economic Offenders Bill, 2018 which lays down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. This Bill as introduced in the Parliament on 12 March 2018 may be seen here. As this could not be passed in the Parliament in that session, the Union Cabinet, in its meeting held on 21 April, 2018, decided to promulgate the Fugitive Economic Offenders Ordinance, 2018 and the same was notified on 21 April 2018. The relevant Rules were notified on 24 April 2018.

The cases where the total value involved in such offences is Rs.100 crore (approx US$15 million) or more, will come under the purview of this Bill. Hence, a fugitive offender term applies only to those who owe more than Rs. 100 crore in the domestic territory of India.

placing the burden of proof for establishing that an individual is a fugitive economic offender is on the Director or the person authorised by the Director appointed under section 49(1) of PMLA.


Implications of being a fugitive economic offender

The property of a fugitive economic offender, resulting from the proceeds of crime, including benami property, can be confiscated once he is declared so by the Court (Provisional attachment may happen before confiscation[1]). Properties abroad are also liable for confiscation. Further, he would be disentitled from defending any civil claim. An Administrator will be appointed to manage and dispose of the confiscated property.

However, if, at any point of time in the course of the proceeding prior to the declaration, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law. All necessary constitutional safeguards 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 have been provided for.


Background:

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 absence of such offenders from Indian courts hampers investigation in criminal cases, wastes precious time of courts of law and undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby 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. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed.

The non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011). Article 54(1)(c) of the UN Convention enables signatories to consider taking such measures as may be necessary to allow confiscation of such property without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases. The Fugitive Economic Offenders Bill, 2018 adopts this principle.

In view of the above context, a Budget announcement was made by the Government in the Budget 2017-18 that the Government was considering to introduce legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum.


Objectives of the Fugitive Economic Offenders Bill

The Bill 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 (meaning list of economic offences appearing in the schedule to the Fugitive Economic Offenders Act). 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.

It is expected that the special forum to be created for expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.


1. “Confiscation” mean the permanent deprivation of property by order of a court or other competent authority;


References


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