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The Fugitive Economic Offenders Bill explained


New Delhi, July 26: The Parliament on Wednesday passed a bill that seeks to prevent big economic offenders like Vijay Mallya and Nirav Modi from fleeing the country and evading the legal process.

Finance Minister Piyush Goyal speaks in the Lok Sabha during the Monsoon session of Parliament

The Fugitive Economic Offenders Bill, 2018 was passed by the Rajya Sabha with a voice vote. The Lok Sabha had cleared the measure on July 19.

Finance Minister Piyush Goyal said instances of people running away and evading legal process was increasing, which needed to be stopped as the current laws do not allow dealing with the "severity of the problem".

"Criminal law does not allow us to impound their property," he added.

"This bill is an effective, expeditious and constitutional way to stop these offenders from running away. Legislative changes or a new law must be in place to confiscate assets of such absconders till they don't present themselves in front of the courts. We will also work out what has to be done with the confiscated assets," Goyal said.

While replying to the debate, he said there cannot be a situation where economic offenders run away from the country and also protect their properties.

Justifying the financial limit of Rs 100 crore for invoking the provision of this new law, Goyal said it was being done to catch the big offenders and not to clog the courts.

The Enforcement Directorate will be the investigative agency under the Act, he added.

Fugitive Economic Offenders Bill:

The Bill is primarily aimed at stopping economic offenders who leave the country to avoid legal process. Offences involving amounts of Rs 100 crore and above fall under the purview of this law. These offences are those defined under the Indian Penal Code, SEBI Act, Customs Act, Companies Act, Prevention of Corruption Act, Limited Liability Partnership Act, and the Insolvency and Bankruptcy Code.

Definition of a fugitive economic offender:

Section 4 of the law, states that a 'fugitive economic offender' is "any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:

(i) leaves or has left India so as to avoid criminal prosecution; or

(ii) refuses to return to India to face criminal prosecution."

How is a person declared an economic offender:

The Central government through a director appointed by it will have to file an application before a special court to declare a person as fugitive economic offender. Once the following conditions are fulfilled the director has the right to seize or attach the properties of the offender.

Under Clause (2) of Section 6, the application must contain the following:

(a) reason/s for the belief that an individual is a fugitive economic offender;

(b) any information available as to the whereabouts of the fugitive economic offender;

(c) a list of properties or the value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought;

(d) a list of properties owned by the person in India for which confiscation is sought;

(e) a list of persons who may have an interest in any of the properties listed under sub-clauses (c) and (d)."

The process:

Once an application is moved, the court would issue notice to the person concerned. The accused would have to present himself before the court within six weeks of the notice being issued. In case he or she fails to be present, the court would declare the person a fugitive economic offender, following which the properties as listed would be confiscated.

Under Section 11, the person declared a fugitive economic offender loses the right to file a civil claim in court.

Confiscating properties:

The court would then appoint an administrator to oversee the confiscated property. The administrator would be responsible for disposing off the property, following which the amount would be used to satisfy a creditor's claim.

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