Corruption Challenges – Lokpal, POCA, etc

$1.8 billion recovered under Fugitive Economic Offenders Act


From UPSC perspective, the following things are important :

Prelims level : Fugitive Economic Offenders Act, 2018

Mains level : Not Much

Central Idea

  • 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 significant legal instrument designed to address the issue of economic offenders who flee the country to evade criminal prosecution or refuse to return to face charges.
  • This act empowers authorities to confiscate the ill-gotten gains of these individuals and bar them from filing or defending civil claims, among other provisions.

Key Provisions of the Fugitive Economic Offenders Act:

(1) Definition of Fugitive Economic Offender:

  • A “fugitive economic offender” is an individual against whom an arrest warrant has been issued for committing an offense listed in the Act, and the value of the offense is at least Rs. 100 crore.
  • Offenses listed in the act include counterfeiting government stamps or currency, cheque dishonor, money laundering, and transactions defrauding creditors.

(2) Declaration of a FEO:

  • After considering an application, a special court (designated under the Prevention of Money Laundering Act, 2002) may declare an individual as a fugitive economic offender.
  • The court may confiscate properties that are proceeds of crime, benami properties, or any other property, whether in India or abroad.
  • Upon confiscation, all rights and titles of the property vest in the central government, free from encumbrances.
  • The central government may appoint an administrator to manage and dispose of these properties.

(3) 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.
  • Furthermore, any company or limited liability partnership where such an individual is a majority shareholder, promoter, or a key managerial person may also be barred from filing or defending civil claims.
  • Authorities may provisionally attach properties of an accused while the application is pending before the Special Court.

(4) Powers:

  • The authorities under the Prevention of Money Laundering Act, 2002, will exercise powers conferred upon them by the Fugitive Economic Offenders Act.
  • These powers are akin to those of a civil court and include the search of persons in possession of records or proceeds of crime, the search of premises upon belief that a person is a fugitive economic offender, and the seizure of documents.

Other laws related to FEOs

  • The existing laws under which such fugitive economic offenders are tried include:
  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) and
  3. Insolvency and Bankruptcy Code (IBC).

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