Yojana_July2018_Targeting_Economic_Offenders

 Reference Article: Targeting Economic Offenders

Need for a New Act:

• The banking sector is being impacted by the failure of its clients to service their loans in time
• The existing civil and criminal provisions of law are not entirely adequate to deal with these severe problems
• The number of such default (Ex: Nirav Modi, Vijay Mallaya etc) may increase if they remain unchecked
• The government feels a need for specific act targeting the economic offenders
• Such a law would empower government to seize properties and appropriate the sale proceeds towards loan creditors

The Bill

• Preamble:
  
  • "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."
    
• Defining Fugitive Economic Offender:
  • "Any individual against whom a warrant of arrest in relation to a Scheduled Offence has been issued by any court in India who:
  • has left India so as to avoid criminal prosecution; or
  • being abroad, refuses to return to India to face criminal prosecution"
• Deterrence:
  
  • The bill brings under purview those cases where the total value of the economic offences is Rs 100crores or more
  • It will force the absconding fugitive economic offenders to face trial for their offences
  • The bill allows for the attachment of the properties of the fugitive economic offender
  • It will go a long way to help banks and other financial institutions to achieve recovery from the absconding defaulters
• Incentive for Compliance
  • The bill proposes to give relief to the alleged offender if in case he returns to India prior to declaring him as a fugitive economic offender &
  • If he submits to the appropriate jurisdictional court proceedings under the Act
  • In such compliance the proceedings under the act would cease
• Safeguards:
  • The bill has been well thought out and etched with necessary safeguards
  • It provides for hearing through counsel
  • allowing time to file a reply
  • serving notice of summons whether in India or abroad
  • appeal to High Court have been appropriately provided
• Appeal:
  • Appeal against the order of the Special Court shall lie before the High Court
  • The Appeal must be referred within a period of 30 days from the date of judgment
  • The High Court may entertain an appeal after the expiry of the said 30 days if they are satisfied that the appellant had sufficient cause for not preferring the appeal within the due date
  • No appeal shall be entertained by the High Court after the expiry of 90 Days from the date of judgment
• Other Salient Features
  • Application before the Special Court for a declaration that an individual is a fugitive economic offender
  • Attachment of the property of a fugitive economic offender
  • Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender
  • Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime
  • Confiscation of other property belonging to such offender in India and abroad, including benami property
  • Disentitlement of the fugitive economic offender from defending any civil claim
  • An Administrator will be appointed to manage and dispose of the confiscated property under the Act

Other Steps taken by the Government against Corruption and Black Money

• Special Investigation Team on black money was created to check black money
• Government has restructured India-Mauritius DTAA by taking right to impose capital gains tax in India (source country), in this way, other DTAAs with countries like Singapore, Cyprus etc., also will be modified
• Prevention of Money Laundering Act was amended to allow confiscation of property equivalent in value of black money stashed abroad
• Amendment to Benami Property Prohibition Act 2016 was made by providing broader and clearer coverage and stricter penal provisions.

Future Prospect:

• It is hoped that Bill will help in Central Government recover the properties of those high net worth individuals who have fled from the country to avoid prosecution.
• he exchequer will be bolstered after recovery from the sale of proceeds.
• It is also expected to act as a deterrent to those who are contemplating or who are in the brink of of committing economic offences and evading law
• However, with time, there will be more clarity regarding the efficiency and the utility of this law

By: Chandan Sharma