The Fugitive Economic Offenders Act, 2018

Summary of Fugitive Economic Offenders Act, 2018
The Act empowers Special Courts to declare a person as a Fugitive Economic Offender (FEO) and provides for the attachment and confiscation of their properties to ensure accountability and preserve the rule of law.
Key Provisions
1. Declaration of Fugitive Economic Offender
• Eligibility: A person against whom an arrest warrant has been issued for a scheduled economic offence involving ₹100 crore or more and who has left India or refuses to return to face prosecution may be declared a Fugitive Economic Offender.
• Application to Special Court: The Director or Deputy Director under the Prevention of Money-laundering Act, 2002 may apply to the Special Court for such a declaration.
2. Attachment and Confiscation of Property
• Attachment of Property: The authorities may attach the offender's properties, including proceeds of crime, before the declaration by the Special Court.
• Confiscation: Upon declaration as a Fugitive Economic Offender, the Special Court may order confiscation of the offender's properties, whether in India or abroad, subject to the Act.
3. Proceedings before the Special Court
• Notice to the Individual: The Special Court issues a notice requiring the alleged offender to appear at the specified place and time.
• Declaration: If the individual fails to appear within the prescribed period, the Court may declare the person a Fugitive Economic Offender after considering the evidence.

4. Disentitlement from Civil Claims
• Restriction on Civil Proceedings: A declared Fugitive Economic Offender, or a company in which they hold a majority interest, may be barred from pursuing or defending civil claims in Indian courts.
• Deterrence: This provision discourages offenders from evading criminal prosecution while continuing to benefit from the Indian legal system.

Legislative History: The Fugitive Economic Offenders Act, 2018

Short Title The Fugitive Economic Offenders Act, 2018

Act Number / Year Act No. 17 of 2018

Act ID (India Code) A2018-17

Presidential Assent / Enactment Date July 31, 2018

Enforcement Date April 21, 2018

Nodal Ministry Ministry of Finance

Precedent & Statutory Rationale

1. Combating High-Profile Financial Flight and Defraudment:

o Prior to 2018, the Indian financial and judicial systems faced severe challenges when prominent individuals accused of major economic scams, loan defaults, and banking frauds fled the country to evade criminal prosecution and trial.

o Traditional mechanisms under the Code of Criminal Procedure (CrPC) and the Prevention of Money Laundering Act (PMLA) often fell short in swiftly attaching properties and preventing the dissipation of assets situated within or outside India by fugitives avoiding judicial summons.

2. Deterrence, Asset Confiscation, and Rule of Law:

o The Act was formulated 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, thereby preserving the sanctity of the rule of law.

o It empowers designated Special Courts to declare individuals as "fugitive economic offenders" and order the immediate confiscation of their proceeds of crime and properties, while barring them from defending civil claims in legal proceedings.

Parliamentary Trajectory & Enactment

• Formulation: Initially promulgated via the Fugitive Economic Offenders Ordinance, 2018, in April 2018 before being introduced as a comprehensive bill by the Ministry of Finance.

• Parliamentary Passage: Debated and passed by both houses of the Parliament of India, receiving formal presidential assent on July 31, 2018.

• Enforcement: Enforced on April 21, 2018.

• Source: India Code and Ministry of Law and Justice Official Records