Related Topic in KAS Prelims Syllabus:
Economy [Paper-II]: Indian Public Finance, Structure of Indian Banking and Non- Banking Financial Institutions and reforms
- Prevention of Money Laundering Act (PMLA) Court has declared PNB scam accused Nirav Modi a fugitive economic offender under the Fugitive Economic Offenders Act.
- In January 2019, Vijay Mallya was declared as an FEO. He is the first person to be declared so under the Fugitive Economic Offenders Act. The order was passed under Section 2F of FEOA by the PMLA court.
Who is a Fugitive Economic Offender (FEO)?
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.
Fugitive Economic Offenders Act (FEOA)
- FEOA, which became a law on July 31, 2018, allows for declaring a person as an offender after an arrest warrant has been issued against the individual and the value of offences exceeds 100 crore.
- Another condition for declaring a person a fugitive economic offender (FEO) is when the individual refuses to return to the country to face prosecution in the specified cases.
- As per the law, a special court can order the confiscation of a FEO’s properties, including those which are benami, and the proceeds of crime in and outside India.
- Once properties are confiscated, the Union government has the right over them, and it can dispose them after 90 days.
Significance of FEOA
- The Act would deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
- It 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.
- 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.