The Union cabinet chaired by Prime Minister Narendra Modi on March 1 approved the proposal to introduce the Fugitive Economic Offenders Bill (FEO) 2018 that aims to confiscate the properties of financial offenders and defaulters.
The move comes in the wake of many financial defaulters including Nirav Modi, Mehul Choksi and Vijay Mallya fleeing the country to escape the law.
The proposed Bill aims to deter, seize and sell assets of economic offenders who escape overseas after committing financial malpractices in the country. Offenses worth Rs 100 crore or more come under the purview of the Bill.
The Fugitive Economic Offenders Bill, 2018 empowers the govt. to seize & sell assets owned by an economic offender evading the laws of the land.The new bill will also ensure that confiscation does not face any civil claims of stakeholders. #crackdownoncorruption pic.twitter.com/SjzvLRbXtW— Dharmendra Pradhan (@dpradhanbjp) 1 March 2018
All you need to know about FEO Bill
- The Bill defines Fugitive Economic Offender as who has an arrest warrant issued in respect of a scheduled offense and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.
- The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to come back to India to face trial for the scheduled offenses.
- The Bill aims to help banks and other financial institutions achieve higher recovery from financial defaults committed by fugitive economic offenders and improving the financial health of such institutions.
- Once the Bill is passed by both houses, an administrator will be appointed to manage and dispose of the confiscated property under the Fugitive Economic Offenders Act.
- The Bill proposes to make provisions for a special court under the Prevention of Money Laundering Act, 2002 (PMLA) to declare a person as a Fugitive Economic Offender.
- The suggested Bill will empower law enforcement agencies to confiscate the assets of economic absconders till they submit themselves before the jurisdiction of India.
- Features of the suggested Fugitive Economic Offenders Bill include confiscation of other property belonging to such offender in India and abroad, including benami property.
- If reports are to be believed, the law may come into effect in April and it would apply with retrospective effect.
- In September last year, Union Law ministry had approved the Bill
Union Cabinet on the same day confirmed the establishment of National Financial Reporting Authority (NFRA). The government removed the powers of the Institute of Chartered Accountants of India to initiate disciplinary action against Chartered Accountants and audit firms dealing with listed companies, specific companies, and large unlisted firms. The powers would now be vested with the new regulatory authority.
The NFRA will help enforcement of auditing standards and quality of audits to strengthen the independence of audit firms and quality of audits and thereby enhancing investor and public confidence in financial discloser of companies.
In the budget 2017-18, the government announced that it was considering introducing legislative changes to tackle financial defaulters.
(with inputs from PIB)