Legislation UpdatesNotifications

G.S.R. 501(E).— In exercise of the powers conferred by sub-section (1) read with clause (e) of sub-section (2) of Section 23 and sub-section (6) of Section 12 of the Fugitive Economic Offenders Ordinance, 2018 (1 of 2018), the Central Government hereby makes the following rules, namely:

1. Short title and commencement.— (1) These rules may be called the Fugitive Economic Offenders (Procedure for sending Letter of Request to the Contracting State for Service of Notice and Execution of Order of the Special Court) Rules, 2018.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions.— (1) In these rules, unless the context otherwise requires,—

(a) “authorised officer” means an officer not below the rank of a Deputy Director authorised by the Director for the purposes of these rules;

(b) “form” means the form appended to these rules;

(c) “Ordinance” means the Fugitive Economic Offenders Ordinance, 2018 (1 of 2018);

(2) All other words and expressions used and not defined in these rules but defined in the Ordinance shall have the meaning respectively assigned to them in the said Ordinance.

3. Procedure for service of notice of the Special Court on fugitive economic offenders abroad through the letter of request.—

(1) Where an application under section 4 of the Ordinance has been duly filed, the Special Court shall issue a notice to an individual who is alleged to be a fugitive economic offender.

(2) The service of notice of the Special Court as referred to in sub-rule (1) shall be made through a letter of request.

(3) The letter of request shall be in the Form appended to these Rules.

(4) While finalising the letter of request, the Enforcement Directorate shall ensure the compliance of all legal requirements.

(5) The authorised officer shall forward the letter of request in the form in triplicate to the Ministry of Home Affairs.

(6) The nodal officer in the Ministry of Home Affairs shall ensure the timely transmission of the letter of request to the contracting State.

(7) The letter of request along with notice of the Special Court shall be forwarded to the authority concerned for effecting service in the contracting State.

(8) The service of notice in any mode under section 10 of the Ordinance shall be treated as effective service by the Special Court.

4. Procedure for issuing a letter of request to a Court or authority in the contracting State for execution of the order of the Special Court.—

(1) The letter of request for execution of the order of the Special Court shall be in the Form appended to these rules.

(2) After issue of letter of request by the Special Court to the Court or the authority concerned in the contracting State for execution of its order, the authorised officer shall forward the same in triplicate to the Ministry of Home Affairs.

(3) The nodal officer in the Ministry of Home Affairs shall ensure the timely transmission of the letter of request to the contracting State.

FORM

[See sub-rule (3) of rule 3 and sub-rule (1) of Rule 4]

Form of the Letter of Request

1. Details of the scheduled offence / brief facts

2. Reference of applicable sections of law (details not necessary)

3. Brief reference of reasons emerged from the enquiry which indicates that the requested fugitive economic offender is present in the contracting State and proceeds of crime or properties of the fugitive economic offender are situated in the contracting State.

4. Brief details of Assistance sought from the contracting State, that is, service of notice or execution of the order of the Special Court.

5. The basis of sending request, that is, provisions of Mutual Legal Assistance Treaty in Criminal Matters between India and the contracting State/any other convention or treaty (Title of such convention/treaty to be given)/or on the basis of Assurance of Reciprocity.

Details in the letter of request

1. Correct official name of the Country

2. Contact Information / Liaison Officer

3. Correct mention of either Treaty or Agreement (MLAT Countries)

4. Assurance of Reciprocity / Reciprocity Undertaking (Non-MLAT Countries)

5. Certified translation into official language

6. Letter of Request to be addressed to the correct Central Authority or the Court of the contracting State.

7. If any contracting State have other requirements and formats which must be followed for expeditious execution of the Letter of Request, that may be complied with while sending the Letter of Request.

[F.No. 6/3/2017-FSLRC]

Ministry of Finance

Legislation UpdatesStatutes/Bills/Ordinances

Fugitive Economic Offenders Ordinance, 2018 has come into force as the President of India has given his assent to the Union Cabinet’s decision to promulgate the said Ordinance. Earlier, the Union Cabinet, in its meeting held on 21st April, 2018, had decided to approve the proposal of the Ministry of Finance to promulgate the Fugitive Economic Offenders Ordinance, 2018.

Fugitive Economic Offenders Ordinance, 2018 (“the Ordinance”) lays down the measures to empower Indian authorities to attach and confiscate proceeds of crime associated with economic offenders and the properties of the economic offenders and thereby deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.

The need for the Ordinance has arisen as there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings. The absence of such offenders from Indian courts has several deleterious consequences – first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India. The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem. In view of the above context, a Budget announcement was made by the Government in the Budget 2017-18 that the Government was considering to introduce legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum.Pursuant to the above announcement, the Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha on the 12th March, 2018. The Fugitive Economic Offenders Bill, 2018 was listed for consideration and passing in Lok Sabha on many occasions after its introduction. The Lok Sabha has since been adjourned sine die and both the Houses of Parliament were prorogued on 6thApril, 2018.

In order to address the deficiency in the present laws and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, the Ordinance is being proposed. The Ordinance makes provisions for a Court (‘Special Court’ under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. A scheduled offence refers to a list of economic offences contained in the Schedule to this Ordinance. Further, in order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Ordinance. The Fugitive Economic Offenders Ordinance, 2018, inter alia provides for–

(i) making an application before the Special Court for a declaration that an individual is a fugitive economic offender;

(ii) attachment of the property of a fugitive economic offender and proceeds of crime;

(iii) issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;

(iv) confiscation of the property of an individual declared as a fugitive economic offender or even the proceeds of crime;

(v) disentitlement of the fugitive economic offender from defending any civil claim; and

(vi) appointment of an Administrator to manage and dispose of the confiscated property under the Act.

If at any point of time in the course of the proceeding prior to the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law. All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for.

Major impact: It is expected that a special forum to be created for expeditious confiscation of the proceeds of crime, in India or abroad,would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.

Since the proposed law would utilise the existing infrastructure of the Special Courts constituted under under the Prevention of Money-laundering Act, 2002 and the threshold of scheduled offence is high at Rs. 100 crores or more, no additional expenditure is expected on the enactment of the Bill.

No. of beneficiaries: The Bill 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.

States/districts covered:   The new law would cover all the States and Districts.

Ministry of Finance