After Mallya, Nirav Modi: Who is a ‘fugitive economic offender’?

3 min read

News:Recently,the special Prevention of Money Laundering Act (PMLA) court has declared Nirav Modi as a fugitive economic offender (FEO) under Fugitive Economic Offenders Act,2018.

Facts:

About Fugitive Economic Offenders Act,2018:

  • Indian Parliament had passed the Fugitive Economic Offenders Act in 2018.
  • The act seeks to confiscate properties and assets of economic offenders that evade prosecution by remaining outside the jurisdiction of Indian courts.
  • The act defines FEO as an individual (a)who has committed offences involving an amount of 100 crore rupees or more and (b)has run away from India to avoid criminal prosecution.
  • A special court has been established under the Prevention of Money laundering Act,2002 to declare a person as a Fugitive Economic Offender.
  • The Special courts can direct the Central government to seize assets of fugitive economic offender including those that are proceeds of the crime.
  • Further,the appeals against the orders of the special court will lie before the High Court.

Additional information:

About Money laundering:

  • Money laundering is the process by which large amounts of illegally received money is given the appearance of having originated from a legitimate source.
  • In India,the money laundering is regulated by the Prevention of Money Laundering Act 2002(PMLA) which came into force in 2005.
  • The act defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.
  • The provisions of this act are applicable to all financial institutions like banks, mutual funds, insurance companies, and their financial intermediaries.
  • The act was amended thrice, first in 2005, then in 2009 and 2012. PMLA(Amendment) Act, 2012 has enlarged the definition of money laundering by including activities such as concealment, acquisition, possession and use of proceeds of crime as criminal activities.