Fugitive Economic Offenders Bill 2018

The Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha on March 12, 2018. 

It seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution.

Fugitive economic offender:  A fugitive economic offender has been defined as a person against whom an arrest warrant has been issued for committing any offence (listed in the schedule).  Further the person has: (i) left the country to avoid facing prosecution, or (ii) refuses to return to face prosecution.  Some of the offences listed in the schedule are: (i) counterfeiting government stamps or currency, (ii) cheque dishonour for insufficiency of funds, (iii) money laundering, and (iv) transactions defrauding creditors. 

The Bill allows the central government to amend the schedule through a notification.

Application:  A director or deputy director (appointed under the Prevention of Money-Laundering Act, 2002) may file an application before a special court (designated under the 2002 Act) to declare a person as a fugitive economic offender.

  The application will contain: (i) the reasons to believe that an individual is a fugitive economic offender, (ii) any information about his whereabouts, (iii) a list of properties believed to be proceeds of a crime for which confiscation is sought, (iv) a list of benami properties or foreign properties for which confiscation is sought, and (v) a list of persons having an interest in these properties.
Upon receiving an application, the special court will issue a notice to the individual: (i) requiring him to appear at a specified place within six weeks, and (ii) stating that a failure to appear will result in him being declared a fugitive economic offender.  If the person appears at the specified place, the special court will terminate its proceedings under the provisions of this Bill.

Attachment of property:  The director or deputy director may attach any property mentioned in the application with the permission of a special court.  Further, these authorities may provisionally attach any property without the prior permission of the special court, provided that they file an application before the court within 30 days.  The attachment will continue for 180 days, unless extended by the special court.  If at the conclusion of proceedings, the person is not found to be a fugitive economic offender, his properties will be released.

Declaration as fugitive economic offender:  After hearing the application, the special court may declare an individual as a fugitive economic offender.  It may confiscate properties which: (i) are proceeds of crime, (ii) are benami properties in India or abroad, and (iii) any other property in India or abroad.  Upon confiscation, all rights and titles of the property will vest in the central government, free from all encumbrances (such as any charges on the property).  The central government will appoint an administrator to manage and dispose of these properties.

The Bill allows any civil court or tribunal to disallow a person, who has been declared a fugitive economic offender, from filing or defending any civil claim. 

Powers of the director:  The director or deputy director will have the powers vested in a civil court.  These powers include: (i) entering a place on the belief that an individual is a fugitive economic offender, and (ii) directing that a building be searched, or documents be seized.

Appeal:  Appeals against the orders of the special court will lie before the High Court.

 Source: prsindia.org

FEOB lists offences under 15 Indian laws including IPC and CGST Act. The government has multiple legal options to attach the property of economic-offenders.

The Indian government instead should have focussed upon the extradition treaties with different countries , so  that the option of fleeing the country would be no longer seen as the best way out. Since independence, India has signed treaties of extraction with 48 countries and extradition arrangements with 9 more. However this is not enough.

Until the extradition treaties are given priority the FEOB will not effective.

Fugitive Economic Offenders Bill to deal with the lokes of Vijay Mallya and Nirav Modi

The Union Cabinet has approved the Fugitive Economic Offenders Bill, 2017 on 1st March 2018

The Bill would help in  laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.

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.

Economic offences are those that are defined under the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, the Customs Act, the Companies Act, Limited Liability Partnership Act, and the Insolvency and Bankruptcy Code.

Offences involving amounts of ₹100 crore or more fall under the purview of this law.

Who is a ‘fugitive economic offender’?

According to Section 4 of the law, a ‘fugitive economic offender’ is “any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:

(i) leaves or has left India so as to avoid criminal prosecution; or

(ii) refuses to return to India to face criminal prosecution.”

How is a person declared an offender?

A Director, appointed by the central government, will have to file an application to a Special Court to declare a person as a ‘fugitive economic offender’.

Under Clause (2) of Section 6, the application must contain:

“(a) reason/s for the belief that an individual is a fugitive economic offender;

(b) any information available as to the whereabouts of the fugitive economic offender;

(c) a list of properties or the value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought;

(d) a list of properties owned by the person in India for which confiscation is sought;

(e) a list of persons who may have an interest in any of the properties listed under sub-clauses (c) and (d).”

The Director has the power to attach any property the accused holds.

What does the offender have to do?

The Court will issue a notice to the person named a ‘fugitive economic offender’. Within six weeks from the date of notice, the person will have to present themselves at “a specified place at a specified time”. If the offender fails to do so, they will be declared a ‘fugitive economic offender’ and their properties as listed in the Director’s application will be confiscated.

Once property is confiscated, can the offender file a civil claim?

No. Section 11 of the Act disqualifies those declared as offenders from either filing or defending a civil claim in court.

What happens to the properties?

The Special court will appoint an ‘administrator’ to oversee the confiscated property. This person will be responsible for disposing of the property as well, and the property will be used to satisfy creditors’ claims.

After two instances of businessmen  fleeing the country to avoid being arrested for economic fraud, Finance Minister Arun Jaitley had announced in last year’s Union Budget that the government would soon bring about a law that would allow the state to take possession of properties belonging to such offenders. 

Salient features of the Bill:

Application before the Special Court for a declaration that an individual is a fugitive economic offender;Attachment of the property of a fugitive economic offender;Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;Confiscation of other  property belonging to such offender in India and abroad, including benami property;Disentitlement of the fugitive economic offender from defending any civil claim; andvii. An Administrator will be appointed 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. Further, provision has been made for appointment of an Administrator to manage and dispose of the property in compliance with the provisions of law.

Implementation strategy and targets:

In order to address the lacunae 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 Bill is being proposed. The Bill 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 Bill. 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 Bill.

Sources:

1. The Hindu

2. http://pib.nic.in/newsite/PrintRelease.aspx?relid=176920

Enemy Property Amendment and Validation Act and it's effect on China - EconomicTimes

The amendment of the 49-year-old Enemy Property (Amendment and Validation) Act after which the Narendra Modi government plans to auction more than 9,400 properties of those who took citizenship of China has made China jittery. 

Chinese investment in India has grown rapidly in the past few years. China fears India can confiscate assets of its companies, such as Xiaomi and Lenovo, if the two countries enter a military conflict. Last year, Indian and China faced off for months over construction by Chinese troops in the Doklam region. Though the conflict was resolved, tension persists in India-China relations. 

"If China and India become involved in a military conflict, the assets of Chinese companies doing business in India may be confiscated by the Indian government," said an article in state-run Chinese news outlet Global Times. 

According to data provided in the report of the parliament select committee on the bill, there are 9,280 immovable properties belonging to Pakistani nationals encompassing 11,882 acres. The total value of immovable properties that are vested with the custodian stood at Rs 1.04 lakh crore. Movable vested properties consist of shares in 266 listed companies valued at Rs 2,610 crore; shares in 318 unlisted companies valued at Rs 24 crore; gold and jewellery worth Rs 0.4 crore; bank balances of Rs 177 crore; investment in government securities of Rs 150 crore and investment in fixed deposits of Rs 160 crore. 

Besides this, there are 149 immovable enemy properties of Chinese nationals with the custodian in West Bengal, Assam, Meghalaya, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka and Delhi. 

Source:
https://m.economictimes.com/news/politics-and-nation/modis-amended-enemy-property-law-gives-jitters-to-china/amp_articleshow/62601031.cms

Avoid These 10 Biggest Risks Of Mobile Banking - From Siliconindia.com

The pace of life is increasing, so is the need of people to adjust with it. ‘The quicker the better’ is the latest slogan and as such people rely a lot in technology to make their life better. The major influence of technology can be seen in banking sector that evolved over the years. Gone are the days when people used to queue in front of banks to deposit a check or fulfill a mere banking formality. But now the trend is of mobile banking. But like most of the stories have a flip side, so thus mobile banking, reports Sienna Kossman of U.S. News.

Mobile banking brings pleasure as well as pain because of the dangers mentioned hereof–

1. Information in Mobile devices is as vulnerable as in computers

It’s a well known fact that feeding extensive private information in public computers is dangerous. So is the case in mobile devices that act as tiny computers. “Mobile banking apps are connected to wireless networks, and these networks are inherently insecure as they broadcast their messages into the open air,” said Ron Vetter, co-founder of Mobile Education LLC and member of IEEE Computer Society.

2. Having a Password is necessary

Using your phone or device without password is like leaving your home unlocked while you are away. It enhances the chances of misuse, if you ever lose your phone. To ensure protection of your bank information, a complicated password is most desired. Without proper security measures like password, anyone can log into your app and get access to your bank details. Passwords might not be able to save you entirely from mobile info theft but would at least increase your chances of survival.

3. Never allow your device to auto-save password

Allowing your device to auto-save your password is like having no password at all. “One should never allow apps to remember usernames and/or passwords,” said Ron Vetter. The information becomes easily available to anyone who can lay a hand on your mobile or device if the username and password is already saved.

4. Resist using shared devices

Using shared devices for mobile banking increases the chances of losing valuable account information. Make sure that other users are not surfing high-risk sites as it enhances the probability of users downloading key-logging software onto your device and hence compromise your mobile banking session.

5. Depositing check with the help of camera and banking app

Banks try not to provide instant funds to those who deposit checks remotely with the help of a camera and banking app. The time taken to release funds when a check is deposited in ATM or bank is much less than time spent waiting for funds when you provide check via banking app. This is a measure to protect banks against fraud.

6. Download apps directly from bank’s website

There are a lot of fake apps on the run and using one of them may make you lose important information and eventually detach you from your money. Just because an app is downloaded from an app store does not ensure it authenticity. “Consumers tend to assume that just because an application is on an app store, it’s been heavily vetted by either Google, Apple or otherwise,” said Doug Johnson, vice president of risk management at the American Bankers Association.

7. Some devices are more prone to viruses than others

“In the fourth quarter of 2012, 97 percent of all of the malware released into the mobile environment was targeted against Android,” said Julie Conroy, a research director for Aite Group. Android has been a current favourite of developers of malware viruses since most other brands are not immune to viruses. Smart phones are more susceptible to viruses and hence more prone to losing valuable banking information.

8. Use storage cards to save bank details

Never save sensitive information directly in your phone and instead use storage cards. Most of the time, your phone might save information even after you have cleaned its memory. Try and use a program that will completely clean your device especially before you discard or resell your mobile.

9. Always update security apps

Do not ignore notification about security updates since it is most essential in case you have confidential information saved in your device. “Sometimes those updates include security updates, and you want to make sure you have the latest and greatest version of the whole app,” Julie Conroy said.

10. Strong network means stronger security

The probability of losing messages or information in transit is much higher when operating network connectivity is low since mobile apps broadcast data into open air. While doing mobile banking, make sure you are in a strong network service range.


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Avoid These 10 Biggest Risks Of Mobile Banking:

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