Fugitive Economic Offenders Act - FEO Act

By : Neha Dhyani

Updated : Jun 14, 2022, 9:00

The Fugitive Economic Offenders Act has been implemented in India in 2018 to punish economic offenders who have been given a warrant of arrest for allegedly committing a financial crime worth at least Rs. 100 crore.

They are called fugitive economic offenders as they not only committed heinous financial crimes but also escaped the nation to evade any kind of punishment.

Fugitive Economic Offenders Act Objective

The Fugitive Economic Offenders Act was passed both in the Rajya Sabha and Lok Sabha, receiving the presidential assent. The enactment of this law was crucial as these criminals borrowed enormous loans from banks and fled the country without paying the dues.

This felony of finance enfeebles the overall economic condition of the country, leading to bankruptcy. The goal was to identify and punish the criminals responsible for such scams.

Essential Requisites to File a Complaint Under the FEO Act

The essential requisites that need to be shared to file a complaint against a financial fraud accusation under the FEO Act include fact-checked reasons to file the complaint, detailed information regarding the suspect's whereabouts, The list of properties of the accused, located both inside and outside of the country, includes Benami properties or transactions made by the suspect inside the country as well as outside of it.

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Significance of Fugitive Economic Offenders Act

The declaration of criminals as fugitive economic offenders necessitates the fulfilment of some essential prerequisites. To begin with, an application should be filed with a special court authorised under the Prevention of Money-Laundering Act, 2002, comprising all pertinent information on the suspected economic offender. All of the suspect's properties that can be impounded should be listed in the application.

The Special Court would then send a notice requiring the suspect to appear at a specified location within six weeks of the date of the notice. If the person appears physically before the judiciary system, the proceedings will be terminated. However, if the application process is pending, the Fugitive Economic Offenders Act empowers assigned authorities to confiscate a perpetrator's property provisionally.

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Fugitive Economic Offenders Act Concerns

A court or tribunal can prevent the FEO or any entity linked with them from initiating or opposing civil claims under the Act. This could be in violation of Constitutional rights, which, according to some analyses, also include the right to obtain the law.

The Act empowers the federal government to seize an FEO's property. Exclusions are also granted to different qualities where there are parties having an interest in the property, such as secured creditors. However, the Act is silent on whether the national government will distribute property sale revenues to other claimants who do not have the same level of enthusiasm as financial creditors.

The FEO Act can play a major role in uplifting the country's economy by taking exemplary actions against economic offenders.

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FAQs on Fugitive Economic Offenders Act

Q1. What is meant by "fugitive economic offenders" that are mentioned in the Fugitive Economic Offenders Act?

The fugitive economic offenders that are mentioned in the Fugitive Economic Offenders Act refer to people who have been issued a warrant of arrest for being accused of committing a financial crime with a value of at least Rs. 100 crore.

Q2. What is the primary goal of the Fugitive Economic Offenders Act of 2018?

There are so many criminals who have committed financial crimes of humongous amounts, leading the country's banks into debt. They also fled the country to avoid any type of punishment for committing a financial crime. Many of them also deny coming back to the country. The Fugitive Economic Offenders Act of 2018 was introduced to seize the properties of these financial criminals and to recuse the bank system.

Q3. Who has the authority to declare someone a fugitive economic offender under the Fugitive Economic Offenders Act?

The special court (designated under the PMLA, 2002) has the authority to declare someone a fugitive economic offender under the Fugitive Economic Offenders Act. The hearing process needs to be completed before announcing the name of the criminal.

Q4. Which people have already been declared fugitive economic offenders under the Fugitive Economic Offenders Act?

Numerous notorious personalities have been accused as fugitive economic offenders under the Fugitive Economic Offenders Act, including Lalit Modi, Nirob Modi, Vijaya Mallaya, Mehul Choksi, Rajiv Goyal, Alka Goyal, Asish Jobanputra, etc.