Fear of forfeiture

Fear of forfeiture


The proposed law to seize the wealth of economic offenders is a welcome measure.

Shortcomings of the Previous Laws

  • Legal provisions to confiscate the assets of offenders already exist, but these are regarded as somewhat inadequate.
  • From the provision in the Code of Criminal Procedure for attachment of the property of ‘proclaimed offenders’, to sections in Acts targeting smugglers, foreign exchange offenders and traffickers in narcotics, proceedings for forfeiture of property have been marked by shortcomings and procedural delays.
  • The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, have not exactly been a success.
  • Experience has shown that disposal of confiscated assets is not easy, especially at a price sufficient to recoup losses or pay off all creditors.
  • The Fugitive Economic Offenders Bill aims to make up for the shortcomings and provide a fresh legal framework that would enable the confiscation of the property of those evading prosecution by fleeing the country or remaining abroad.

About The Fugitive Economic Offenders Bill:

  • The Bill aims to stop economic offenders who leave the country to avoid due process. Offences involving amounts of ₹100 crore or more fall under the purview of this law.
  • 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
  • According to the draft Bill, a fugitive economic offender is “any individual against whom a warrant for arrest in relation to a schedule offence has been issued by any court of India who, either leaves or has left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution
  • Under the Fugitive Economic Offenders Bill, confiscation is not limited to the proceeds of crime, and extends to any asset owned by an offender, including benami property.
  • The government has justified not linking the forfeiture clause to criminal conviction by citing the principle enshrined in the UN Convention against Corruption

About UN Convention against Corruption:

  • The convention envisages domestic laws for confiscation of property without a criminal conviction in cases in which the offenders cannot be prosecuted for reasons of death, flight or absence.
  • India ratified it in 2011

Way ahead:

  • The utility and effectiveness of laws are best assessed in the implementation,
  • However, it is important to ensure they are fair and reasonable.
  • The shortcomings in previous laws must be avoided, and the new legal regime impartially enforced.
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