Cabinet OKs bill to seize properties of fugitive offenders

In a multi-pronged approach to tackle economic crimes, the Union Cabinet on Thursday approved the Fugitive Economic Offenders Bill, 2018, to confiscate properties of those fleeing India or try to escape the reach of law.

It also approved the proposal for establishment of National Financial Reporting Authority (NFRA) to enhance audit standards of companies. NFRA will act as an independent regulator in the wake of increasing accounting scams.

The approval by the Cabinet will pave the way for the introduction of the bill in the resumed Budget session of Parliament from March 5.

The NFRA will be incorporated in the Companies Act to oversee listed companies and large unlisted public companies, the thresholds for which shall be provided in the new rules.

Once passed by Parliament, the fugitive act will apply to all cases where the value of offences is Rs 100 crore or more. It will allow the authorities to confiscate all the properties of a fugitive offender, including his or her benami properties.

Briefing reporters on the provisions of the new law, Finance Minister Arun Jaitley said the law will also have provision to confiscate assets and properties of the fugitive on foreign soil.

However, this will require international cooperation with the country concerned.
Under the new law, an accused person will not have any right to pursue a civil claim in the case.

The law will allow faster recovery of dues through a special court from such absconding offenders, jaitley said adding it will apply to new and old cases of persons who have fled the country to avoid prosecution.

The Budget for 2017-18 had announced the government's intention to bring such a law but the latest banking scam in PNB has hastened the process.

The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore, enhance investor and public confidence in financial disclosures of companies, Jaitley said.