Context:
Assets worth more than $12 billion had been attached since 2014 under the Prevention of Money Laundering Act (PMLA) and assets worth over $1.8 billion had been recovered under the Fugitive Economic Offenders Act (FEOA).
Fugitive Economic Offenders Act, 2018:
- It seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution or refuse to return to the country to face prosecution.
Fugitive Economic Offender (FEO) is a person against whom an arrest warrant has been issued for committing an offence listed in the Act and the value of the offence is at least ₹100 crore.
- Some of the offences listed – Counterfeiting government stamps or currency, Cheque dishonour, Money laundering, Transactions defrauding creditors etc.
- Declaration of FEO –
- A special court designated under the PMLA, 2002 may declare an individual as a fugitive economic offender.
- It may confiscate properties which are proceeds of crime, Benami properties and any other property, in India or abroad.
- All rights and titles of the property will vest in the central government, free from encumbrances (such as any charges on the property).
- Bar on Filing or Defending Civil Claims – The Act allows any civil court or tribunal to prohibit a declared fugitive economic offender from filing or defending any civil claim.
- Powers will be similar to those of a civil court.
Money laundering is concealing or disguising the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources. It is frequently a component of other, much more serious, crimes such as drug trafficking, robbery or extortion.
Prevention of Money Laundering Act (PMLA):
- Enacted in response to India’s global commitment (Vienna Convention) to combat the menace of money laundering.
- These include –
- United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988
- Basle Statement of Principles, 1989
- Forty Recommendations of the Financial Action Task Force on Money Laundering, 1990
- Political Declaration and Global Program of Action adopted by the United Nations General Assembly in 1990.
- Punishment –
- Rigorous imprisonment for a minimum of 3 years and a maximum of 7 years and Fine.
- If the crime involves the Narcotic Drugs and Psychotropic Substances Act, 1985, the punishment can go up to 10 years, along with fine.
- Regulating Authority – Enforcement Directorate (ED)
- Financial Intelligence Unit – India (FIU-IND) – Receives, processes, analyses and disseminates information related to suspect financial transactions.
What is Burden of proof?
A person, who is accused of having committed the offence of money laundering, has to prove that alleged proceeds of crime are in fact lawful property.
Source: The Hindu
Previous Year Question
Consider the following statements with reference to India:
1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the ‘medium enterprises’ are those with investments in plant and machinery between ₹15 crore and ₹25 crore.
2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2023 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (b)
