India has urged the G20 to take multilateral action to expedite the extradition of fugitive economic offenders (FEOs) and the recovery of assets both at home and abroad.
What are Fugitive Economic Offenders?
- Individuals who have fled their home country to avoid prosecution for financial crimes such as money laundering, fraud, and embezzlement are known as FEOs.
- These individuals typically engage in illegal activities involving large sums of money, causing significant harm to the economy of the country from which they have fled.
FEOs and India
- In this regard, India has enacted specialised legislation in the form of the Fugitive Economic Offenders Act, 2018.
- It defines the term- as an individual against whom a warrant of arrest in relation to a scheduled offence has been issued by any court in India and who has left the country so as to avoid criminal prosecution; or the FEO abroad, refuses to return to face criminal prosecution”.
What causes offenders to flee?
- FEOs seek refuge in countries that do not have an extradition treaty with their home country or have weak extradition laws.
- Evading justice: FEOs frequently use legal loopholes and differences in laws and regulations across countries to avoid prosecution.
- Asset offshoring: They may transfer assets to offshore accounts or invest in assets that are difficult to seize, such as real estate and art.
How do FEOs affect the economy?
- FEOs can have a significant economic impact on the country from which they fled.
- Loan defaults: They may default on loans, commit fraud, and steal large sums of money from banks and financial institutions.
- The NPA crisis can result in an increase in non-performing assets (NPAs), a slowing of economic growth, and a loss of investor confidence.
International mechanisms for FEOs
Some of the most important international mechanisms for FEOs are:
- Extradition treaties: Many countries have extradition treaties with other countries, which allow them to request the extradition of people who have fled to other countries to avoid prosecution.
- Mutual Legal Assistance Treaties (MLATs): MLATs are international agreements that allow countries to exchange information and evidence in criminal investigations and proceedings.
- International Conventions and Agreements: Several international conventions and agreements address financial crimes and establish a framework for international cooperation. For example, the UN Convention Against Corruption, the FATF, and others.
- INTERPOL: Interpol facilitates and coordinates cross-border police cooperation. It keeps a database of wanted people, including FEOs, and collaborates with member countries to find and apprehend them.
- Asset recovery mechanisms are intended to allow countries to recover assets through asset seizure and repatriation, as well as asset freezing to prevent FEOs from accessing them.
Way forward
- Domestic law reform: India can improve its domestic laws and regulations to make it easier to prosecute FEOs and recover their assets.
- Developing extradition treaties: India can work with other countries to develop and strengthen extradition treaties to ensure that FEOs cannot evade justice by fleeing to other countries.
- Increasing international cooperation: India can strengthen its ties with other countries and international organisations to facilitate the exchange of information and intelligence about FEOs.
- Seizing and repatriating assets: India can work to seize and repatriate assets obtained by FEOs through illegal means.
- Improving transparency and accountability: To prevent FEOs from exploiting loopholes and engaging in illegal activities, India can improve transparency and accountability in its financial system.
Source: https://www.thehindu.com/news/national/india-calls-upon-g-20-countries-for-faster-extradition-of-fugitive-economic-offenders/article66567960.ece