Enforcement Directorate transfers assets of Fugitive Economic Offenders

Enforcement Directorate transfers assets of Fugitive Economic Offenders

Part of: GS Prelims and GS -III – Money Laundering 

In news

• The Enforcement Directorate has transferred assets worth Rs. 8,441.50 crore to public sector banks that suffered losses to the tune of Rs. 22,585.83 crore due to frauds committed allegedly by Vijay Mallya, Nirav Modi and Mehul Choksi.
• All the three have been declared ‘Fugitive Economic Offenders’ by PMLA (Prevention of Money Laundering Act) Court in Mumbai.

About 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) 
  • 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 Rs. 100 crore.
• Some of the offences listed in the act are:
  • Counterfeiting government stamps or currency.
  • Cheque dishonour.
  • Money laundering.
  • Transactions defrauding creditors.
• Upon confiscation, all rights and titles of the property will vest in the central government, free from encumbrances (such as any charges on the property).
• The central government may appoint an administrator to manage and dispose of these properties.

About Prevention of Money Laundering Act (PMLA)

• Money laundering is punishable with rigorous imprisonment for a minimum of 3 years and a maximum of 7 years and Fine.
• The property is believed to be “proceeds of crime” and can be provisionally attached for 180 days. 
• Such an order is required to be confirmed by an independent Adjudicating Authority
• The Enforcement Directorate (ED) is responsible for investigating offences under the PMLA

About Enforcement Directorate

• It is a specialized financial investigation agency. 
• It comes under the Department of Revenue, Ministry of Finance.
• ED enforces the following laws:
  • Foreign Exchange Management Act,1999 (FEMA)
  • Prevention of Money Laundering Act, 2002 (PMLA)

Do you know? 

• Money laundering is concealing or disguising the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources.