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Lok Sabha passes Fugitive Economic Offenders Bill, 2018

Lok Sabha has passed Fugitive Economic Offenders Bill, 2018 that aims to curb practice of evading criminal prosecution by economic offenders fleeing from country to evade clutches Indian law by remaining outside jurisdiction of Indian courts.. The bill will replace an ordinance promulgated by President in April 2018.

Key Features of Bill

Fugitive economic offender (FEO): It has been defined as person against whom an arrest warrant has been issued for committing an offence listed in schedule (enlisted in the this law) by any court in India, but he leaves or has left India to avoid criminal prosecution or  refuses to return to India to face criminal prosecution. It is applicable in cases where total value involved in such economic offences is Rs.100 crore or more.

Special Court: It establishes Special Court under the Prevention of Money-laundering Act (PMLA), 2002 to declare a person as FEO. The court will appoint ‘administrator’ to oversee confiscated property. It will be responsible for disposing of confiscated property and t property will be used to satisfy creditors’ claims.

Attachment of property: It empowers director or deputy director (appointed under Prevention of Money-Laundering Act, 2002) to attach any property mentioned in application with permission of special court. These properties can be attached provisionally without the prior permission of the special court for 30 days. The attachment will continue for 180 days, unless it is extended by special court. If at the conclusion of proceedings, person is not found to be FEO, his properties will be released.

Bar on filing or defending civil claims: The bill allows any civil court or tribunal to disallow person declared FEO, from filing or defending any civil claim. Further, any company or limited liability partnership where FEO is majority shareholder, then promoter, or a key managerial person (such as MD or CEO) will also be barred from filing or defending civil claims.

Powers of director: The director or deputy director will have powers vested of civil court. These powers include entering a place on the belief that individual is FEO and directing searching of building or seizing documents.

Appeal: Under this law, appeals against orders of special court will lie before High Court.

Background

There have been several instances of economic offenders (eg Vijay Mallya and Nirav Modi) fleeing country to evade clutches Indian law to remain outside jurisdiction of Indian courts. The absence of such offenders from Indian courts has several deleterious consequences. It hampers investigation in criminal cases, wastes precious time of courts of law, undermines rule of law in India.

Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening financial health of banking sector. Moreover, existing non-coherent civil and criminal provisions in law are not entirely adequate to deal with severity of problem. This bill will provide effective, expeditious and constitutionally permissible deterrent legal teeth to enforcing agencies to ensure that such actions of FEO are curbed.

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Economic Partnership Agreement: EU, Japan sign massive free trade deal

European Union (EU) and Japan have signed Economic Partnership Agreement (EPA). It was signed at EU-Japan summit in Tokyo by EU Presidents Jean-Claude Juncker and Donald Tusk and Japanese Prime Minister Shinzo Abe. It is biggest ever trade deal negotiated by the EU and creates free trade zone covering nearly third of the world’s GDP.

Key Parts of EPA

Agricultural exports: It scraps Japanese duties on many cheeses such as Gouda and Cheddar as well as on wine exports. It allows EU to increase its beef exports to Japan and duty-free trade in pork, processed meat and almost duty-free trade for fresh meat. It ensures protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and protection of selection of Japanese GIs in EU.

Services markets: EPA opens up services markets, in particular financial services, e-commerce, telecommunications and transport.

Procurement markets: It guarantees EU companies access to large procurement markets of 48 large Japanese cities and removes obstacles to procurement in economically important railway sector at national level.

Automotive sector: It addresses specific sensitivities of EU in this sector and elimination of customs duties in transition periods of up to 7 years.

Trade and sustainable development: EPA includes comprehensive chapter on it. It sets very high standards of labour, safety, environmental and consumer protection. It strengthens EU and Japan’s commitments on sustainable development and climate change and fully safeguards public services.

Data protection: The negotiations completed by both sides on this matter will complement EPA. Both sides recognise each other’s data protection systems as equivalent, allowing data to flow safely between EU and Japan and creating world’s largest area of safe data flows.

Significance

EPA removes vast majority of €1 billion of duties paid annually by EU companies exporting to Japan and number of long-standing regulatory barriers, for example on cars. It opens up Japanese market of 127 million consumers to key EU agricultural exports and will increase EU export opportunities in range of other sectors. In addition, it will strengthen cooperation between Europe and Japan in range of areas, reaffirm their shared commitment to sustainable development. It also includes for the first time a specific commitment to the Paris climate agreement.

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