Lok Sabha Question No. 412 (STARRED), answered on 2019-07-22
Subject: Fugitive Economic Offenders
Ministry: FINANCE
Asked by: Gajanan Chandrakant Kirtikar, Sudheer Gupta

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA STARRED QUESTION NO. *412

TO BE ANSWERED ON MONDAY, JULY 22, 2019/ASHADHA 31, 1941 (SAKA)

## FUGITIVE ECONOMIC OFFENDERS

## QUESTION

## *412 SHRI GAJANAN CHANDRAKANT KIRTIKAR AND SHRI SUDHEER GUPTA:

## Will the Minister of FINANCE be pleased to state:

- (a)  whether India has called for a combined strategy crackdown on fugitive economic offenders to deny safe haven to such individuals in a joint statement in G-20 Meet;
- (b) if so, the details thereof and the response of the other Members of G-20 countries in this regard;
- (c)  whether as per Swiss National Bank recent data, black money stashed by Indians and  enterprises  in  Swiss  Banks  including  through  India-based  branches  fell  by  6 percent in 2018 to hit its second lowest level in more than two decades;
- (d) if so, the details thereof along with the steps taken by the Government in this regard so far;
- (e) whether the Government has pitched for co-operation among different countries of the  world  to  fight  corruption  and  ensure  a  corruption  free  world  and  if  so,  the  details thereof; and
- (f) the other steps taken by the Government to crack down on black money and bring back the fugitive economic offenders to the country?

## ANSWER

## MINISTER OF FINANCE (SMT. NIRMALA SITHARAMAN)

- (a) to (f): A statement is placed on the table of the House.

Statement placed on the Table of Lok Sabha in reply to parts (a) to (f) of the Lok Sabha Starred Question No.*412 (Position No. 12) to be answered on Monday, the 22 nd  July, 2019 regarding FUGITIVE ECONOMIC OFFENDERS, by SHRI GAJANAN KIRTIKAR, Member of Parliament and SHRI SUDHEER GUPTA, Member of Parliament.

## (a) & (b):

During  the  G20  Argentine  Presidency  (2018),  India  proposed  consideration  of matters concerning dealing with Fugitive Economic Offenders by the G20  and take a coordinated approach to address this serious issue. As a result of India's strong stand and persuasion in communique negotiation before and during the Buenos Aires Summit held on 30 th  November- 1 st  December 2018, G20 members agreed on the subject and the  Leaders  mandated  G20  members  to  explore  the  links  between  corruption  and economic crime. During this Summit, India also presented a 9-point agenda on action against  Fugitive  Economic  Offenders  which  proposed  strong  and  active  cooperation among  the  G20  member  countries  to  deal  comprehensively  and  efficiently  with  the menace of such offenders. The G20 Japanese Presidency has tasked the Organisation for  Economic  Co-operation  and  Development  (OECD)  to  do  the  scoping  of  issues connected with corruption, stolen property and return of such persons, including issues connected with economic offenders. Further, during the 14 th  G20 Summit held at Osaka, Japan on 28 th  -29 th  June 2019, G20 Leaders agreed to continue practical cooperation to fight corruption and reaffirmed their commitment to deny safe haven to persons sought for  corruption  and  their  proceeds  of  corruption  consistent  with  G20  and  international commitments and domestic legal systems.

## (c) & (d):

There  is no  authentic estimate  of  black  money  stashed  by  Indians  and enterprises in Swiss banks. Some recent media reports, however, say that deposits by Indians  in  Swiss  banks,  including  through  India-based  branches,  have  reduced  by nearly 6 per cent in 2018.

Government  is  taking  persistent  measures  to  detect  and  tax  the  unaccounted income and assets of Indians in Switzerland. Some of the steps taken are: (i) Double Taxation Avoidance Agreement which provides for exchange of information relevant to the administration or enforcement of the domestic laws between the two countries; (ii) Automatic  Exchange  of  Financial  Account  Information under  which  India  will receive the information of financial accounts held by Indian residents in Switzerland for 2018  and  subsequent  years,  on  an  automatic  basis  beginning  September,  2019.

Additionally,  to  enhance  cooperation  between  the  two  countries  in  this  area,  bilateral meetings are held between the Competent Authorities of the two sides on regular basis.

## (e) :

India has called for co-operation among different countries to fight corruption at various  international  fora  such  as  G20  and  BRICS.  The  G20  Leaders'  Declaration adopted  on  conclusion  of  the  G20  Summit  in  Osaka  calls  for  commitment  to  play  a leading role in  the global efforts  to  prevent and  fight  against  corruption.  Leaders  also agreed  to  renew  commitment  to  pursue  high  level  international  cooperation  between G20 members in the fight against corruption.

In  the  Joint  Statement  on  BRICS  Leaders'  Informal  Meeting on  the  margins  of G20 Summit, BRICS members agreed to promote international anticorruption cooperation  and  strengthening  of  legal  frameworks.  The  leaders  of  BRICS  nations committed to fighting corruption and continue to foster integrity in the public and private sectors.

## (f) :

The Government has taken several concrete steps to crack down on black money in and outside  the  country by  introducing  stringent  laws.  Recent  major  initiatives  in  this regard, include -

- i. Enactment of 'The Black Money (Undisclosed Foreign Income and Assets) and Imposition  of  Tax  Act,  2015'  which  has  come  into  force  w.e.f.  01.07.2015  to specifically and more effectively deal with the issue of black money stashed away abroad.
- ii. Enactment  of  the  Benami  Transactions  (Prohibition)  Amendment  Act,  2016  to amend the Benami Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable  confiscation  of  benami  property  and  prosecution  of  benamidar  and  the beneficial owner.
- iii.   The Government has brought in a large number of legislative provisions in the Income  Tax  Act,  1961  to  effectively  tackle  the  menace  of  black  money,  e.g. restriction on cash transaction of Rs. 2 lakh or more, no deduction under section 80G  allowed  if  cash  donation  exceeds  Rs.  2000,  and  restriction  imposed  on donations of Rs.2000/- or more to political parties otherwise than through a bank account or electoral bonds were imposed.
- iv.  Constitution  of  the  Special  Investigation  Team  (SIT)  on  Black  Money  under Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme Court.
- v. Proactively  engaging  with  foreign  governments  with  a  view  to  facilitate  and enhance the exchange of information under Double Taxation Avoidance

Agreements (DTAAs)/Tax Information Exchange Agreements (TIEAs)/Multilateral Conventions,

- vi.  Effective  enforcement  actions  including  expeditious  investigation  in foreign assets cases. Such actions include searches, surveys, enquiries, assessments of income,  levy  of  taxes,  penalties,  etc.  and  filing  of  prosecution  complaints  in criminal courts, wherever applicable,
- vii. Extensive use of information technology and data analytics tools for identification of  high-risk cases, expeditious e-verification of suspect cases and enforcement actions in appropriate cases
- viii.  Mandatory linking of Aadhar with PAN, which will not only help in de-duplication of PAN but will also prevent potential tax frauds and money- laundering.

In order to lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, the Fugitive Economic Offenders Act, 2018 was passed by the Parliament which makes provisions for a Court ('Special  Court'  under  the  Prevention  of  Money-laundering  Act,  2002)  to  declare  a person  as  a  Fugitive  Economic  Offender.  It  follows  the  non-conviction-based  asset confiscation  for  corruption-related  cases  as  per  the  provisions  of  United  Nations Convention  against  Corruption  (ratified  by  India  in  2011).  The  FEO  Act,  inter-alia, provides  for  expeditious  confiscation  of  proceeds  of  crime  and  properties  or  benami property owned by a fugitive economic offender in India or abroad with a view to make him submit to the jurisdiction of Courts in India.

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