Round The World

New Delhi, 14 December 2018

Financial Fugitives

DIPLOMACY AT WORK

By Dr D.K. Giri

(Prof. International Politics, JMI)

Bringing back Christian Michel and securing the extradition of Vijay Malya are being exhibited by the ruling BJP as a big victory for Indian diplomacy. Christian Michel is the main accused in receiving and distributing the kickbacks from Augusta Westland Chopper deal, and Vijay Malya has charged with embezzling Rupees 9000 cr from Indian banks, and divesting a number of his employees of their salaries. There are others on the run, hiding in safer havens of foreign countries – Lalit Modi, Mehul Choksi, Nirav Modi. They have to be brought back too. One is not sure when. But the Government is claiming that a beginning has been made, the heads have begun to roll, and it is only the question of time, other fugitives are dragged back to the country to be tried for financial frauds.

Arguably, the Government machinery and the enforcement agencies have achieved tangible success in extradition of Michel and Malya. The claim is that the agencies’ efforts have come to fruition with support of its Foreign Ministry, and its diplomats at work. One need not grudge that credit to our diplomats as they have helped deliver Christian Michel and Vijay Malya, although the latter may exercise the appeal-options in British courts. It is question of a few more months. But, anyone having knowledge of operation of British system would understand that winning appeals with higher authorities is not easy in British system. Unlike India, Britain follows ‘the rule of law’, and the senior officers and senior judges go by the letter of law, not discretion. So Malya‘s extradition to India is a foregone issue, he should rather begin packing his bags.

It is in order that, in the light of the unprecedented success by our diplomats, we assess the intent and initiatives of our diplomats in finding the fugitives and chasing them back to our country, and putting them on trial for their lawless activities.

Obviously, the intent exists as may be seen from the latest move in the G-20 meeting earlier this month. The Indian Prime Minister managed to insert a nine-point action-plan to deal with fugitive financial offenders. This was done by invoking the UN provisions on economic offenders, like the UN Convention against Corruption (UNCAC), and UN Convention against Transnational Organised Crime (UNTOC).

Indeed, the nine-point programme needs elaboration as it aims at an international understanding, essential to nab the economic offenders, and obtain their extradition which is a complex international legal process. The nine points are: (1) Strong and active cooperation across G-20 countries to deal comprehensively and efficiently with the menace of fugitive economic offenders. This means co-operation in legal processes, aligning them, effectively implementing them, and actively helping the country that seeks extradition.

(2) Cooperation in the legal process such as effective freezing of the proceeds of crime, early return of the offenders and efficient repatriation of the proceeds of crime should be enhanced and streamlined. This stresses on the repatriation of the proceeds of the crime in addition to the extradition of the criminal. Many offenders deposit the loot abroad. It is no secret that tons of money is stashed away in Swiss banks by Indians.

(3) Joint effort by G-20 countries to form a mechanism that denies entry and safe havens to fugitive economic offenders. Without joint efforts, fugitives will roam around the world by exploiting legal loopholes in the host countries.

(4) Principles of UNCAC, UNOTC, especially related to the international cooperation should be fully and effectively implemented. There are many UN provisions that are observed more in non-compliance or slackness, than implementation. Hence, there is a need for effective implementation. India underlined this need.

(5) FATF (Financial Action Task Force) should be called upon to assign priority and focus to establishing international cooperation that leads to timely and comprehensive exchange between the competent authorities and FIUs – Financial Intelligence Unit. A signing priority by FATF is the priority suggested by India. Interestingly, New Delhi has set up a FATF cell in the Ministry of Revenue.

(6) FATF should be tasked to formulate a standard definition of fugitive economic offenders. This is important as there would be no agreement on legal cooperation without a common understanding of a fugitive offender.

(7) FATF should also develop a set of commonly agreed and standardised procedures related to identification, extradition and judicial proceedings for dealing with fugitive economic offenders to provide guidance and assistance to G-20 countries, subject to their domestic law. FATF must make the process uniform for others to follow and share.

(8) Common platform should be set up for sharing experience and best practices including successful cases of extradition, gaps in existing systems of extradition and legal assistance etc. A common platform is necessary for information and experience sharing which will help the process to be universal and transparent.

(9) G-20 Forum should consider initiating work on locating properties of economic offenders who have a tax debt in the country of their residence for its recovery. Unless a beginning is made in locating the properties and proceeds related to the crime, justice for the affected country will be delayed.

The above agenda was prompted by the heightened efforts by Indian diplomats to go after the economic offenders like Vijay Malya, Nirav Modi, Mehul Choksi and Lalit Modi etc. This agenda if agreed upon will help nail the fugitive like the diamantaire Mehul Choksi hiding in Antigua who is exploiting the gaps in Antigua and Barbuda Government’s extraditions laws. Mehul Choksi of Gitanjali Gems, in connivance with his nephew Nirav Modi, is accused of defrauding the Indian banks of 14000 crore.

India, and the Government of Antigua and Barbuda have no bilateral extradition treaty, but both New Delhi and St. ‘John’s (the capital city of Antigua) are of the view that since, both India, and Antigua and Barbuda are members of Commonwealth of Nations, the sections 3(2) and 7(2) of Antigua and Barbuda’s Extradition Act 1913 do provide a scope for extradition.  Article 3(2) says, “a person in Antigua and Barbuda who is accused of an extradition crime in a designated commonwealth country or who is alleged to be unlawfully at large may be arrested or returned to that country”; and Article 7(2) says “...following the purpose of section 3(2).... this Act shall have effect in relation to the return of persons to any designated commonwealth country”.

In view of these provisions, Indian diplomacy may have to go over-drive in getting Mehul Choksi back to the country. So should be Nirav Modi and Lalit Modi, or any other economic offender who has fled the country.

Undoubtedly, getting the extradition of the economic fugitives will be a huge act of recovering staggering amounts of money, and checking corruption that is eating into the vitals of our economic development. Corruption has been the biggest obstacle to development and justice delivery in developing countries including India. This lethal virus needs to be completely neutralised in the body-politics and economy of any country. The disease is of corruption - kick-backs, money laundering, bank-defrauding is demoralising and debilitating for a country, its mood and machinery. With international support, deliberate or circumstantial, prosecuting the offenders is becoming a harder. Therefore, the diplomacy has to be at its best and always at work.---INFA

(Copyright, India News & Feature Alliance)