November 11, 2015
Compliance Champion Spotlight
What is a Compliance Champion? A Compliance Champion is an individual or organization committed to fostering and raising the standards of anti-bribery compliance. TRACE Trends will include posts featuring Compliance Champions from time to time.
We hope you enjoy the following entry from this week’s Compliance Champion, and TRACE Partner Law Firm!
Today’s guest blog post is written by Mr. Parul Nanabhai, Managing Partner at Ashok Pratap & Co. Barristers & Advocates, an Indian firm with over 30 years in cross-border transactions of multinational corporations. The firm specializes in advising and serving foreign companies and banks operating in India on all aspects of foreign investment, including wholly owned subsidiaries, joint ventures, licensing, technology transfers including governmental policies, procedures, and guidelines, legal and administrative regulations and provisions, tax aspects and implications, preparation of agreements, structure of corporate documentation for joint ventures, compliance with governmental requirements, and processing of applications with the government.
Although the law in India addresses bribery involving domestic officials, there currently is no law criminalizing bribery of foreign officials. India may be getting closer to passing such legislation, however.
On December 9, 2005, India signed the United Nations Convention Against Corruption (UNCAC). The UNCAC calls on signatories to criminalize various offenses, including bribery of foreign government officials, in an effort to reduce corruption around the globe. Under Article 16 of UNCAC, signatories are required to penalize offer and acceptance of an undue advantage by Foreign Public Officials (FPOs) and Officials of Public International Organizations (OPIOs). Pursuant thereto, India introduced local legislation, the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill (the “Bill”), initially in 2011 and just recently again in 2015.
Highlights of the Bill
The Bill applies to instances of bribery that occur wholly or partly within India or on an Indian aircraft or ship; or where the bribery takes place abroad, to persons who are citizens or permanent residents of India or bodies that are incorporated in India. The Bill would also enable the Indian Central Government to enter into agreements with foreign governments for enforcement purposes and for the exchange of information or investigation of cases relating to any offense under this law.
Under the Bill, acceptance or solicitation of bribes or gratification by FPOs or OPIOs for undue advantage other than lawful remuneration is a crime. On the supply side, offering or promising to offer bribes or gratification to FPOs or OPIOs in relation to conduct or to obtain international business is also an offense, as is abetting or attempting either of aforementioned acts.
Unless there is evidence that adequate procedures were in place to prevent such conduct, companies will be liable for bribery offenses committed by the company itself, a director, or a person associated with the company. Offenses are punishable with prison terms of 3 years up to 7 years and fines.
Defenses and Exceptions
Exceptions include reasonable and bona fide expenditures related to the promotion or demonstration of products or services. Other exceptions include payments that are permitted under laws of a foreign country. Facilitation payments, made to expedite or secure performance of any act of a routine nature that is part of the duties or functions of an FPO or OPIO, are also exempt.
For more on this topic, please see the following resources:
Law Commission Report 258
Press Information Bureau, Government of India Ministry of Law and Justice: Law Commission of India Submits its Report No. 258
Draft Bill on Bribery by Foreign Public Officials Entails Jail
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