AN ANALYSIS OF EFFORTS MADE BY INDIA TOWARDS PREVENTION OF FOREIGN BRIBERY

The decade-long effort to implement a law penalizing foreign bribery must be expedited for India to bring its enforcement mechanisms far more in line with its international trading partners

Following India's ratification of the United Nations Convention Against Corruption, 2003 ("UNCAC") on 9th May 2011,several attempts have been made by the Indian Government to implement domestic laws that bring the regulatory regime pertaining to anti-bribery in consonance with the mandates of the UNCAC. Prior to ratification, India's regulatory framework had not addressed several aspects that were required to be regulated by state parties to the UNCAC. Since 2011, however, the Indian Government has plugged these gaps by enacting various legislations such as the Prevention of Corruption (Amendment) Act, 2018 ("PoCA Amendment") and The Lokpal and Lokayuktas Act, 2013.

Despite these efforts, one primary issue that India has not addressed yet is the bribery of foreign public officials. Repeated attempts were made in the form of multiple bills that were introduced in the Lok Sabha (the lower house of India's bicameral Parliament) namely, the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2011 ("2011 Bill"), the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2015 ("2015 Bill"), and the currently pending Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2019 ("2019 Bill").

While the 2011 Bill lapsed due to the dissolution of the 15th Lok Sabha in 2014, the 2015 Bill was never introduced in the Lok Sabha despite the 20th Law Commission of India providing detailed views and recommendations on it. Recently, on February 4, 2022, a Member of Parliament introduced the 2019 Bill.

1. ANALYSIS OF THE 2019 BILL

Our review of the 2019 Bill highlights certain differences vis-à-vis the 20th Law Commission's criticisms of the 2015 Bill and the provisions of the 2019 Bill.

• Applicability: Aside from the standard provisions relating to applicability, the 2019 Bill also purports to apply to all persons on an aircraft or ship registered outside India but for the time being over India. Highlighting the difficulty in enforcing a similar provision in the 2015 Bill, the Law Commission also observed that such a provision would not be consistent with the principles of sovereignty envisaged under Article-4 of the UNCAC.

• Passive bribery of foreign public official: The 2019 Bill stipulates that any foreign public official who accepts a bribe shall be punishable with imprisonment and shall also be liable to fine. While Article 16 of UNCAC does address the offence of passive bribery of foreign public officials, it only encourages State parties to consider making it an offence. This is because the State in which the foreign public official is located would be better placed to initiate appropriate proceedings. Accordingly, the 2019 Bill would perhaps do well to re-consider the provision as not only would it seemingly interfere with the principles of sovereignty laid down in Article 4 of UNCAC but would also be practically cumbersome to enforce.

• Lack of exceptions: The 2019 Bill is conspicuously devoid of any exceptions or defenses to the offence of bribing a foreign public official. Universally recognized exceptions should be included in the 2019 Bill, such as reasonable and bona fide expenditures for travel and lodging expenses that are directly related to the promotion, demonstration, or explanation of products or services or the execution or performance of a contract. Additionally, a provision enabling persons to engage in accepted legal practices in the State in which the foreign public official is located should also be included.

• Lack of provisions relating to liability of commercial organizations: Surprisingly, while detailed provisions regarding liability of commercial organizations for bribery of domestic public officials were introduced through the POCA Amendment, the 2019 Bill does not address corresponding provisions for the bribery of foreign public officials. This is the most important consideration in introducing legislation pertaining to foreign bribery, as transnational bribery of foreign public officials is often committed by commercial organizations.

2. CONCLUSION

A bare perusal of the 2019 Bill will reveal that most of the recommendations made by the 20th Law Commission with respect to the 2015 Bill have not been included as yet. The most conspicuous absence is that of a provision pertaining to the liability of commercial organizations, a fact that was highlighted by anti-corruption watchdog Transparency International in its report 'Exposing Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention'¹.

The above coupled with the fact that there has been significant pressure on India to accede to the Organization for Economic Cooperation and Development's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997 ("OECD Convention"), as a major portion of foreign investments in India are made by its members, makes it very compelling for India to enact a domestic law penalizing foreign bribery.

The decade-long effort to implement a law penalizing foreign bribery must be expedited for India to bring its enforcement mechanisms far more in line with its international trading partners.

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.