Earlier this year, the Indian Parliament enacted the Prevention of Corruption Act (Amendment) Act 2018 (the Act) in July, effecting a raft of changes to the Prevention of Corruption Act 1988 (PCA). Those set out below are worthy of particular note for businesses operating in India.
- It is now an offence for any person to give or promise to give an “undue advantage” to a person intending to induce or reward a public servant to perform their “public duty” “improperly”. This carries a punishment of up to seven year prison term and / or a fine. Those “compelled” to give such an undue advantage are exempt from prosecution, provided they file a report with the authorities within seven days. Absent definitions within the PCA, it remains to be seen how kept terms and concepts such as “improperly”, “public duty” and “compelled” will be interpreted.
- Closely mimicking the UK Bribery Act (UKBA), the amendments include the creation of a strict liability offence for commercial organisations (incorporated in India or carrying on “a part of a business” in India) where an associated person gives or promises to give a public servant an undue advantage intending to obtain or retain for the commercial organisation: (a) business; or (b) an advantage in the conduct of business. In such circumstances, the commercial organisation concerned will be liable to pay a fine under section 9 of the PCA (as amended) unless it can rely on the defence that it has implemented “adequate procedures in compliance with such guidance as may be prescribed” to prevent associated persons from engaging in such conduct. One can expect that the guidance, once published, will resemble the substance of the “six principles” contained in the guidance published by the UK Ministry of Justice in March 2011.
- Drawing again from the UKBA, the Act introduces a new offence for any director, manager, secretary or other officer of a commercial organisation, where the commercial organisation commits an offence under section 9 of the PCA (see above) and such person is shown to have consented or connived in the commission of that offence. Such an offence is punishable with a prison term of up to seven years and / or a fine.
- Finally, the Act extends the Criminal Law Amendment Ordinance 1944 to the PCA to facilitate the forfeiture of property procured by persons through offences under the PCA.
Although this strengthening of the PCA has been welcomed in bringing India’s anti-corruption law more into line with the expectations of the UN Convention against Corruption, the Act has been the subject of some criticism. This is in part directed towards a new requirement contained in the Act which requires police officers to seek approval from the union or state government which employs a public servant (or employed a former public servant) before commencing an investigation against that public servant.
 For these purposes, a person is said to be “associated” with the commercial organisation if such person performs services for or on behalf of the commercial organisation.