EFFECT OF ANTI - CORRUPTION LEGISLATION, CRIMINAL ENFORCEMENT & ADMINISTRATIVE SANCTIONS ON EXPANDING EAST-WEST INVESTMENT Ravi NATH India Partner, RNClegal/Rajinder Narain & Co. April 20, 2013 CBIC Session 1 ANTI - CORRUPTION REGIME 1. Legislative framework 2. Administrative / Institutional framework 3. International Conventions / Regulations 4. Court precedents / Judge made law 2 RAVI.NATH@ RNCLEGAL.COM ANTI - CORRUPTION REGIME – Cont. 1. Legislative framework Corruption Act Money Laundering Act Right to Information Act Benami Transactions Prohibition Act 3 RAVI.NATH@ RNCLEGAL.COM ANTI - CORRUPTION REGIME – Cont. 1. Legislative framework (slide 3) 2. Administrative / Institutional framework The Central Vigilance Commission The Central Bureau of Investigation The Office of the Comptroller and Auditor General The Chief Information Commission E-governance 4 RAVI.NATH@ RNCLEGAL.COM ANTI - CORRUPTION REGIME – Cont. 1. Legislative framework (slide 3) 2. Administrative / Institutional framework (slide 4) 3. International Conventions / Regulations UN Convention against corruption - not ratified by Japan, Germany, Korea and others. Financial Action Task Force ADB’s anti-corruption action plan for Asia-Pacific 5 RAVI.NATH@ RNCLEGAL.COM ANTI - CORRUPTION REGIME – Cont. 1. Legislative framework (slide 3) 2. Administrative / Institutional framework (slide 4) 3. International Conventions / Regulations (slide 5) 4. Court precedents / Judge made law Cancellation of contract / withdrawal of tender Demand or solicitation is an offence Employment of decoys and spies / sting operations RAVI.NATH@ RNCLEGAL.COM 6 ADMINISTRATIVE SANCTIONS Object: to prevent frivolous prosecutions of public servants Without sanction, Court will not cognize offences of gratification, abetment, misconduct etc. (u/s 7, 10, 11, 13 and 15 of the Corruption Act) Sanction to be given: By competent authority for all Govt. employees except Group A Officers By Govt. itself for Group A Officers Within 3 months Courts not to direct Government to issue sanctions 7 RAVI.NATH@ RNCLEGAL.COM US AND UK LAWS; COMPARISON WITH; US : Foreign Corrupt Practices Act, 1977 UK : Bribery Act, 2010 8 RAVI.NATH@ RNCLEGAL.COM IS INDIA REALLY FIGHTING CORRUPTION? CORRUPTION IN INDIA – IS IT A ‘FACT OF LIFE’? IS INDIAN ENFORCEMENT REGIME EFFECTIVE? 9 RAVI.NATH@ RNCLEGAL.COM EXAMPLES OF RECENT SCAMS Bribery and abuse of power (Coalgate) Adarsh Housing Commonwealth games (US$ 13b) 10 RAVI.NATH@ RNCLEGAL.COM EXAMPLES OF RECENT SCAMS– Cont. 2G spectrum allocation (US$ 40 b) Kickbacks in defense Corporate fraud 11 RAVI.NATH@ RNCLEGAL.COM STEPS FOR IMPROVEMENT Strict law enforcement Procedure simplification: legal and administrative Electoral reforms Citizen empowerment Police reform 12 RAVI.NATH@ RNCLEGAL.COM STEPS FOR IMPROVEMENT – Cont. Removal / reduction in number of intermediaries Transparency and accountability in governance Corruption free governance a fundamental/human right Whistleblower policy 13 RAVI.NATH@ RNCLEGAL.COM Questions? Ravi NATH RNClegal / Rajinder Narain & Co. International Commercial & Corporate Lawyers T: + 91 11 4122 5000 C: + 91 98110 27193 E: ravi.nath@rnclegal.com www.rnclegal.com 14