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AMCHAM ANTI CORRUPTION COMMITEE. Anand Dayal, Chairman New Delhi, 18 November 2009. MEETING AGENDA. Introduction Of Committee Members Anti Corruption Landscape In India Committee Goals Short Term Long Term Plan Of Action Logistics For Conducting Meeting.

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AMCHAM ANTI CORRUPTION COMMITEE

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Amcham anti corruption commitee

AMCHAM ANTI CORRUPTION COMMITEE

Anand Dayal, Chairman

New Delhi, 18 November 2009


Meeting agenda

MEETING AGENDA

  • Introduction Of Committee Members

  • Anti Corruption Landscape In India

  • Committee Goals

    • Short Term

    • Long Term

  • Plan Of Action

  • Logistics For Conducting Meeting


Anti corruption landscape in india

ANTI CORRUPTION LANDSCAPE IN INDIA

  • Nature and causes of corruption in India

  • Areas of risk for US companies

  • FCPA proceedings involving bribery in India

  • Trends in India

  • Anti-corruption laws

  • Investigation agencies dealing with corruption

  • Efforts to curb corruption

  • Dealing with extortionist government officials


Nature of corruption in india

NATURE OF CORRUPTION IN INDIA

  • Encountered by public in day to day dealings

  • Reported demands:

    • 50% (under $ 100)

    • 84% (under $ 5000)

  • General Mindset: bribe giver is victim

  • Motivation: avoid harm or disadvantage, rather than for gaining an advantage


Causes of corruption in india

CAUSES OF CORRUPTION IN INDIA

As identified by Santhanam Committee

  • Administrative delays

  • Excessive burden of regulatory functions on government

  • Government officials vested with personal discretion

  • Complex procedures in matters of importance to citizens


Causes contd

CAUSES contd…

As identified by Scholarly Literature

  • Political patronage. Corruption in the political leadership

  • Administrative labyrinth. Cumbersome and dilatory administrative procedures

  • Lack of punishment. Corruption cases handled in a casual and clumsy manner

  • Social environment. Corruption accepted in the social psyche and behavior


Areas of risk for u s companies

AREAS OF RISK FOR U S COMPANIES

  • Culture of acceptance of corruption

  • Excessive discretion in exercise of governmental authority

  • Pervasiveness of public sector in commerce

  • Compliance challenges due to legal and regulatory ambiguity and inconsistencies

  • Cash oriented economy


Amcham anti corruption commitee

FCPA PROCEEDINGS IN INDIA

  • Ten cases involving bribery in India

    • 4 by DOJ Fraud Section

    • 6 by the SEC

  • Many involve conduct of an Indian subsidiary

  • Highest monetary penalty, $ 10 million

  • Disgorgement of profits and interest

  • Imprisonment (5 yrs) sought in one case

8


Amcham anti corruption commitee

TRENDS IN INDIA

  • Transparency in government

  • Increased public awareness of rights

  • Emphasis on legal and regulatory compliance

  • Movement away from business model relying on undue influence

  • Increased use of technology in dealing with government (e-governance)

  • Contract focus vs. relationship focus in business

  • Implementation of global best practices

9


Anti corruption laws

ANTI CORRUPTION LAWS

  • Prevention of Corruption Act, 1988

    • Prohibits the taking of a bribe or other gratification by a “public servant”

    • “public servant” expansively defined

    • Central Vigilance Commission (CVC) charged with inquiring into and investigating offenses

    • Prosecution requires prior government approval

    • Imprisonment and monetary fines

  • State Lokayukta Acts and Rules


Amcham anti corruption commitee

INVESTIGATION AGENCIES

  • Central Vigilance Commission (CVC)

  • Central Vigilance Officer (CVO) at undertaking level

  • Central Bureau of Investigation (CBI)

  • Enforcement Directorate

11


Initiatives to curb corruption

INITIATIVES TO CURB CORRUPTION

  • Right to Information Act, 2005

  • Government Whistleblower Resolution

  • National e-Governance Plan, May 2006

  • Transparency Efforts in Public Procurement

    • Integrity pact between government department and each bidder

    • E-procurement, listed as initiatives under National e–Governance Plan

    • CVC guidelines Preventive Vigilance in Public Procurement

    • Defence Procurement Policy


Dealing with extortionist demand

DEALING WITH EXTORTIONIST DEMAND

  • Positive Deviance Approach

    • Have the courage to say NO and stand by it

    • Written policy not to engage in bribery

    • Strict compliance with legal and regulatory requirements

    • Make representation to higher authorities

    • Encourage and implement E-governance

    • Reward ethical behavior within government


Goals to achieve

GOALS TO ACHIEVE

Help US companies manage legal compliance challenges

Create a level playing field vis-à-vis local (domestic) companies & other foreign MNC’s


Thank you

THANK YOU

Anand S. Dayal

Koura & Co, Advocates


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