Are Facilitation Payments Legal in India

While the FCPA covers public bribery offences, the UK Corruption Act covers commercial bribery as well as bribery of officials and prohibits facilitation payments. In addition, the jurisdiction of the UK Corruption Act is extraterritorial and gives UK authorities the possibility to prosecute an act of corruption committed by UK nationals, businesses or residents, regardless of the location of the offence. In practice, companies often use intermediaries – consulting firms, or even accounting firms, and similar potentially legitimate agents – to make payments on their behalf. However, this is likely still likely to be considered illegal under U.S. law – the FCPA guide mentioned above reads in a relevant passage: Unlike the U.S. Foreign Bribery Practices Act (FCPA), the Overseas Bribery Practices Act (FCPA) explicitly prohibits and criminalizes facilitation payments. Receiving satisfaction, whether monetary or otherwise, is an undue advantage under the Elector Protection Act. Mere application, receipt or attempt to obtain an undue advantage is a criminal offence, whether the official who receives such an undue advantage has granted a resulting favour or the performance of the public service has been inappropriate or dishonest. “A facilitation payment is a type of corruption and should be considered as such. A common example is when a public servant receives money or goods to fulfill an existing duty (or to expedite execution). Relief payments were illegal before the Corruption Act came into force, and they are illegal under the Corruption Act, regardless of their size or frequency. “Courts generally refrain from interfering with and acting within the government agency unless it is proven that the authority acted arbitrarily, maliciously, without jurisdiction or in violation of judicial process or a person`s constitutional or legal rights.

A similar remedy is also available before the Supreme Court, although the Supreme Court is reluctant to deal with cases where there is an effective alternative remedy to the Supreme Courts. This is an erroneous position, because according to the PCA (Chapter III: Offences and Penalties), the offence of corruption is created as a criminal offence of corruption by the official. While the substantive text establishes the offence for an “official who accepts unlawful satisfaction other than legal remuneration for an official act” or “an official who receives valuables without regard for the person concerned in the context of a procedure or transaction carried out by such an official”, the briber falls within the scope of the act by aiding and abetting that offence (Article 12 – Penalty for complicity in offences under Article 7 or 11). Thus, the penalty for bribery is aligned with what an official convicted of accepting bribes would receive, namely a prison sentence of at least 6 months, which extends over five years and would also be liable to a fine. In view of the above, the compliance provisions of multinational organizations operating in India need to be carefully developed and adapted to the Indian legal framework, and specific legal advice should be sought in this regard. “The FCPA explicitly prohibits corrupt payments made through third parties or intermediaries. In particular, it includes payments made to “any person, knowing that all or part of that money or thing of value is offered, given or promised, directly or indirectly,” to a foreign official. Whistleblowers who make disclosures related to the private sector do not enjoy legal protection, although most companies provide protection to these whistleblowers through internal policies and programs. While it can be argued that the positive obligation to report a crime related to unlawful gratuity has been waived by Parliament, it would be difficult to argue that there is no moral obligation to report. Aside from defending a person who is forced to pay bribes if that person can avoid prosecution if they report it within seven days, the PCA does not contain any provision on reporting violations under the PCPA.

On the other hand, India has concluded mutual legal assistance agreements in criminal matters with 34 countries, is a member of Interpol, has extradition treaties with 37 countries and extradition agreements with 8 countries. In view of the increasing cooperation between investigating authorities and law enforcement authorities, it should therefore be noted that the Indian legal framework is provisionally empowered to offer assistance when needed. The 2018 amendment brings Indian law into line with international practice, including the US Foreign Corrupt Practices Act (“FCPA”) and the United Kingdom Bribery Act (“UKBA”).

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