Comparative Analysis of Anti-Corruption Laws in India, UK and USA

 In this article, the author will talk about the legislative framework of Anti-Corruption laws in three countries i.e., India, the United Kingdom, and the United States of America. The article will provide a comparative analysis of the laws in these three jurisdictions. In the first section of the article, the author will discuss extensively the legislative framework in India to combat corruption and later sections will provide a comparative analysis with the laws present in the United States and the United Kingdom.

The legislative framework in India

India had a federal system of government where the government at each level plays a pivotal role in performing various sovereign functions. The government has enacted several legislations in order to track and prevent corruption.

1. Prevention of Corruption Act, 1988

The primary legislation being the Prevention of Corruption Act, 1988.[3]The Act, inter alia, criminalises taking/giving of any “undue advantage” to perform a public duty dishonestly. The term “Undue Advantage” has been provided with a wider meaning under the Act. It is not restricted to any “pecuniary gratifications” rather it includes any form of gratification other than “legal remuneration” which is permitted by the government or any organisation in which he/she serves.[4]

Further, the term “Public Servant” is provided with a wider definition. It includes any “person in the service or pay of the government”, or a “local authority”. It further includes any “judge”, “arbitrator” or “any person performing a public duty”.[5] In the case of CBI v. Ramesh Gelli, the Apex Court opined that even “private banks” perform a “public duty” so as to fall under the definition of “public servant”[6]. Similarly, a Member of Parliament also attracts the definition of a “public servant” under the act.[7] While construing the definition of “public servant” Apex Court in the case of Govt. of A.P. v. P. Venku Reddy further opined that the court needs to adopt a “purposive approach” to give effect to the “intention of the legislature.”[8]

The offences under the Act covers broadly six heads firstly, any attempt or acceptance or making available any “undue advantage” with an intention to perform the public duty dishonestly[9]. Secondly, influencing a public servant through the exercise of any “personal influence”[10], Thirdly, bribing a “public servant” by a “commercial organisation” by inducing either through “obtaining a business” or “retaining an advantage” in the conduct of business.[11] Fourthly, any public servant obtaining undue advantage (with or without consideration) from the person concerned in “proceeding” or “business transaction” by such public servant or his supervisor.[12] Fifthly, whoever “abets any offence” punishable under the act[13] or who is a frequent offender of the offence mentioned under the act.[14] Lastly, any criminal misconduct which includes any “dishonest” or “fraudulent conversion” or “misappropriation” of the property provided to him as a public servant, or any “illegitimate enrichment” during the period in office.[15]

The Central Board of Investigation or anti-corruption branches of the state police, investigate the cases under the Act. Trial for these offences is dealt before the “special courts” by the “special judges” appointed by the “Central or State government” by notification in the Official Gazette.[16] Before the initiation of proceeding against the public servants under the Act, there is a prior requirement of a sanction of the government.[17] However, the same does not apply in case of proceeding against the private person accused of giving bribe. Further, punishment under the Act includes imprisonment which ranges from “six months to 10 years” (with/without fine).[18]

2. Foreign Contribution Regulation Act, 2010

The Act prohibits the “acceptance” and “utilisation” of “foreign contribution” or “foreign hospitality” for any activities that are detrimental to the national interest. The Act allows the use of such contribution and hospitality only after permission from the central government.[19] The Act includes “judges”, “government servants”, any “Member of Legislature” or “office bearers of a political party” or “employee of any organisation” “owned” or “controlled by the government”.[20]

Further, the term “Foreign Contribution” is provided with wider connotation under the Act. It includes any “donation”, “delivery” or “transfer” made by any foreign source of any article, currency or any security.[21] Similarly, “foreign source” is given a wider meaning. It includes the government of any “foreign country” or an “international agency” or “citizens of a foreign country” or “a foreign trust or foundation.”[22] The Act not only prohibits any illegitimate acceptance of foreign contribution but also put a restriction on receiving any foreign hospitality while visiting a foreign nation. Violation of these regulations is punishable with “imprisonment of up to five years” or “fine or both.”[23]

3. Others

Apart from various legislations such as Lokpal and Lokayuktas Act, 2013 (creates an independent ombudsman at both the central and state level to investigate the cases of corruption by public servant)[24], Central Vigilance Commission Act, 2003 (the act provides constitution to inquire or to cause inquires for the offence alleged to have been committed under the Prevention of Corruption Act, 1988)[25], Whistle-Blowers Protection Act, 2011 (setup a mechanism to receive complaints relating to the disclosure of corruption or misuse of power against any public servant),[26] there are various service rules for the public servants to reduce corruption.

There are Civil Service (Conduct) Rules[27], All India Service (Conduct) Rules[28] and many others, that restrict the public official to receive any undue advantage be it in the form of gifts, trade, business or any other pecuniary benefits. Further, under section 168 of Indian Penal Code, 1860 it is an offence for the “public servant” to engage in any “business”, “trade”, “profession” or “occupation”.[29] Therefore, under the provision of Indian Penal Code public servant could be held criminally liable for engaging in such commercial activities. These rules, regulations, legislations and provisions lay down the legislative framework to eliminate corruption within the nation. The following part of the article will deal with a legislative framework in the UK and USA to tackle corruption in their respective nation.   

Comparative Analysis of Anti- Corruption Laws in India with the U.K. and U.S.A.

The primary legislation in the United Kingdom to combat corruption is the Bribery Act, 2010.[30] The Act defines bribery as any “financial or other advantage” in the form of an “offer” or a “promise” in exchange for “improperly” performing a “relevant function or activity”.[31] The term “relevant function or activity” is defined in the act. It includes “any function of a public nature, any activity connected with a business or performed in the course of a person's employment or on behalf of a body of persons whether corporate or unincorporated”.[32]

Section 4 of the act defines “improper performance” as any activity which is performed in “breach of a relevant expectation” which is expected from a person in a “position of trust”.[33] Section 5 of the Act sets the standard of “relevant expectation” to be of a “reasonable person” of the United Kingdom in his position.[34] If the breach has occurred outside the U.K., the “local custom” or “practice” would be disregarded unless it is provided as a “written law” in the jurisdiction of that “country” or “territory”.

The Act further includes the provisions for the bribery of a Foreign Public officials in which a person could be held guilty if he “promise, offer, or give a financial or other advantage to a foreign public official”.[35] Similarly, the Act also punishes the commercial organisation, if the organisation fails to prevent bribery by a person associated with it.[36] The penalty under the Act is imprisonment for a term not exceeding ten years, or a fine, or both.[37]

On similar lines, there are legislations in the United States of America to combat corruption. The primary legislation in the country being the Foreign Corrupt Practices Act, 1977.[38]  The law targets “public corruption” and fraud at “international market place”. The Act is applied to three categories of persons. Firstly, “Issuers” (“Any domestic or foreign entity that issues securities to SEC”), Secondly, “Domestic concerns” (“US citizens, US resident aliens, corporations organized under US state laws and their officers”) and thirdly, the “Other Persons” (“Any person acting in the US territory”).[39] The laws of both US, UK and India provides for a robust legislative framework to prevent and reduce corruption. However, there exist certain differences in each of these laws which would be dealt with and discussed in this section of the article.

These legislations differ broadly on certain issues, firstly, on the requirement of intent. The Prevention of Corruption Act (PCA), of India, provides that the requirement of the “gratification” offered would be considered as a “motive” or “reward” for “performance or non-performance” of an official act. Therefore, the motive will be presumed upon the proof of receiving or offering gratification to the defendant. Whereas, the Foreign Corrupt Practices Act (FCPA) requires the accused to act “wilfully”, “knowingly” and “corruptly”. “Knowledge” under the act includes “conscious disregard” or “wilful blindness”. The Bribery Act of the UK on the other hand requires “basic knowledge” and the “intent” to prosecute the defendant for his “improper performance” under the act.

Secondly, failure to keep accurate books and records can be held as an offence. The FCPA requires the “public companies” and other “issuers” to file “periodic reports” with the SEC and “maintain accurate books and records” failure of which would be an offence under the Act. However, PCA does not make the failure to keep records an offence. Similarly, there is no specific provision to make it an offence in Bribery Act of UK, however, failure to keep record could be considered as a failure to have “adequate procedures” in place under the Act.

Thirdly, on the defence of having robust corporate compliance. Under the Bribery Act of UK, a company can be exempted if it can show that it had “adequate procedures to promote compliance”. Whereas, in FCPA and PCA, having such compliance would not exempt him/her from liability. However, such compliance may result in reduced fine under the Federal Sentencing Guidelines.

Fourthly, on the defence of the presence of local law. There is no such defence under the PCA. However, FCPA and UK Bribery Act provides the presence of local law as an exception. Under the Bribery Act and FCPA, a foreign official would be exempted if there are local “written laws” that provides for such provision of taking gratification.

Lastly, the legislatures differ on the potential penalties as well. The PCA provides for a punishment which ranges from 6 months to 7 years for most of the offence. However, for a “habitual or a particularly corrupt or dishonest misconduct”, punishment may shoot up to ten years, with a fine in both cases. The UK Bribery Act provides for punishment for up to ten years with unlimited fines for individuals and companies. Under FCPA, for the corporation a fine may range up to 2 million dollars or twice the “bribery paid” or “benefit received” (whichever is greater), for individuals, a fine up to two hundred fifty-thousand dollars or twice the bribe paid or benefit received through the act. The Act further penalises with five-year of imprisonment per violation.   

Conclusion

Corruption is a worldwide problem that has the potential to swallow economic growth, hamper investments, diminish social services, and even threaten human security. There are regulations, laws and guidelines in place to reduce and prevent corruption. The article was in line to provide an analysis of various Anti-corruption laws in India and further analyse them with the laws present in USA and UK. The laws present in the United States and the United Kingdom provides for a robust framework to check and reduce corruption. Provisions like record keeping and emphasis on private and commercial bribery require more attention under the Indian Laws. The guidance from the laws in these two jurisdictions would help in making a robust framework to reduce and prevent corruption and further facilitate in future development.

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