India passes amendments to 1988 Prevention of Corruption Act

On July 24, 2018 the Indian Parliament passed the Prevention of Corruption (Amendment) Bill 2018 (POCA).(1)  The POCA amends the 1988 Prevention of Corruption Act (PCA).  The POCA was necessary to align the existing law with the United Nations Convention against Corruption (UNCAC).(7)  A previous attempt to amend the PCA in 2013 failed.(2)  For the first time, the law now includes a bribery provision for commercial organizations.  

Background

The Criminal Law (Amendment) Ordinance, 1944(3) was the first law in India that dealt with corruption.  The Prevention of Corruption Act, 1947(4) was enacted to supplement the provisions of the Indian Penal Code of 1860.(5)  Eventually it was determined that the scope of the 1947 law was too narrow and as a result the PCA was enacted in 1988.(6)  The PCA replaced the 1947 Act, widened the scope of the definition of public servant and increased the potential penalty assessments.  An unsuccessful attempt was made in 2013 to amend the PCA in order to align it with the UNCAC(7), as a result of India's ratification of the UNCAC in May of 2011. 

Key Changes within the 2018 POCA   

The 2018 POCA amends various provisions of the 1988 PCA:

  • The giving of a bribe is now a direct offence - however, if you are compelled to give a bribe you will not be charged with the crime if you report it to the authorities within seven (7) days;
  • Includes provisions for both bribing a public servant and the offering of a bribe by a commercial organization (including commercial organizations is NEW);
  • Allows for the prosecution of former public officials - previously only currently serving public officials could be prosecuted;
  • Removes the provision that protected a person offering a bribe from prosecution based on statements they make during a corruption trial;
  • Provides more stringent punishments for bribery - for both the giver and taker (including up to seven years of imprisonment or a fine or both for the person offering a bribe); and
  • Redefines criminal misconduct to only cover misappropriation of property and possession of disproportionate assets.

Key New Text from the 2018 POCA

  • "8. (1) Any person who gives or promises to give an undue advantage to another person or persons, with intention - (i) to induce a public servant to perform improperly a public duty; or (ii) to reward such public servant for the improper performance of public duty; shall be punishable with imprisonment for a term which may extend to seven years or with a fine or with both..."
  • "9. (1) Where an offence under this Act has been committed by a commercial organisation, such organisation shall be punishable with fine, if any person associated with such commercial organisation gives or promises to give any undue advantage to a public servant intending - (a) to obtain or retain business for such commercial organisation; or (b) to obtain or retain an advantage in the conduct of business for such commercial organisation: Provided that it shall be a defence for the commercial organisation to prove that it had in place adequate procedures in compliance of such guidelines as may be prescribed to prevent persons associated with it from undertaking such conduct."
  • "Commercial organisation - means (i) a body which is incorporated in India and which carries on a business, whether in India or outside India; (ii) any other body which is incorporated outside India and which carries on a business, or part of a business, in any part of India; (iii) a partnership firm or any association of persons formed in India and which carries on a business whether in India or outside India; or (iv) any other partnership or association of persons which is formed outside India and which carries on a business, or part of a business, in any part of India..."
  • "(c) a person is said to be associated with the commercial organisation, if such person performs services for or on behalf of the commercial organisation irrespective of any promise to give or giving of any undue advantage which constitutes an offence..."

For more information Contact GCSG's anti-bribery and corruption professionals.

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Indian Customs makes key arrival and departure manifest changes

On May 11, 2018, India's Central Board of Indirect Taxes and Customs (CBIT) released a notification(1), that outlines new sea cargo manifest and transshipment regulations. 

The new requirements require shipping lines to comply with the timelines and requirements of the cargo manifestation for exports from India and imports arriving in India.  The changes include:

  • Delivery of an Arrival Manifest - all authorised sea carriers carrying imported goods, export goods, or coastal goods, are required to file an electronic (unless it's not possible to file electronically) arrival manifest with Indian Customs prior to the vessel's departure from the last port of call before arriving in India; and
  • Delivery of a Departure Manifest - all authorised sea carriers carrying imported goods, export goods, coastal goods or goods meant for foreign transit or foreign transshipment, are required to file an electronic (unless it's not possible to file electronically) departure manifest Indian Customs prior to the vessel's departure from the Indian port. 

The effective date of the new regulations was August 1, 2018. 

Definitions:

  • Arrival Manifest - means an integrated declaration required to be delivered by an authorised carrier on arrival of the vessel or train or truck carrying imported goods, export goods and coastal goods.(1)  
  • Authorised carrier - means an authorised sea carrier, authorised train operator, shipping line or custodian registered under regulation 3.(1)
  • Authorised sea carrier - means the master of the vessel carrying imported goods, export goods and coastal goods or his agent.(1)
  • Coastal goods transited through a designated foreign route - means (i) coastal goods transported between an Indian port on east coast and another Indian port on west coast or vice versa, by a vessel through the territorial waters of Sri Lanka, whether or not calling any port in Sri Lanka in between and without change of vessel; and (ii) coastal goods transported between an Indian port on east coast and a river port in India or vice versa, by a vessel through a route passing through the Bangladeshi waters and without change of vessel.(1)
  • Departure Manifest - means integrated declaration required to be delivered by an authorised carrier before departure of a vessel or train or truck for imported goods, export goods and coastal goods.(1)

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India joins the Australia Group

On January 19, 2018 the Indian Ministry of External Affairs announced that India has joined the Australia Group (AG).  The AG, in a consensus decision, admitted India as the 43rd participant.  

The Australia Group, established in 1985, is a voluntary and informal export control arrangement in which 42 countries, as well as the European Union, coordinate their national export controls.  The purpose is to limit the supply of chemicals and biological agents-as well as related equipment, technologies, and knowledge-to countries and entities that are suspected of pursuing chemical or biological weapons capabilities. 

GCSG's compliance experts closely follow dual-use developments.  Contact us at info@globalcompliancesg.com with any additional question's or for more information.

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