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AMCHAM ANTI CORRUPTION COMMITEE

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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  1. AMCHAM ANTI CORRUPTION COMMITEE Anand Dayal, Chairman New Delhi, 18 November 2009

  2. MEETING AGENDA • Introduction Of Committee Members • Anti Corruption Landscape In India • Committee Goals • Short Term • Long Term • Plan Of Action • Logistics For Conducting Meeting

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. INVESTIGATION AGENCIES • Central Vigilance Commission (CVC) • Central Vigilance Officer (CVO) at undertaking level • Central Bureau of Investigation (CBI) • Enforcement Directorate 11

  12. 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

  13. 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

  14. 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

  15. THANK YOU Anand S. Dayal Koura & Co, Advocates

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