1. Offenses’ Legal Framework
1.1 International Agreements
The United Nations Convention Against Corruption and the United Nations Convention on Transnational Organized Crime, both of which make corruption and bribery of public officials illegal, have been ratified by India.
1.2 Legislation at the National Level
The Prevention of Corruption Act, 1988 is India’s major anti-corruption legislation (PCA). Certain articles of the Indian Penal Code, 1860 (IPC), deal with unlawful conduct committed by public officials. Government officials must also follow the service rules that apply to them, such as the Central Civil Services (Conduct) Rules, 1964 and the All India Services (Conduct) Rules, 1968 (Service Rules), which, among other things, prohibit them from accepting gifts or other monetary benefits in excess of a certain threshold without prior approval from the government.
1.3 National Legislation Interpretation and Enforcement Guidelines
The enforcement of Indian anti-bribery laws and regulations follows general principles of statutory interpretation for criminal statutes. The Code of Criminal Procedure (CrPC) and the rules followed by local law enforcement in each state are extensively used to enforce anti-corruption legislation. In addition, the Anti-Corruption Branch of the Central Bureau of Investigation (CBI) has its own set of procedures for investigating and prosecuting corruption-related offenses.
1.4 Key National Legislation Amendments in Recent Years
In 2018, the PCA was updated. Prior to the modification, the PCA’s prosecution and penalties were limited to public officials who took and accepted bribes. Companies that assisted or paid bribes to government officials may only be charged with conspiracy to commit a crime. Payment of a bribe to public authorities has now been designated as a separate offense, allowing for direct prosecution of bribe-givers. Furthermore, investigative authorities have been given greater authority to investigate and prosecute a firm, as well as its directors, managers, and other officers, who collaborated or conspired to conduct such crimes.
2. Constituent Elements and Classification
2.1 Bribery
There is no explicit definition of the term “bribe” in any legislation. However, Indian courts have understood it to include payments paid to public workers in order to have illicit things done and/or to have lawful things done quickly.
The following are the most common bribery offenses in India:
a public official receiving illegal gratification as a reward or motivation for performing or refraining from performing an official act, or for showing or refraining from showing any favor or disfavor to any person in the performance of their official functions; an individual receiving illegal gratification to influence a public servant to commit the aforementioned offence;
a governmental official receiving a valuable item from a person without payment in exchange for business ties with that person;
a public official misappropriating or converting for their own personal use any property entrusted to them or under their authority, or permitting another person to do so;
a public official getting a valuable item or monetary benefit for oneself or another person by corruption, abuse of power, authority, or other criminal means;
Being linked with a commercial organization that gives or offers to give an undue advantage to a public official; and giving or promising to offer another person any advantage with the intent to encourage a public official to perform a public duty illegally.
The public servant means:
any person in the government’s service or pay, or remunerated by the government for the performance of any public duty by fees or commission; any person in the service or pay of a local authority; any person who holds an office by virtue of which he or she is authorised or required to perform any public duty; any person who holds an office by virtue of which he or she is empowered to prepare, assemble, or distribute any public document.
In general, in order to prove an infraction under Indian law, intent is required. Only a few crimes, such as waging war against the government, do not require intent to be shown.
In the Service Rules, the government has established norms and monetary thresholds for accepting gifts, commercial courtesies, and hospitality from certain public officials. These rules must be observed by government employees who work in specific areas. Bribery of foreign officials and bribery of private parties are not expressly prohibited by Indian law.
Bribery can be committed simply by attempting or promising to bribe a public official, and there is no necessity that the bribe-expected giver’s consequences from the public official really occur for it to be considered an offence.
In India, failure to prohibit bribery has not been constituted a criminal offense. It’s worth noting that, according to recent revisions to the PCA, businesses can now claim that they have developed effective anti-bribery measures within their organization.
2.2 Peddling in Power
There are no particular laws in Indian law relating to influence peddling. As long as a person is using his or her influence to convince a government official to conduct an act prohibited under the PCA, influence-peddling may be prosecuted as a bribery offense under the PCA. The above-mentioned bribery offenses have been listed.
Foreign public officials’ influence peddling is not particularly prohibited under Indian law, but it can be prosecuted as a case of criminal breach of trust and deceit under the IPC.
2.3 Financial Record-Keeping
The Prevention of Money Laundering Act of 2002 (PMLA) and the Prevention of Money Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information, and Verification and Maintenance of Records of the Identity of Clients of Banking Companies, Financial Institutions, and Intermediars) Act of 2002 (PMLA) are two pieces of legislation that govern the prevention of money laundering. Banks, financial institutions, and intermediaries are required to keep and provide information on cash transactions exceeding INR1 million, cross-border wire transfers above INR 500,000, and a variety of other transactions. Failure to reveal those proper financial records that must be maintained according to the Act can result in a punishment of between INR 10,000 and INR 100,000 under the PMLA. Failure to preserve financial records with necessary and reasonable care is punishable by a fine ranging from INR 50,000 to INR 500,000 and/or imprisonment for up to one year under the Companies Act, 2013.
Furthermore, the Companies Act of 2013 compels businesses to keep records for a period of eight years that include full and genuine financial statements prepared in compliance with the central government’s accounting standards. Failure to keep a company’s books of account up to date as required by the Companies Act, 2013 can result in fines of up to INR 500,000 and a year in prison.
The Income Tax Act of 1961 additionally mandates that certain professionals keep books of accounts and other supporting papers for a period of six years after the assessment year has ended. Documents relating to transfer pricing must be kept for a total of 10 years.
2.4 Government Officials
Under the provisions of the PCA, public officials can be held liable for theft of public funds, unlawful taking of interest, embezzlement of public funds, and favoritism.
2.5 Service Providers
The PCA makes it clear that an undue benefit obtained or accepted by a public servant through an intermediary is considered the same as an unfair benefit obtained or accepted by the public servant directly.