India: Key Amendment To India's Anti-Corruption Legislation Has Significant Implications For Multinationals Doing Business In India

In late July 2018, India's parliament passed an amendment to the Prevention of Corruption Act 1988 (the "PCA"), India's principal legislation for combating bribery and corruption involving public officials. The Prevention of Corruption (Amendment) Act, 2018 (the "Amendment") introduces changes that have considerable significance for multinational corporations ("MNCs") doing business in India. In this summary, we discuss the Amendment's key provisions and impact on MNCs.

Targeting Bribe-Payers

Prior to the Amendment, the primary anti-bribery provisions of the PCA in Sections 7 and 11 dealt with the acceptance of bribes by public servants. Section 12 of the unamended PCA allowed for the prosecution of bribe-payers indirectly though the law's abetting provisions. However, Indian prosecutors used the abetting provisions sparingly against private individuals and entities.

The Amendment indicates a potential shift. The new PCA Section 8 establishes a separate offense for giving or offering an "undue advantage" to another person with the intention of inducing or rewarding a public servant1 to improperly perform a public function. Whether the public servant accepts the offer is of no consequence. The form of gratification is likewise immaterial; the law prohibits any gratification other than legal remuneration. If convicted under the Section 8, bribe-payers face potential fines and/or imprisonment of up to seven years.

The Amendment also places limits on the immunity previously afforded bribe-payers. The unamended PCA provided bribe-givers with immunity if they reported a public servant's having accepted a bribe or turned witness for the prosecution. The Amendment limits this protection to instances where the bribe-payer is "compelled" to provide the "undue advantage," or bribe, and requires reporting to law enforcement within seven days. However, the Amendment offers little in the way of clarity as to what is required to demonstrate that a bribe-payer was so "compelled."

Third Party Risk

Third party intermediaries are among MNCs' greatest corruption risks. Globally, the majority of prosecutions and regulatory settlements arise out of payments to agents, brokers, distributors, and other third parties.

The Amendment erases any doubt that individuals and companies can be liable under the PCA for bribes paid or offered by third parties on their behalf. In particular, the Amendment clarifies that whether a person gives or promises an undue advantage directly to a public servant or through a third party is "immaterial" under Section 8.

For MNCs doing business in India, the change highlights the continued importance of an anti-corruption compliance program that accounts for third parties, and of ensuring that local partners appreciate the risk that violations by intermediaries pose to your organization.

Liability for Commercial Organizations

The Amendment portends a potential increase in corporate prosecutions by creating a distinct offense for commercial organizations. Under the new Section 9, a commercial organization may be liable "if any person associated with the commercial organization gives or promises to give any undue advantage to a public servant" with an intent to obtain or retain business or any advantage on behalf of that commercial organization. Those "associated with" the commercial organization may include any person who "perform[s] services for or on behalf of the commercial organization." As a result, MNCs face potential liability for the actions not only of their employees in India, but of external agents, contractors, consultants, subsidiaries, and other intermediaries.

New Risks for Managers

Section 10 of the amended PCA imposes liability on directors, managers, and other officers of a commercial organization who consent to or conspire with an individual who commits a primary violation of the PCA. Managerial violations entail punishment of up to seven years in prison.

The additional oversight burden aligns with other legislative actions taken by the Indian government that make compliance the responsibility of management. The Indian Companies Act, 2013, requires directors of Indian companies to annually certify to the sufficiency and accuracy of accounting records in order to prevent fraud.

Policies & Procedures

The Amendment further underscores the importance of a sophisticated anti-corruption compliance program. In particular, the Amendment introduces an affirmative defense to Section 9 charges for commercial organizations that have in place "adequate procedures designed to prevent" violations of the PCA. As to the meaning of "adequate procedures," the Amendment is silent – for now. The Amendment contains a requirement that the Indian government prescribe the components of a compliance program designed to meet the new standards.


The Amendment places MNCs, their officers, and directors squarely within the crosshairs of the PCA. While the Amendment affords MNCs the opportunity to mitigate their potential exposure by adopting a robust anti-corruption compliance program, the dearth of PCA enforcement against private companies leaves significant ambiguity as to how Indian prosecutors will evaluate compliance programs. MNCs with direct operations, subsidiaries, and investments in India would be wise to ensure that their anti-corruption compliance programs adhere to global standards, such as those contemplated under the FCPA and UK Bribery Act.

We will continue to monitor further developments in this area. If you have any questions about this Alert, please contact your usual Ropes & Gray attorney.

Ropes & Gray attorneys are not practicing as Indian lawyers, and do not provide direct assistance with litigation matters in the courts of India nor appear before any government agencies or other regulatory bodies in India.


1 The definition of "Public Servant" under the PCA is expansive. The law includes individuals required to perform duties in which "the State, the public, or the community has an interest," which the Indian Supreme Court has ruled includes private bank officers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions