The U.S. Foreign Corrupt Practices Act of 1977 ("FCPA") presents significant liability, risks, and compliance challenges for U.S. firms pursuing business opportunities in India.
U.S.
regulators have brought numerous FCPA enforcement actions based on
business activities in India, including actions against companies
such as Oracle, Tyco International, Dow Chemical Company, Pride
International, Textron, and Diageo.
In general, the FCPA makes it a federal crime to promise, offer, or make a bribe, directly or indirectly, to a foreign official to retain business or to secure an improper business advantage. The FCPA also requires companies that are traded on a U.S. stock exchange to maintain accurate books and records and to use an adequate system of internal financial and accounting controls.
Likewise, India's growing commitment to anti-corruption efforts has resulted in an increase in enforcement actions by Indian authorities. India's principal anti-corruption legislation is the Prevention of Corruption Act, 1988 (PCA), which criminalizes the bribery of public servants. The PCA operates in conjunction with numerous other anti-corruption regulations and rules applicable to corporate entities operating in India, including but not limited to the various Conduct Rules for Public Servants, provisions of Indian Company law, administrative regulations, and binding integrity pacts for public procurement.
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.