1. EFFECT OF ANTI - CORRUPTION LEGISLATION, CRIMINAL ENFORCEMENT & ADMINISTRATIVE SANCTIONS ON EXPANDING EAST-WEST INVESTMENT EFFECT OF ANTI - CORRUPTION LEGISLATION, CRIMINAL ENFORCEMENT & ADMINISTRATIVE SANCTIONS ON EXPANDING EAST-WEST INVESTMENT Ravi NATH India Partner, RNClegal/Rajinder Narain & Co. 1 April 20, 2013 CBIC Session

2. ANTI - CORRUPTION REGIME 1.Legislative framework 2.Administrative / Institutional framework 3.International Conventions / Regulations 4.Court precedents / Judge made law RAVI.NATH@ RNCLEGAL.COM 2

3. ANTI - CORRUPTION REGIME – Cont. 1. Legislative framework  Corruption Act  Money Laundering Act  Right to Information Act  Benami Transactions Prohibition Act RAVI.NATH@ RNCLEGAL.COM 3

4. ANTI - CORRUPTION REGIME – Cont. 1.Legislative framework (slide 3) 2.Administrative / Institutional framework  The Central Vigilance Commission  The Central Bureau of Investigation  The Office of the Comptroller and Auditor General  The Chief Information Commission  E-governance RAVI.NATH@ RNCLEGAL.COM 4

5. ANTI - CORRUPTION REGIME – Cont. 1.Legislative framework (slide 3) 2.Administrative / Institutional framework (slide 4) 3.International Conventions / Regulations  UN Convention against corruption - not ratified by Japan, Germany, Korea and others.  Financial Action Task Force  ADB’s anti-corruption action plan for Asia-Pacific RAVI.NATH@ RNCLEGAL.COM 5

6. ANTI - CORRUPTION REGIME – Cont. 1.Legislative framework ( slide 3 ) 2.Administrative / Institutional framework ( slide 4 ) 3.International Conventions / Regulations ( slide 5 ) 4.Court precedents / Judge made law  Cancellation of contract / withdrawal of tender  Demand or solicitation is an offence  Employment of decoys and spies / sting operations RAVI.NATH@ RNCLEGAL.COM 6

7. ADMINISTRATIVE SANCTIONS Object: to prevent frivolous prosecutions of public servants Object: to prevent frivolous prosecutions of public servants Without sanction, Court will not cognize offences of gratification, Without sanction, Court will not cognize offences of gratification, abetment, misconduct etc. (u/s 7, 10, 11, 13 and 15 of the Corruption Act) abetment, misconduct etc. (u/s 7, 10, 11, 13 and 15 of the Corruption Act) Sanction to be given: Sanction to be given:  By competent authority for all Govt. employees except Group A Officers  By Govt. itself for Group A Officers  Within 3 months Courts not to direct Government to issue sanctions Courts not to direct Government to issue sanctions RAVI.NATH@ RNCLEGAL.COM 7

8. US AND UK LAWS; COMPARISON WITH; US : Foreign Corrupt Practices Act, 1977 US : Foreign Corrupt Practices Act, 1977 UK : Bribery Act, 2010 UK : Bribery Act, 2010 RAVI.NATH@ RNCLEGAL.COM 8

9.  IS INDIAN ENFORCEMENT REGIME EFFECTIVE? 9  IS INDIA REALLY FIGHTING CORRUPTION?  CORRUPTION IN INDIA – IS IT A ‘FACT OF LIFE’?

10. 10 RAVI.NATH@ RNCLEGAL.COM EXAMPLES OF RECENT SCAMS Bribery and abuse of power (Coalgate) Adarsh Housing Commonwealth games (US$ 13b)

11. RAVI.NATH@ RNCLEGAL.COM 11 2G spectrum allocation (US$ 40 b) Kickbacks in defense Corporate fraud EXAMPLES OF RECENT SCAMS– Cont.

12. STEPS FOR IMPROVEMENT Strict law enforcement Strict law enforcement Procedure simplification: legal and administrative Procedure simplification: legal and administrative Electoral reforms Electoral reforms Citizen empowerment Citizen empowerment Police reform Police reform RAVI.NATH@ RNCLEGAL.COM 12

13. Removal / reduction in number of intermediaries Removal / reduction in number of intermediaries Transparency and accountability in governance Transparency and accountability in governance Corruption free governance a fundamental/human right Corruption free governance a fundamental/human right Whistleblower policy Whistleblower policy RAVI.NATH@ RNCLEGAL.COM STEPS FOR IMPROVEMENT – Cont. 13

14. Ravi NATH RNClegal / Rajinder Narain & Co. International Commercial & Corporate Lawyers T: + 91 11 4122 5000 C: + 91 98110 27193 E: ravi.nath@rnclegal.com www.rnclegal.com Questions? 14