ANTI-CORRUPTION LAW SERIES-7
ANTI-CORRUPTION LAW SERIES-7
Black
Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015
This enactment levies penal rates of tax on any undisclosed asset or income held abroad by a person resident in India and penalises individuals for non-disclosure of foreign income or assets, wilful attempt to evade tax, failure to furnish requisite returns, etc. The objective of the Act is to target undisclosed incomes and assets (potentially derived through illegal means, including corruption), which have been stashed offshore by resident Indians.
This enactment levies penal rates of tax on any undisclosed asset or income held abroad by a person resident in India and penalises individuals for non-disclosure of foreign income or assets, wilful attempt to evade tax, failure to furnish requisite returns, etc. The objective of the Act is to target undisclosed incomes and assets (potentially derived through illegal means, including corruption), which have been stashed offshore by resident Indians.
The
Fugitive Economic Offenders Act, 2018
In order to prevent offenders accused of economic offences from evading prosecution within the country, the Fugitive Economic Offenders Act, 2018 (‘FEOA’) was recently enacted on July 31, 2018. The FEOA targets fugitive economic offenders against whom an arrest warrant has been issued for certain predicate economic offences involving Rs. 100 crores and who have either left the country to avoid criminal prosecution or are abroad and refuse to return to face criminal prosecution. Predicate offences under the FEOA cover cheating and counterfeiting under the Indian Penal Code, 1860, offences under the PCA, PMLA, corporate fraud under the Companies Act, benami transactions and tax evasion. The strength of the FEOA lies in its far-reaching measures of immediate confiscation of all properties of any abscondee, which act as a strong deterrent against any desertion from the country.
In order to prevent offenders accused of economic offences from evading prosecution within the country, the Fugitive Economic Offenders Act, 2018 (‘FEOA’) was recently enacted on July 31, 2018. The FEOA targets fugitive economic offenders against whom an arrest warrant has been issued for certain predicate economic offences involving Rs. 100 crores and who have either left the country to avoid criminal prosecution or are abroad and refuse to return to face criminal prosecution. Predicate offences under the FEOA cover cheating and counterfeiting under the Indian Penal Code, 1860, offences under the PCA, PMLA, corporate fraud under the Companies Act, benami transactions and tax evasion. The strength of the FEOA lies in its far-reaching measures of immediate confiscation of all properties of any abscondee, which act as a strong deterrent against any desertion from the country.
The
past few years have witnessed a stark change in the approach towards
enforcement of anti-corruption laws. One of the driving forces behind
this change has been the increased public focus on the issue of corruption in
government, combined with an active role played by the judiciary in corruption
matters. This movement was triggered by the discovery of several
instances of large-scale corruption by highly influential ministers and
bureaucrats (in particular, scams concerning the allotment of telecom spectrum
and organization of the Commonwealth Games in Delhi in 2010). This led to
a public outcry regarding the impact of corruption on the Indian economy and
its citizens – amidst growing public dissatisfaction regarding the state of
affairs, the government reacted by enacting various legislative measures, such
as the Lokpal and Lokayuktas Act, 2013, to bolster perceived weaknesses in
India’s anti-corruption laws. Further, the judiciary also undertook a
supervisory role in the investigation into the telecom spectrum case and
closely scrutinized the progress of the investigative agencies.
On
account of an increasing number of delinquent borrowers and non-performing
assets, anti-corruption enforcement has recently directed its focus towards
corruption in the financial services sector, particularly in the approval of
large loans. The Supreme Court of India took an expansive view of banking
law by holding that employees of banks (whether public or private) are
considered public servants under the PCA.1 In 2016, the CBI arrested the
former chairman and managing director of the
United Bank of India for having obtained funds to benefit herself and a
private firm owned by her husband and son from private companies to whom
various credit facilities were granted by the bank. Law enforcement
agencies have initiated proceedings against various corporate giants and
multi-millionaire businessmen for defrauding public and private sector
banks. While certain accused individuals have fled India, the Indian
government has, in parallel, increased its efforts to extradite such
individuals and has charged them under provisions of the PCA, PMLA and the
Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax
Act, 2015.
Another
growing trend is that enforcement agencies have become more sophisticated in
unravelling complex corporate or financial structures, and have increased their
reliance on technological tools. Importantly, they have also shown a
willingness to take the assistance of specialists such as private forensic
auditors or investigators to help them in this endeavor, and provide expertise
that they may lack themselves. Indian enforcement agencies have also
strengthened their relationships with agencies from other jurisdictions, and we
have witnessed far more cooperation and coordination in cross-border
enforcement efforts.
Perhaps
the most welcome change has been an increased appetite among enforcement
agencies to aggressively investigate and pursue corruption cases, even against
high-profile politicians and powerful bureaucrats – this marks a clear
departure from the past, where such cases may have been approached with
lethargy and caution. Recent years have seen instances where former
central government ministers (telecom spectrum scam), high-ranking politicians
and bureaucrats (Commonwealth Games scam), a former head of the Indian air
force (defence procurement scam), etc., have been investigated, charged and
prosecuted by Indian enforcement agencies – such cases remain under trial as of
date. Recently, an influential state politician was convicted by the
Supreme Court of India for possessing disproportionate assets.
At
the outset, it should be noted that unlike the US Foreign Corrupt Practices
Act, the PCA expressly prohibits the payment of ‘facilitation payments’ or
‘grease money’. It is important to recognise that, unlike the Service
Rules or the FCRA, the PCA does not provide for any de minimis thresholds for
gifts, meals, or hospitality in respect of public servants and the thresholds
specified under the Service Rules and the FCRA can, at best, be viewed as
guidelines for de minimis amounts, on the assumption that there is no intent to
violate the PCA. Moreover, the Supreme Court of India has held that the
quantum paid as gratification is immaterial and that conviction will ultimately
depend upon the conduct of the delinquent public official and proof established
by the prosecution regarding the acceptance of such illegal
gratification.2 It should be noted that the true test of whether a person
shall be prosecuted under any anti-bribery legislation is whether the mens rea
to commit an act of corruption or violate any anti-bribery law existed as on
the date of such payment.
Therefore,
the receipt of gratification or valuable things (however insignificant their
value) by a public servant, which is not within the legal remuneration of the
public servant, could potentially attract prosecution under the PCA. The
provision of gifts, meals, or hospitality of a nominal value (and below the
thresholds specified in the Service Rules or FCRA) could also be considered
inconsistent with the PCA and constitute an illegal act. Additionally,
the PCA does not have an ‘adequate procedures’ defence – however, the
compliance measures undertaken by a company may be helpful in demonstrating its
lack of mens rea to commit an offence under the PCA (for example, where an
employee performs an unauthorized act of bribery).
In view of the foregoing, the compliance regimes of multinational organisations operating in India have to be carefully crafted and catered to the Indian legal framework, and specific legal advice ought to be obtained in this regard.
In view of the foregoing, the compliance regimes of multinational organisations operating in India have to be carefully crafted and catered to the Indian legal framework, and specific legal advice ought to be obtained in this regard.
Attorney-client privilege
Indian law recognizes that communications between an attorney and a client are privileged. It is, however, important that advice on Indian law be sought when evaluating the availability of privilege in the specific facts of every case. In the context of an investigation, we suggest that the company should appoint an Indian law firm to conduct the investigation, and (although this position remains untested as a matter of law) any experts, investigators, or auditors should be appointed by the law firm to extend the privilege (to the extent available) to any work product prepared by such experts, investigators, or auditors.
Indian law recognizes that communications between an attorney and a client are privileged. It is, however, important that advice on Indian law be sought when evaluating the availability of privilege in the specific facts of every case. In the context of an investigation, we suggest that the company should appoint an Indian law firm to conduct the investigation, and (although this position remains untested as a matter of law) any experts, investigators, or auditors should be appointed by the law firm to extend the privilege (to the extent available) to any work product prepared by such experts, investigators, or auditors.
S.No
|
Dear Ngo leaders promote activities such as :-
(All
forms of corruption must be ended to secure the basic rights of all people
and ensure a world where everyone can live in dignity)
|
1.
|
Organize, communicate, and raise
awareness on Anti corruption laws to your target people.
|
2.
|
Identify the victims and witnesses
of corruption in your working area
|
3.
|
Identify the need of Legal
consultancy for Consumer rights, women’s rights, Child rights, aged rights,
revenue, education, documents registration, social welfare, public and temple
property panchayat, forest, insurance, and all government department
corruptions related issues etc
|
4.
|
Contact for such issues with an
affidavit and we will make the difference
|
We
also know that corruption can’t be rooted out in one big sweep. Rather,
fighting it is a step-by-step, project-by-project process.
|
MANISHANKAR
CEO-Anti-Corruption And Human Rights Movement®-Chennai
Mobile:91
9087856137
Follow us on:
Comments
Post a Comment