Prevention of Corruption (Amendment) Act, 2018

With the objective of reviewing anti-bribery and anti-corruption laws in India, the Prevention of Corruption Act, 1988 (‘PCA’) has recently been amended by the Prevention of Corruption (Amendment) Act, 2018 (‘Amendment Act’). The Amendment Act has come into force with effect from July 26, 2018. Some of the key amendments are summarized below:1.  Giving Bribes to a Public Servant is now a Direct Offence: Prior to the amendment, a bribe giver could be penalized under the PCA only for abetment of an offence committed by the bribe receiver. The Amendment Act has now made the act of giving any undue advantage to another person (directly or through a third party) to induce or reward any public servant to perform or improperly perform any public duty, an offence by itself. The term “undue advantage” includes any gratification (other than legal remuneration) and is not limited to pecuniary gratifications or gratifications capable of estimation in monetary terms. Some exceptions have been built in, for example, for persons who claim that the bribe is given under coercion, in which case, they have to inform the investigating agency within seven days of giving the bribe. The immunity previously available under Section 24 of the PCA grants an immunity to a bribe giver from prosecution for any statement made by the bribe giver during a corruption trial against a bribe receiver. This protection granted to the bribe has been done away with pursuant to the Amendment Act.2. Offences by Public Servants: Under the Amendment Act, a public servant obtaining, accepting or attempting to obtain any undue advantage will be held guilty, if the act is done: (i) with the intent to perform or cause the performance of public duty improperly or dishonestly; (ii) as a reward for improper or dishonest performance of any public duty; or (iii) for inducing another public servant to improperly or dishonestly perform a public duty. It has been further clarified that, obtaining, accepting, or the attempting to obtain an undue advantage will itself constitute an offence by a public servant, even if the performance of public duty is not improper by the public servant. For example, if a public servant accepts an amount of INR 5000 in order to process a routine ration card application on time / expeditiously, he will be guilty of an offence under the PCA. Further, misuse of the earlier Section 13(1)(d)(iii) of the PCA is now being plugged by the Amendment Act, which recognizes only two forms of criminal misconduct by a public servant, being: (a) misappropriation of property entrusted to a public servant; and (b) possession of disproportionate assets to intentionally enrich oneself illicitly. Under the Amendment Act, except when a public servant is caught red-handed, the police cannot arrest or begin an enquiry or investigation without the approval of the relevant Governmental authority. These amendments are aimed at protecting bona fide performance of duties by public servants and enabling them to take bona fide decisions without fear of harassment under the PCA.3. Offence under PCA by Commercial Organizations: A commercial organization will now be liable, if any person associated with it offers any undue advantage to induce or reward any public servant in exchange of any advantage for the business or conduct of the business. In addition to Indian companies, commercial organizations also include foreign entities carrying on business in India.An associated person, for this purpose, includes any person who performs a service for the commercial organization. The test to determine an associated person in respect of a commercial organization would be by reference to all the relevant circumstances and not merely by reference to the nature of relationship between such person and the commercial organization. Further, where the offence is committed by a commercial organization with the consent or connivance of any director, manager, secretary or any other officer of such commercial organization, pursuant to the Amendment Act, such persons will also be liable to face punishment with imprisonment and fine. Commercial organizations may prove innocence by demonstrating that it had adequate procedures which were in compliance with prescribed guidelines to prevent persons associated with it from undertaking such conduct. However, guidelines in this regard have not yet been prescribed under the PCA.4. Timeframe for Trial of Offences: The Amendment Act provides that trial by the special judges under the PCA will be conducted on a day-to-day basis, with an endeavor to complete such trial within a period of two years. This period may be extended by an additional six months at a time, for reasons to be recorded in writing. However, in aggregate, the proceedings should ordinarily be concluded within four years.5. Attachment and Confiscation of Properties: The Amendment Act grants the ability to the Government to attach or confiscate any money or property which has been procured by means of an offence under the PCA, in accordance with Criminal Law Amendment Ordinance, 1944.6. Amendments to PMLA: The scheduled offences under the Prevention of Money Laundering Act, 2002 now include within its ambit, the offences listed under Sections 7 to 14 of the PCA (including the offence of bribing of public servant and the offence of bribing of public servant by a commercial organization).7. Penalties Prescribed:

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