Warning for the Bribe Tribe ; Us Mncs Whose Indian Operations Get Sucked Into the Country's Flagrant Vortex of Corruption Can Get Into Big Trouble Back Home.

Summary

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In a closed-door meeting in June 2009 in Cuffe Parade, Mumbai, Elliott Leary, Partner of KPMG LLP, USA addressed around 50 chief financial officers of Indian subsidiaries of multinational corporations. The subject: How to make their operations in the country bribery-proof. It seems that the best worked-out systems and processes to stop corruption in its tracks have proved futile in many countries in the world, including India, as the devil hid itself in the implementation. All over the world, according to Leary, the processes have been beaten by slack implementation. The challenges in India are bigger.

The cause for worry among the MNC subsidiaries is the Foreign Corrupt Practices Act (FCPA) of the US which came into effect in 1977 but prosecution has picked up recently. This Act penalises US companies or companies listed in the US for acts of corruption by their arms in other countries. Often, this act includes payments made through third parties like contractors, consultants or distributors.

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Warning for the Bribe Tribe ; Us Mncs Whose Indian Operations Get Sucked Into the Country's Flagrant Vortex of Corruption Can Get Into Big Trouble Back Home.

The US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) of the US have both prosecuted companies for alleged bribery in other countries, including India. While the DoJ picks on the companies for violating the FCPA, t...

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