Foreign Corrupt Practices Act

Indian Ambassador to the US Meera Shankar’s recent letter to the PMO listing seven instances in which US companies (including a subsidiary of Dow Chemicals) bribed Indian officials has caused a huge stir. More interesting is how she got details — through a US law which punishes US companies for bribing officials abroad. I wrote a newsreport on this legal framework in today’s Indian Express. India of course, has no such law, has signed on to no international commitments. Still, ‘pax Americana’, claims the Left. Hypocritical?

Written by
Vinay Sitapati
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  • Thanks for highlighting this Vinay. The number of FCPA investigations went down under the Bush administration, but may be on its way up again. It's always seemed like a good U.S. law to me, but American business does have a point that it puts them at a disadvantage. If India signed on to the OECD convention you mention that would help diminish the strength of that rebuttal. At any rate, India should be concerned if it's government officials are being bribed by American (or other) companies.

    It would help even more if countries around the world passed their equivalent to the the FCPA. In particular, US companies complain they are put at a disadvantage in the resource race in Africa. Indian mining companies are now a major player in central Africa, Indian oil companies in the north. Who is regulating these companies to make sure they aren't bribing government officials to the disadvantage of the local population? Probably the local governments aren't doing this so well and the Indian government hasn't taken any steps I can see to discourage this practice. In fact, like in most countries, it's perfectly legal under Indian law for an Indian company to bribe a foreign government official.

  • Nick, I couldnt agree with you more. I frankly think its quite pathetic that even after these companies have admitted to bribery in the US, the Indian govt. has not caught/prosecuted/named a single Indian official who accepted the money. In fact, the CPM's Brinda Karat pointedly asked Agriculture Minister Sharad Pawar why action has not been taken on the agriculture officials that a subsidiary of Dow has admitted to bribing. I think its a national shame.

    Equally, I think its a bid misleading for opposition parties to single out US companies for blame. The fact is that its their laws that have caught on to this. as you point out, we dont even have an equivalent law.