Gaganpreet Singh Puri, Partner, Forensic Services, PwC India
The dawn raids carried out by the Swiss authorities to arrest FIFA officials on corruption charges and the impending move to extradite them to the US signals the arrival of a new era. The way in which this extraordinary operation was conducted in Switzerland brings into focus the seriousness of the US Justice Department in enforcing anti-corruption laws and the emerging trend of international cooperation amongst regulators.
If one were to crystal gaze the actions of the US and Swiss authorities and put them in perspective, a couple of issues emerge and provide a glimpse into the future of enforcement around anti-corruption laws.
Such stringent actions, as seen in the FIFA case, are not decided overnight. They are based on strong leads and evidence collected by law enforcement and other agencies over long periods of time.
Given that the arrests were made by authorities in Zurich pertaining to a case in violation of the US law implies that the evidence collected must have been detailed and convincing to a level that secured international cooperation. This also shows the meticulous planning and coordination which can only result from intensive government-to-government contact and seamless international cooperation. This clearly seems to be an evolving trend in the global fight against bribery and corruption.
The FIFA case shows that the US will continue to invest in identifying cases and develop leads when it sees unethical conduct related to the violation of the US law, even though the offences may be global in nature.
Many high profile cases reported in recent times are related to potential bribes made in foreign jurisdictions. These crimes were potentially agreed to and planned in the US and payments are carried out via US banks. This signals an important trend on how the US government views jurisdiction. The fact that the transaction may have a US footprint can trigger US anti-corruption laws.
The history of enforcement of the Foreign Corrupt Practices Act of 1977 (FCPA) shows that bribery and corruption charges can and will be brought against individuals. Actions have been taken in the past not only against individuals directly involved in bribery but also against people charged with governance and control.
As seen in a number of cases, US regulators are not going to hesitate to charge individuals and enforce laws strictly when the situation demands action. Criminal charges have resulted in significant fines, penalties and jail terms, in many cases; and some of these individuals are not US citizens. Clearly, a lot is at stake—personally and professionally—for individuals who can be charged with bribery and corruption.
Lessons for India
The US-Swiss cooperation in this endeavour signals the advent of an era where it will become even more important for Indian companies with a US footprint to be on the right track of US laws on anti-corruption. The fact that detentions or arrests are being made during the visits of executives abroad signifies the seriousness around enforcement.
In the light of what is happening in the global space today, Indian companies and nationals need to be extremely vigilant. The need of the hour is to not only have a state-of-the-art anti-bribery and anti-corruption compliance programme but also to undertake a comprehensive assessment of when and where obligations and liabilities under the FCPA get triggered and what needs to be done to effectively comply with them.
Excerpts of this blogpost were published in the Hindu Business Line article Penalty kick.