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A step towards anti-bribery and corruption - EY - India

A step towards anti-bribery and corruption

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This report analyzes the need for an anti-bribery and corruption compliance program for India, on the lines of the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act.

Bribery and corruption pose a serious threat to the sustained economic progress of developing and emerging economies and to the operation of free markets.

Here is a snapshot of the Indian scenario:

  • India — ranked 87th (out of 178 countries) in the Corruption Perception Index (2010) published by Transparency International
  • Significant increase in bribery and corruption cases in the country
  • Culture of acceptance of
  • Excessive discretion in exercise
    of governmental authority
Political environment
  • Difficult to monitor fund flows in a
    cash-oriented economy
  • Lack of awareness of global anti-corruption laws among Indian companies
Economic factors
  • Perceived corruption in political establishments
  • Many industries controlled or dominated by government-owned entities

In the 11th global fraud survey: bribery and corrupt business practices, a prominent minority (17%) of respondents globally are unsure whether their companies permit the use of facilitation payments. This uncertainty is slightly higher among Indian respondents, with 22% being unsure of the position held by their companies. According to 16% of Indian respondents, their companies allow facilitation payments.

What makes it imperative for India to have an anti-bribery and corruption compliance program?

  • It helps to set the "tone at the top" and drive the right culture in a company.
  • It may be seen by regulators as a proactive step taken by a company toward setting up adequate procedures to counter bribery and corruption risks within it.
  • It provides guidance in terms of initiating and implementing a system that needs to be followed and measurable benchmarks to be achieved.
  • Putting in place such a program makes it easy for the management to monitor its effectiveness by using a checklist.
  • A centralized compliance program will address the risks associated with various business units and products, provide stakeholders with relevant insights and enable them to take preventive actions at the right time.
  • The cost of implementing an enhanced and extensive anti-corruption compliance program should be weighed against that of defending a claim due to violation of anticorruption legislation.

This report explores the importance of bribery and corruption control in India and highlights key aspects of such a compliance program. Download this report for details.

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