Why Private Companies Need Anti-Corruption Compliance Despite Not Being Public Authorities

Introduction

Traditionally, anti-corruption laws were primarily focused on public officials who receive bribes rather than private entities who pay them. However, this paradigm has shifted significantly in recent years, with legislative changes in India creating direct liability for private companies involved in corrupt practices. This shift has made it imperative for private companies operating in India to implement robust anti-corruption compliance programs despite not being public authorities themselves.

India's Legal Framework for Anti-Corruption

The Prevention of Corruption Act, 1988 (“PCA”) is the primary anti-corruption legislation in India. Until recently, the PCA primarily targeted public servants who received bribes. However, significant amendments to the PCA in 2018 transformed the anti-corruption landscape for private companies. The amended PCA now expressly targets bribe-givers, including commercial organizations and persons in charge of such organizations.