Mumbai: The Indian companies which have business relations with Britain, raise finance or have subsidiaries there, will soon find themselves prosecutable under the new British Bribery Act which came into effect on July 1 in place of the old Victorian law.
According to accounting professionals and lawyers who gathered here over the weekend to discuss the implications of the law on domestic firms, the scope of the new anti-bribery law is too wide to be ignored.
"Large number of Indian firms will get affected by the new British Bribery Act. Promotional activities, including corporate hospitality will become increasingly sensitive issues. Provisions of the Act are wider compared to the US Foreign Corrupt Practices Act or our Prevention of Corruption Act," said Deloitte Touche Tohmatsu India senior director Neeta S Potnis.
Pointing out that non-compliance would attract stringent penal actions, she said, "domestic companies need to be aware of the requirements of this law and take proactive steps to have adequate systems in place."
A firm headquartered in India will find itself answerable to the British Serious Frauds Office (SFO) even if any of its arms in any other country had indulged in bribery or any corrupt practices, and if this resulted in loss of business to British companies or interests.
The law provides that the English prosecutors can proceed against an Indian firm that has a branch in Britain for something that it has done outside, say in Indonesia, Africa, or anywhere else in the world, she said.
"English prosecutors would have jurisdiction over an Indian firm as long as it does some business in Britain. More importantly, it is not just in relation to what this firm does in Britian, but what it does elsewhere in the world," said London-based legal firm Debevoise & Plimpton's Peter Goldsmith.