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  • Writer's pictureSocial Justce Anti Corrption

Legal Framework for Fighting Corruption

Corruption can be defined as the abuse of entrusted power for private gain. It can impact a

nation’s development in various ways.

Prevention of Corruption Act, 1988 provides for penalties in relation to corruption by public

servants and also for those who are involved in the abetment of an act of corruption.

Amendment of 2018 criminalized both bribe-taking by public servants as well as bribe giving by any person.

The Prevention of Money Laundering Act, 2002 aims to prevent instances of money laundering and prohibits use of the 'proceeds of crime' in India.

The offence of money laundering prescribes strict punishment, including imprisonment of up to 10 years and the attachment of property of accused persons (even at a preliminary stage of investigation and not necessarily after conviction).

The Companies Act, 2013 provides for corporate governance and prevention of corruption and fraud in the corporate sector. The term 'fraud' has been given a broad definition and is a criminal offence under the Companies Act.

In cases involving fraud specifically, the Serious Frauds Investigation Office (SFIO) has been

set up under the Ministry of Corporate Affairs, which is responsible for dealing with white collar crimes and offences in companies.

The SFIO conducts investigation under the provisions of the Companies Act.

The Indian Penal Code, 1860 sets out provisions which can be interpreted to cover bribery and fraud matters, including offences relating to criminal breach of trust and cheating.

The Foreign Contribution (Regulation) Act, 2010 regulates the acceptance and use of foreign

contributions and hospitality by individuals and corporations.

Prior registration or prior approval of the Ministry of Home Affairs is required for receipt of

foreign contributions and in the absence of such registration or approval, receipt of foreign

contributions may be considered illegal.

Regulatory Framework:

The Lokpal and Lokayuktas Act, 2013 provides for an establishment of an ombudsman for the central and state governments (Lokpal and Lokayuktas, respectively).

These bodies are required to act independently from the government and have been

empowered to investigate allegations of corruption against public servants, which include the

prime minister and other ministers.

The Central Vigilance Commission though created in 1964, became an independent statutory body only in 2003 by an Act of Parliament.

Its mandate is to oversee the vigilance administration and to advise and assist the executive in matters relating to corruption.

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