Penalty kick

The dawn raids by the Swiss authorities to arrest several football officials and the impending move to extradite them to the US signals the arrival of a new era on enforcement of anti-corruption laws.

The manner in which this extraordinary operation was conducted not only brings into focus the seriousness with which the US Justice Department and other agencies enforce anti-corruption laws, but brings into limelight the emerging trend of international cooperation in this area.

If one were to crystal gaze the actions of the US and Swiss authorities and put them in perspective, a couple of issues emerge that provide a glimpse on the evolution of the anti-corruption laws.

Actions of the type we see in the Fifa issue matter are not decided overnight.

They are based on leads and evidence collected by law enforcement and other agencies over extended periods of time.

Given that the arrests were made by authorities in Zurich for a matter involving US law implies that the evidence collected would need to be detailed and convincing to a level that secured international cooperation.

It also shows that the US will continually invest in identifying cases and developing leads when it sees potential unethical conduct related to violation of US law, even though offences may be global in nature.

The Foreign Corrupt Practices Act (FCPA) of the US provides for penal action against individuals and organisations for corruption charges. The action ranges from finesto jail .

The key message from the Fifa crisis is that personal liberties are at stake for wrongful conduct and authorities are not going to hesitate to charge individuals and enforce laws strictly when the situation demands.

The fact that individuals were arrested and detained in Zurich signals that not only the movement of suspects was monitored but that meticulous planning and coordination went into identifying a place where action could be taken.

The US has clearly sent a message that it will leverage its international relations to secure its interests and uphold its laws.

The charges being brought out against the Fifa officials related to potential bribes made in foreign jurisdiction but with the crime potentially agreed to and prepared in the US and payments carried out via US banks.

This again signals an important trend on how the US government views jurisdiction. The very fact that the transaction may have a US footprint may trigger US anti-corruption laws.

So what does this mean for companies in India? The US-Swiss enforcement action signals the advent of an era where it will become even more important for Indian companies having a US footprint to be on the right side of US laws on anti-corruption.

The very fact that detentions or arrests are made during visits of executives abroad signifies the seriousness with which the US views anti-corruption laws and the efforts that it will make to enforce these.

India still ranks low on global indices related to bribery and corruption and it will remain a jurisdiction that will be watched by regulators overseas for misconduct involving their anti-corruption, the US FCPA being a key one.

It will thus be increasingly important for Indian companies and individuals to know exactly when and where their obligations/liabilities under the FCPA get triggered and what they need to do in order to effectively comply with these.

The writer is Partner-Risk Advisory, PwC India

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