Saturday , June 6, 2020 |   14:14:53 IST
About Us Contact Us Newsletters
I-T - Exemption can be allowed in respect of gains from transfer of shares held by Mauritian companies in Indian companies, where the actual management of the transferor companies is in the hands of an individual located in the USA, who is beneficial owner of the entire network of companies involved in the transaction: AAR (See 'Breaking News') TP- Companies providing engineering services in the field of electronics cannot be taken as comparable for Companies engaged in R&D services : ITAT (See 'Breaking News') I-T- penalty u/s 271(1)(c) is to be sustained where no concealment of income or furnishing inaccurate particulars is attributed to assessee, & if reasonable explanation is furnished for non-inclusion of arbitral award amount in taxable income: ITAT (See 'Breaking News') Indian Economy in ICU! - Like COVID-19, 'Vaccine' missing to bring it back to Life! (See The Cob(Web) in TIOL) I-T- Significant brand presence is a distinguishable feature and requires exclusion from the list of comparables : ITAT (See 'Breaking News') I-T- interest paid to a non-resident banker can be considered to have accrued or arisen in India so as to be taxable in India : ITAT (See 'Breaking News') Trump formally invites PM to G-7 Summit TP - If at time of assessment, data for relevant AY is available, same should be used for determination of arm’s length price of international transaction as against average of multiple year data : ITAT (See 'Breaking News') TP - Where the TPO erroneously considers amount of subvention fee for BPO segment, instead of the distribution segment, findings of DRP reversing such findings warrant any interference with: ITAT (See 'Breaking News')
Forgot Password
G20, EU & other votaries of Corruption-Free Governance Face Heat
By Naresh Minocha
Sep 21, 2018

Naresh Minocha, a veteran journalist, specializes in governance, polity, macro-economic issues, telecom, energy, chemicals and agriculture. He has been working as Consulting Editor with since 2004. He writes and speaks with authority on any issue he picks up. In-depth research is his passion. In his over 37-years journalistic career, he has worked in different capacities for both Indian and foreign media organizations. He continues to enjoy endless, learning journey that he started during his university days in the seventies. He believes his quest to be a ‘Know-All' is boundless.

PRESSURE from within and outside is mounting on global/regional bodies to act credibly against the corruption. This follows the realization among anti-bribery stakeholders that global bodies excel in ritualism of issuing communiqué & declarations.

Several member countries of global entities take half-hearted action against hydra-headed corruption in their respective national jurisdictions. Many members such as India prefer passive play and dislike disclosures on their anti-corruption conduct.

The frustration over this sorry state of affairs is palpable from G20 to European Union to Asia-Pacific Economic Cooperation (APEC).

As put by Transparency International (TI) in a release issued last month, "Despite more than 60 anti-corruption commitments from G20 leaders in the last few years, there is little evidence of any real progress".

In an earlier report issued during April 2018, TI exposed shocking laxity by G20 leaders in honouring their 2014 promise to act against anonymous companies.

According to the Report captioned 'G20 Leaders or Laggards ?', "Grand corruption, the trafficking of people and drugs, terrorism, tax and sanctions evasion, environmental crime, and money laundering are perpetrated or enabled on a global scale through the creation and use of anonymous companies and trusts. The United Nations Office on Drugs and Crime estimates that up to 5 per cent of global GDP - between US$800 billion and USD 2 trillion - is laundered each year".

TI has thus recommended that Governments should stipulate the registration of both domestic and foreign trusts operating in their country. Information on all parties to the trust and the real individuals behind them should be recorded.

G20 members' laxity has, for first time, brought the civil society (C20) & business (B20) affiliates of G20, to a common anti-corruption platform to goad G20 leaders to walk the talk.

In a joint statement issued on 28th June 2018, C20 and B20 voiced concern over "multitude of corruption scandals" during the recent years.

As put by the Statement, "In a context in which large-scale, cross-border corruption cases are becoming increasingly frequent, national level efforts to combat corruption often fall short. International forums such as the G20 are essential to allow governments to coordinate their anti-corruption policies and contribute to the global fight against corruption".

G20 Anti-Corruption Working Group (ACWG) says it works closely with B20 and C20 on anti-corruption efforts. It remains to be seen whether ACWG succeeds in getting C20-B20 recommendations accepted by G20 Leaders' Summit.

In March 2018, C20 recommended a slew of initiatives in its hard-hitting paper captioned 'The G20 and Anti-Corruption: Accountability'.

The C20 Paper says: "Corruption is not an add-on issue that can be dealt with in isolation".

It wants G20 members to implement existing anti-corruption commitments and principles, analyze whether they are having an impact, and share the lessons learned.

C20 says: "We strongly support reverting back to the publication of individual country accountability reports as took place during the Australian presidency. A combined progress report is not satisfactory for monitoring progress and leads to gaps".

The significance of this recommendation can be appreciated by going through reports produced by G20 ACWG. Its Accountability Report for 2017, for instance, is silent on inaction and delays by member in compliance with United Nations Convention against Corruption (UNCAC) and other global anti-corruption treaties/declarations.

Missing from public domain's version of AR report is annexure that contain "All questionnaires filled out by delegations".

Similarly, ACWG's report on 'technical assistance provision by G20 ACWG countries' is an exercise in platitudes. It concludes: "G20 ACWG countries have made remarkable efforts in developing domestic initiatives and providing technical assistance in a wide range of areas related to anti-corruption matters".

The Paper has listed a slew of initiatives that G20 members should take in preventing corruption and in taking action against the corruption.

Unlike G20, APEC on its own has struck improvement chord. In February this year, APEC thus noted "Given the crosscutting nature of activities related to combating corruption and ensuring transparency there is a need for a procedural structure to promote and coordinate these activities within APEC".

It stated: "the global nature of corruption and the implementation of the punitive and preventive anticorruption policies and practices consistent with the United Nations Convention against Corruption require that APEC coordinate closely with other international activities where appropriate, for which the Task Force would provide the single point of contact to promote and facilitate such interaction".

APEC accordingly constituted a working group to coordinate the implementation of its 'Santiago Commitment to Fight Corruption and Ensure Transparency', the 'APEC Course of Action on Fighting Corruption and Ensuring Transparency' and the 'APEC Transparency Standards.'

Compared to APEC, European Union (EU) is slipping faster on the anti-corruption front.

European Commission has drawn flak from anti-corruption activists for its failure to release its 2 nd anti-corruption report that was due for release in 2016.

In June 2011, the Commission announced its decision to publish an EU Anti-Corruption Report (ACR) every two years on Member States' efforts to tackle corruption. The Report's objectives include stimulating political will to fight corruption and improving the coherence of anti-corruption policies and actions taken by Member States.

In its maiden ACR issued during February 2014, European Commission noted that corruption continues to be a challenge for Europe. It reckoned corruption costs the European economy around 120 billion Euros per year.

Member States have taken many initiatives in recent years, but the results are uneven and more should be done to prevent and punish corruption, ACR observed.

The delay in release of EC's 2 nd ACR seems to have been mitigated by annual report of Group of States against Corruption (GRECO). Established in 1999 by the Council of Europe, GRECO comprises 48 European States and the USA.

According to GRECO's 2017 General Activities Report released during May 2018, "In 2017, allegations or confirmed cases of corruption have occurred in many countries and institutions".

A GRECO release quoted its Secretary General Thorbjørn Jagland as saying: "Corrupt practices both at national and international level, as we have witnessed within the Council of Europe's Parliamentary Assembly, constitute a major threat to our institutions and to democracy itself. It is crucial that national authorities and international bodies take a clear stance against corruption and swiftly implement anti-corruption measures".

Leave aside regional entities, the United Nations (UN) itself is grappling with the implementation of UNCAC.

UN General Assembly debated execution of UNCAC on 23 rd May 2018 to mark the 15th anniversary of UNCAC's adoption.

According to debate summary released last month by President of the General Assembly, "The event also provided a unique opportunity to take stock of persisting challenges to tackle corruption in all its forms at global, regional and national levels".

A challenge/limitation, created by UN itself is practice of giving member countries the discretion to not make public country's self assessment report on corruption and Peer Review Reports on compliance with UNCAC reports.

Several countries notably India has taken advantage of this discretion, leaving anti-corruption stakeholders wondering about the degree of soft attitude towards corruption in such jurisdictions.

When secrecy over anti-corruption measures become the governance mantra, how can corruption challenges be known and tackled? Should lack of transparency and accountability on anti-bribery framework not be deemed as an attempt to sustain corruption?

UNCAC provides for bribery prevention, criminalization and law enforcement against corruption, international cooperation on stolen or ill-gotten asset recovery amassed the corrupt and technical assistance and information exchange among members.

It is here pertinent to refer to a Report prepared by UNCAC Secretariat on Implementation of UNCAC's provision relating to corruption prevention.

The Report notes: "In general, countries did not elaborate on the concept of 'positions considered especially vulnerable to corruption' . Only one country had assessed and identified risk areas and positions vulnerable to corruption”.

Released during June 2018, the Report says: "No comprehensive information was available on public oversight of the use of subsidies by private entities and licences granted by public authorities for commercial activities, or on the restrictions on the professional activities of former public officials".

The report is based on the second cycle of the Mechanism for the Review of Implementation of chapter II (Preventive measures) of UNCAC.

Yet another UN report on State of Implementation of UNCAC deserves recollection.

Released during November 2017, the Study contains a long list of observations with regard to criminalization. The observations include: "the most notable outstanding issues concern the inadequate execution of measures, which are mandatory according to the Convention"

The Study continues: "More specifically, these include limitations in the scope of coverage of the term 'public official', especially in respect of members of national parliamentary assemblies; gaps in the establishment of bribery of national public officials as an offence (article 15); active bribery of foreign public officials and officials of public international organizations not being established as an offence and the apparent ineffectiveness of existing legislation".

After UNCAC, the second most cited anti-corruption convention deserves mention. It is the Organisation for Economic Co-operation and Development's (OECD's) Convention on Combating Bribery of Foreign Public Officials in international Business Transactions (OECD Anti-Bribery Convention).

The impact of the Convention is revealed by a study to mark 20 years of the Convention released during December 2017.

The Preface to the Study recalls the Convention as stating that "bribery raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions .”

The Study notes: "Twenty years later, these words still hold true. While investigations and prosecutions are on the rise year after year, half of the countries of the 43 Parties to the OECD Anti-Bribery Convention have yet to conclude a foreign bribery enforcement action".

Compliance with existing conventions apart, the global entities as well as governments should be willing to redefine corruption on the basis of emerging instances of malfeasance. This obviously calls for swift amendment of law or rules, as the case may be, to book corrupt entities. The Government should also factor in all direct and indirect measures of corruption, apart from TI's annual Corruption Perception Index that rank countries.

As put by an EU study, "Corruption is as difficult to measure as it is to define. Whereas most experts question a popular belief that the informal and hidden nature of corruption makes it unmeasurable, they do recognise the challenges of quantifying diverse aspects of this problem".

According to Study captioned 'Corruption in the European Union' released during September 2017, "an innovative tool has recently been developed in the EU - the European Quality of Government Index (EQI) - which provides a regional-level picture of the quality and impartiality of public services and the extent to which corruption plays a part in obtaining them".

Very few Heads of State have the courage to admit inadvertent or advertent mistakes in governance. Many Heads of State lack have the courage to embrace transparency and accountability in manner that is akin to putting oneself in bright sunlight.

As put United Nations Development Programme (UNDP) in a Guidance Note "Strong political will is undoubtedly the most critical success factor if an UNCAC Self-Assessment is to be useful as a reform tool. Being self-critical is not easy".

The Note titled 'UNCAC Self-Assessments- Going Beyond the Minimum' published in October 2010 adds: "It requires strong and courageous leadership to acknowledge and publicly identify weaknesses in national legislation, institutions and/or enforcement efforts".

The message is clear. Just as there is no escape from corruption; there is also no escape from political leadership that is party to corruption.

Hence the gap between precept and action against bribery would persist at national, regional and global levels. There is no escape to tight vigil on global ritualism and rhetoric over fighting corruption.

  • DTAA
  • Circulars (I-T Act, 1922)
  • Limited Treaties
  • Other Treaties
  • TIEAs
  • Notifications
  • Circulars
  • Relevant Partisyon of I-T Rules,1962
  • Instructions
  • Administrative Orders
  • DRP Panel
  • I-T Act, 1961
  • MLI 1xbit
  • Relevant Portion of I-T Act,1922
  • GAARtipobet
  • OECD Conventions
  • Draft Guidelines
  • DTC Bill
  • Committee Reports
  • Intl-Taxation
  • Finance Acts
  • Manual on EoI
  • UN Model
  • Miscellaneous
  • Cost Inflation Index
  • Union Budget
  • Information Security Guidelines
  • APA Annual Report
  • APA Rules
  • Miscellaneous
  • Relevant Sections of Actbuy Instagra
  • Instructions
  • Circulars
  • Notifications
  • Draft Notifications
  • Forms
  • TP Rules
  • UN Manual on TP
  • Safe Harbour Rules
  • US Transfer Pricing
  • FEMA Act
  • Exchange Manual
  • Fema Notifications
  • Master Circulars
  • Press Notes
  • Rules
  • FDI Circulars
  • RBI Circulars
  • Reports
  • FDI Approved
  • RBI Other Notifications
  • FIPB Review
  • FEO Act
  • CBR Act
  • NBFC Report
  • Black Money Act
  • PMLA Instruction
  • PMLA Bill
  • FM Budget Speeches
  • Multimodal Transportation
  • Vienna Convention
  • EXIM Bank LoC
  • Manufacturing Policy
  • FTDR Act, 1992
  • White Paper on Black Money
  • Posting Policy
  • PMLA Cases
  • Transfer of Property
  • MCA Circular
  • Book Review
  • Limitation Act
  • Type of Visa
  • SSAs
  • EPFO
  • Acts
  • FAQs
  • Rules
  • Guidelines
  • Tourist Visa
  • Notifications
  • Arbitration
  • Model Text
  • Agreements
  • Relevant Portion of I-T Act
  • I-T Rules, 1962
  • Circulars
  • MISC
  • Notification
  • About Us
  • Contact Us
    A Taxindiaonline Website. Copyright © 2010-2020 | Privacy Policy | Pvt.Ltd. All rights reserved.