Decriminalize white-collar crime to make doing business easier
Union Budget 2023 stressed the importance of improving business operations in India.
To achieve this, several compliance requirements have been relaxed and certain activities previously criminalized have been decriminalized.
To reduce the compliance burden on individuals and businesses, the Jan Vishwas Act made amendments to 42 statutes including the Indian Post Office Act 1898; Environment (Protection) Act, 1986; and Information Technology Act, 2000.
Decriminalization should apply to crimes that do not have any fraudulent or unethical aspects and do not have a negative impact on the public interest.
The aim is to create a system in which sanctions are imposed instead of criminal proceedings, the latter being reserved for serious violations.
Decriminalizing economic crimes in India requires a coordinated strategy by central and state governments.
Recommended course of action
The Government of India can take the lead by offering guidelines, best practices and technical assistance to States and Union Territories.
It could also offer financial incentives and other support to implement the process efficiently. States can engage in public-private partnerships with other stakeholders to ensure that the decriminalization process is effective and meets the needs of business and society.
Finally, they can consult judicial institutions and legal experts to ensure that the decriminalization process is fair and transparent. Lawyers can assist states and UT in developing laws and regulations consistent with decriminalization concepts.
Decriminalization of white-collar crime is an emerging trend in many countries to facilitate doing business. Singapore, for example, is seen as a model of easy business, thanks to its tight regulatory framework, efficient government processes and support for entrepreneurship and innovation.
The Intellectual Property Office of Singapore and the Singapore International Arbitration Center were established to handle commercial disputes and resolve them through alternative processes such as arbitration and mediation.
In the United States, several states impose civil fines rather than criminal charges for certain white-collar crimes. For example, in California, white-collar crimes such as securities fraud and embezzlement are subject to civil, not criminal, prosecution.
Lighten the load
The UK has taken steps to ease the administrative burden on businesses, including fewer rules, improved compliance processes and easier access to finance and support for businesses. There are alternatives to criminal punishment in cases such as violations of the Company Directors Disqualification Act 1986, which result in fines or restrictions on future participation in company management.
As India has risen from 142nd in 2014 to 63rd in 2022 in the World Bank’s Ease of Doing Business rankings, further progress is being sought. The shift from criminal charges to fines for non-compliance is trendsetting.
India must continue to focus on reducing compliance requirements while providing a favorable climate for foreign investment.
(The author is a senior associate, King, Stubb and Kasiva, a law firm)
https://www.thehindubusinessline.com/business-laws/decriminalising-economic-offences-for-ease-of-doing-business/article66608786.ece Decriminalize white-collar crime to make doing business easier