corporate law
We would like to highlight a critical issue regarding allegations of bribery by Amazon Inc. involving government officials in India. This matter was initially reported on September 20, 2021, by a credible news agency under the headline “Amazon whistleblower alleges India lawyers bribed officials.” The details in this article suggest a potential violation of the Foreign Corrupt Practices Act (FCPA) that requires an immediate investigation. The relevant newspaper report is attached as Annexure A.
The FCPA holds extra-territorial jurisdiction, making it illegal for any entity to authorize bribery of foreign government officials to obtain or retain business, regardless of the location outside the United States. This establishes a strict prohibition against corrupt payments.
We believe that the alleged conduct by Amazon necessitates an immediate inquiry by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) to ensure that an independent and impartial investigation is undertaken.
There have been past instances where companies engaged in joint ventures utilized their legal channels to bribe officials in African nations, resulting in penalties under the FCPA. The liability under the act extends to payments made by third parties—such as lawyers acting on behalf of Amazon. Consequently, such actions do not exempt Amazon from potential civil or criminal liabilities under the FCPA.
We would like to reference several cases previously examined by the SEC which warrant thorough investigation:
These cases exemplify the SEC’s proactive approach to multinational corporations (MNCs) that have misused funds and violated FCPA provisions. A comparable investigation into the alleged bribery practices involving Amazon’s legal advisors and consultants in India is warranted.
Additionally, we would like to reference the "Resource Guide to the U.S. Foreign Corrupt Practices Act" published by the SEC. This guide outlines red flags associated with third-party interactions that may lead to FCPA violations, particularly emphasizing excessive commissions paid to third-party agents or consultants.
The aforementioned report mentions a statement by an independent counsel appointed by Amazon, indicating that Amazon was his largest client, reportedly providing upwards of Rs. 20 crores (INR 2 billion) annually. The whistleblower’s complaint suggests that this sum was misrepresented as legal expenses which were potentially used to bribe government officials. This scenario raises significant red flags, necessitating urgent investigation into Amazon's operations.
Finally, we wish to address concerns regarding how Amazon treats whistleblowers. Despite the company’s commitment to investigating these allegations, their history of mistreating whistleblowers leads to serious doubts concerning the integrity of any internal inquiry. Therefore, we strongly recommend launching a comprehensive and impartial investigation into Amazon’s alleged FCPA violations to uphold the integrity of this vital legislation.