US President Donald Trump has inked an executive order asking the justice department to pause the Foreign Corrupt Practices Act (FCPA).
Interestingly, Adani Group chairman Gautam Adani was indicted under this law over alleged bribery connected to a solar power plant. Adani had earlier dismissed the "baseless" allegations, saying he will fight the issue legally. Notably, Trump's move comes ahead of Prime Minister Narendra Modi's visit to the United States on February 12 and 13.
What is FCPA?
The Foreign Corrupt Practices Act (FCPA) was passed in 1977 to prevent US companies from sparking rampant corruption that violates the rule of law globally. In 1998, the law was amended to include foreign individuals and companies involved in bribery within the US.
The anti-corruption law applies not only to paid bribes, but also those that are offered, planned or authorised by firms.
Allegations against Adani
The US department of justice (DOJ) earlier claimed that Adani, his nephew Sagar Adani and his six aides promised Indian officials over $250 million in exchange of energy contracts funded by investors, some of whom were Americans. As mentioned above, Adani had denied these allegations.
Trump's executive order
Signing the executive order at the White House, Trump said the law "sounds good, but it hurts the country." He said the US companies are at an economic disadvantage as they are unable to make deals fearing jail time.
The criminal prosecutions under FCPA have been paused so that foreign competitors do not get an upper hand over US businesses.
Modi, Trump and tariff cuts
The Union Finance Ministry has slashed tariffs in the recent budget amid Trump's move to impose retaliatory tariffs on its neighbours and some friendly countries. Modi is set to announce further tariff cuts to cajole Trump who recently announced duties on steel and aluminium entering the US.
Besides trade and tariffs, Modi will also discuss ties in the defence, energy and technology sectors. Modi said the US tour will be an opportunity to cooperate with Trump, just like the leaders did during the president's first term.
Earlier, Trump said India is a "tariff king" and a "very big abuser" on trade. He had asked India to buy more US security equipment to bring down the trade deficit between the two countries.
