TerraLex Guide to Anticorruption Legislation

No.

The Pakistan Penal Code, 1860 (the “PPC 1860”), the Prevention of Corruption Act, 1947 (the “POCA 1947”), and the National Accountability Ordinance, 1999 (the “NAO 1999”).

The PPC 1860 and the POCA 1947 prohibit giving or receiving illegal gratification to or by a public servant as a reward or incentive for performing or refraining from performing any official act, or to another person for using corrupt or illegal means to influence a public servant's actions.

The NAO 1999 has a broader scope, addressing corrupt practices by public office holders and others. It prohibits illegal gratification, accepting or offering valuable items without appropriate consideration from someone involved or likely to be involved with official functions, misappropriation of entrusted property, misuse of authority for monetary gain, willful default, cheating the public, criminal breach of trust regarding entrusted property, and owning assets disproportionate to known sources of income.

No.

No.

No.

Yes, in certain circumstances, including where the relevant act is done with the consent of the corporation or where the corporation was aware of it.

Yes, but only in relation to the citizens of Pakistan.

Yes, in certain circumstances.

The sanctions vary depending on the appliable legislation and the nature of the offense committed by an accused person. Broadly, an individual may be punished with imprisonment up to 14 years, or with a fine, or with both. Any proceeds of crime may also be confiscated. A company may be punished with a fine and any proceeds of crime may be confiscated.

A company can be held liable for corruption offenses committed in the course of its business by individuals in charge of its affairs, provided these individuals possess sufficient power and influence to be considered the company's directing mind. However, a company cannot be prosecuted for offenses punishable solely by corporal punishment. In such cases, the individuals committing or abetting the offense will be prosecuted instead.

Currently, there is no mandatory requirement for companies to implement preventive measures. However, the Listed Companies (Code of Corporate Governance) Regulations, 2019, impose a comply-or-explain obligation on listed companies to implement and monitor the effectiveness of corporate governance policies. These companies must ensure a formal code of conduct that promotes an ethical culture is in place. Adequate systems and internal controls must be established to identify and address grievances arising from unethical practices. Each listed company should also implement a whistleblowing policy and establish a mechanism to receive and handle complaints fairly and transparently, providing protection against victimization for the complainant.

The implementation of a compliance program by a company may not constitute an absolute defense in the event of an established offense under the PPC 1860, the POCA 1947, or the NAO 1999. However, it can be considered a mitigating factor by the court when determining the quantum of punishment.

No settlement procedure is available under the PPC 1860 or the POCA 1947 for corruption offenses.

However, the NAO 1999 provides a voluntary return and plea bargain procedure. If a person voluntarily comes forward before the authorization of an investigation under the NAO 1999 and offers to return assets or gains acquired through the offense, the designated authority may accept the offer. After determining the amount due and its deposit, the person may be discharged from any liability regarding the matter. Additionally, after the authorization of an investigation, at any stage before or after the commencement of the trial, or during an appeal under the NAO 1999, an accused person may enter a plea bargain. This procedure involves the accused returning assets or gains acquired through the offense and agreeing to other terms with the designated authority. The plea bargain must be approved by the court, after which the accused person will be released.