Foreign employees who work on sovereign-wealth funds would be considered government officials and covered by the FCPA, legal experts said.

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But, experts say, it also allows Indians to launder vast amounts of untaxed wealth by sending their illegal cash to Mauritius, then "round-tripping" it back to India in the form of legal investments.

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Experts said the change represented a flight to London by overseas investors who want to preserve their wealth in the face of political and economic upheaval in the eurozone.

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