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Dawn Raids: How to Best Prepare and Protect your Organization.
Rossana Buzzi, Esq.Assistant General Counsel &Ethics and Compliance Leader South EuropeInvensys Systems Italia Spa
What this presentation will cover?
• Definition and purpose of Dawn Raids
• Europe’s Data Protection Directive (95/36/EC) and the new proposed General Data Protection Regulation: which role ?
• How to plan, train and prepare your personnel to respond to an unannounced EU inspection.
• Dos and don’ts : practical and legal tips on how to manage and respond to investigators
• Q & A
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Definition and Purpose of Dawn Raids
• Dawn raids are the investigative tool of the European Commission and national competition authorities in Europe for unannounced inspections into suspected competition law infringements.
• Targets of EU raids are Companies / Organizations operating in EU Member States
• They can be conducted both at business and non-business premises.
• Raids at business premises may be conducted under an “authorization” or under “formal request/decision” (warrant). The first without the approval of the full Commission.
Definition and Purpose of Dawn Raids
• A company may refuse to submit voluntarily to EU inspection if carried out under an “authorization” only but …
• Commission officials conducting an investigation are usually assisted by officials from the relevant national competition authorities
• Inspectors will accept to wait in the lobby for no more than 15-30 minutes for the lawyers to arrive. Likely they will not wait at all if in-house lawyers are present on the company premises. Playing for time to start the inspection is high risk!
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Definition and Purpose of Dawn Raids
• EU inspection shall set scope of the investigation, time. What about geographical boundaries?
• “Accidental” discovery and an “illegal targeted search” outside of scope: which difference?
• What happens if inspectors uncover documents which fall outside of the scope of its original mandate? What distinct an illegal “targeted search” for out of scope evidence and an “accidental” discovery? The “plausible reasons” rule.
EU Data Protection Directive (95/36/EC) andGeneral Data Protection Regulation
• Interest of the citizens and their privacy opposed to the public interest
• European Court of Justice ruled to invalidate Safe Harbor (Oct. 2015)
• Companies in EU has the right to refuse providing information to inspectors if those information are under the hat of «personal privacy»
• It is likely that the new EU General Data Protection Regulation (which should come into force 2017-2018) will be more strict on privacy than EU Directive
• EU Data Protection like a shield also for international inspections
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How to plan, train and prepare your personnel to respond to an unannounced EU inspection
• It is important to define a company plan on how to respond to potential dawn raids.
• Trainings targeted for receptionists and management to familiarize with unannounced inspections procedures
• Simulate real life experience by guiding personnel that can be impacted by unannounced dawn raid
The Arrival at the front desk
• Inspectors to sign in as per company’s procedures.
• Receptionist to inform immediately the Managing Director and legal
• Receptionist to guide inspectors to separate room
• Management should take into consideration to give day off to all employees not impacted by the investigation
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The First Hour
• Supervise and coordinate the overall search
• Ask Inspectors to present their staff cards or identity cards
• Take a copy of the Commission’s mandate or warrant
• Fax the documents to Legal & Tax, and external legal counsel
• Ask Inspectors to await arrival of external counsel (15-20 min reasonable)
• Note the scope of the investigation
The Inspection
• Employees concerned by the scope of the inspection should be briefed
• A team of shadowers should always accompany the inspectors and take extensive notes (documents examined; questions asked) and assist with copies
• Examination of documents and devices by Inspectors.
• The Commission may ask factual questions related to the purpose and the scope of the inspection
• What to do with documents and interviews
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The Departure
The Departure
• Inspectors will establish a protocol. Necessary corrections or clarifications should be made
• Any open issues re privilege/relevance/confidentiality should be discussed
• Inspectors should be asked by the Coordinator for a copy of any records or inventories and about the next procedural steps.
• A detailed internal report should be prepared and shared / discussed among Senior Mgmt and counsel
• A briefing meeting with employees, legal counsel and management should be held by the Managing Director
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Dos Don’ts
• Destroy documents or data files• Volunteer information• Create any new documents relating
to the investigation• Tell anyone outside the company
what is happening• Allow the investigators access to
the office unattended• Sign any documents consenting to
a search• An employee is not obligated to
speak with investigators, though an employee may speak with the investigators if he or she desires.
• Call the Company‘s contact person and legal counsel at arrival
• Keep detailed written notes• Only hand out copies to the
Inspectors• Insist on your rights but do not
obstruct the inspection• Documents containing privilege, or
business/company secrets, should be stamped “Confidential” before being provided to investigators
Q & A
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Society of Corporate Compliance and EthicsEuropean Compliance & Ethics Conference
March 18 22, 2016Prague Czech Republic
Gabriel L. Imperato, Esq.Broad and Cassel
Fort Lauderdale, Florida
WHAT TO DOWHEN THEGOVERNMENT KNOCKS IN THE
UNITED STATES
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Enforcement
Department of Justice UnitedStates Attorneys
Inspectors General
Attorneys General
SEC
FTC
Other Federal and State Agencies
Multi Agency Task Forces – HEATProgram
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How Investigations Are Initiated
Competitor complaints
Consumer complaints
Current or former employee “Whistleblower”complaints – FCA, IRS, SEC
Insurance company complaints
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Investigative Techniques
Informal Interviews andrequests for documents
Insider Informants andWhistleblowers
Search Warrants
Subpoenas
Electronic Surveillance
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When The Government Knocks To ObtainDocuments ……
Search warrant or subpoenaor request by governmentagentEmployees notify executivesimmediately.Executives refer agent tocompany’s counsel
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Search Warrant
Search Warrant
Agents can seize original documents
Corporations do not have 5thamendment privilege
If agent demands copy of personalrecords – (5th Amendment)respectfully decline and refer tocounsel
Important to label documents
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If Search Warrant
Request copy of warrant and affidavit (may notbe available)
Accept warrant and immediately fax to counseland/or organization contact (i.e. general counselor compliance officer)
Send all employees (except essential responseteam or coordinator) away from work locationwhere search is taking place
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AND….
Search warrant authorizes agents to execute search at location
DO NOT INTERFEREWITH AGENTS AND AVOID CONFRONTATION
Review warrant carefully
Technically, agents can only seize what is listed on warrant
Bring to agent’s attention if search areas are not listed in warrant
List may include personal (5th Amendment) and corporate records andprivileged documents
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AND….
No requirement to speak to agents or respond toquestions
Respectfully decline & refer agent to counsel
Search warrant is for documents and E data whichcan be seized immediately but not testimonialevidence
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If Search Warrant (cont’d.)
Attempt to identify attorney/client privileged documents
Identify and determine agency of each investigator and theagent in charge and request contact information;government attorney assigned to case
Agents will request signature on a vague inventory of itemsseized – avoid execution of document
Keep your own inventory of areas searched, documentsand items seized and questions asked by the agents
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Post Search
Counsel typically requests debriefing from investigators and/orgovernment attorneys and addresses legal and search issues (i.e.privileged documents)
Consider public relations
Debrief employees and response coordinator/team – preparestatement with counsel
Attempt to obtain copies of documents seized through counsel
Notice and instruction to employees
Notice of investigation
Litigation hold and suspension of document destruction
Instruction regarding interaction with government agents
Specialized Federal Authority for ImmediateInspection and Search
Environmental Protection AgencyOccupational Health and Safety Agency
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Subpoena
Served by Mail or Personally by Agent
Does not Require Immediate Response
Typically Has Future Return Date
For Documents and/or Testimony
Turn Over to Counsel for Appropriate Response
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Subpoena
Prepare to assist counsel with response
Different types of subpoenas (Civil InvestigativeDemand, HIPAA Subpoena, IG Subpoena)
Complete and timely response is important
May negotiate scope and timing of response (i.e.Rolling production)
Custodian of records for response to subpoena
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What To do When TheGovernment Knocks tointerview You or Your
Employees
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Employee Rights
May decline to speak with Agents
May voluntarily speak to agents, but noobligation to do so
5th Amendment Right to Refuse
Ask Agent to contact Company Counsel – 6thAmendment Right to Counsel
Joint Defense Agreement – Share informationbetween employee and organization – stillprivileged
Company can advance $ for cost of employeecounsel (if necessary)
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Employee Rights(Cont’d.)
Right to be represented by counsel at interview
Organization’s Counsel can assist, but typically does not directlyrepresent Employees
Organization’s Counsel represents organization
Employee can retain their own counsel
Organization should not forbid Employee to speak to governmentagents
Obstruction of justice
Expect employees to advise if visited by government agents
Organization memorandum regarding investigation is advisable
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T H E E N D
QUESTIONS?
Doc # 4815 3276 2412