Conducting Cross-Border International Internal Investigations Association of Corporate Counsel International Legal Affairs Committee Jeffrey D. Clark Willkie Farr & Gallagher December 10, 2009

-2- Trend Toward International Internal Investigations Corporate internal investigations are no longer a U.S. phenomenon  As businesses globalize, so too do the legal issues they face and the need to investigate and ensure compliance around the world  The presence of employees, documents, and issues in different countries necessitates a cross-border approach to internal investigations Non-U.S. enforcement authorities now recognize, and may expect or reward, internal investigations and voluntary disclosures  Siemens (2008) – Coordinated prosecution by U.S. and German authorities; based largely on the company’s internal investigation and voluntary disclosures  Mabey & Johnson (2009) – First U.K. prosecution of transnational bribery; resulted from a voluntary disclosure to the Serious Fraud Office

-3- Planning an International Internal Investigation Careful preparation and planning are key to the success of any internal investigation Important issues to consider when planning a cross-border investigation  Local labor and employment laws  Data privacy laws  Protecting attorney-client privilege  Potential cooperation with and/or voluntary disclosure to relevant enforcement authorities in different countries

-4- Labor and Employment Laws The primary goal of an internal investigation is to allow a company to collect relevant facts and information about potentially improper conduct by company officers, employees, and/or third-party representatives  It is vital that the information uncovered during an investigation is full, complete, and accurate  This information can only be collected with the cooperation and assistance of local management and employees Before beginning an international investigation it is important to consider local labor and employment laws and any restrictions they place on the investigation

-5- Labor and Employment Laws (cont.) In particular, you may need to consider  Consulting/notifying local works councils and/or labor unions  Consulting with local employment counsel regarding steps that may be taken in interviews to protect employee rights, including: – providing employees with formal written notification of interviews; – conducting interviews in the employee’s native language or making an interpreter available; – allowing employees to invite another employee or member of the works council to be present and observe the interview; and/or – allowing an employee to invite his/her personal lawyer to attend the interview

-6- Data Privacy Laws Applicable restrictions on the collection and processing of data (i.e. information) as well as the transfer of data across national borders need to be considered when conducting cross-border investigations The EU Directives require EU countries to enact strong data privacy protections Some countries outside of Europe also have strong data privacy regulation (e.g., Canada, Argentina, Singapore, Dubai) Different jurisdictions take different approaches – this is particularly evident when comparing the data privacy regimes of the U.S. and the E.U.  Broad definition of personal data  Rights of the company versus rights of the employees Blocking statutes also create restrictions on the transfer of data across borders by prohibiting the collection and communication of certain types of data to a foreign governmental entity or for use in a foreign judicial proceeding  E.g., French blocking statute is very broad and potentially prohibits disclosure of any business-related information outside of France, where that information may be disclosed to foreign authorities or used in U.S. litigation

-7- Protecting Privilege Investigative team should take steps to protect the company’s U.S. attorney- client privilege and work product protection, including:  Beginning interviews with an Upjohn warning  Clearly marking all attorney written work product as such  Limiting distribution of privileged information Important to consider how investigative choices may affect the company’s future ability to protect attorney-client communications and attorney work product  For example, communications with in-house lawyers and internal auditors are not protected as privileged in some countries  Thus, a company may want to consider whether to include in-house lawyers or auditors in investigative interviews Privilege considerations may not be determinative, but they should be identified and considered in the planning stages of an investigation

-8- Cooperating with Enforcement Authorities Voluntary disclosures are common in the U.S. and becoming more common in Europe Why voluntarily disclose?  Possible advantages of voluntary disclosure – Company can place misconduct in best light and assert defences – May persuade government to forego a formal investigation, particularly in conjunction with remedial action – If an enforcement action is brought, voluntary disclosure may result in more lenient penalties  Possible disadvantages – May alert authorities to possible wrongdoing and lead to criminal prosecution – Possible waiver of privileges – Adverse publicity Need to assess the information uncovered during an investigation  Did the company and/or its employees violate applicable laws?  If so, can the violations be appropriately addressed and future violations prevented without involving enforcement authorities? Will the conduct likely come to the attention of enforcement authorities anyway?

-9- Cooperating with Enforcement Authorities If disclosure is considered, which authority or authorities should be approached?  Need to assume that enforcement agencies will share information and consider the likelihood of investigation/prosecution in multiple jurisdictions  Companies may want to time disclosures to multiple jurisdictions such that they are simultaneous or nearly simultaneous – The U.K.’s Serious Fraud Office’s newly-released guidelines to dealing with overseas corruption specifically state that, where a case falls within its jurisdiction, the SFO should be notified at the same time as the US DOJ Regardless of ultimate decision on disclosure, need to conduct investigation assuming that disclosure may be necessary  Need to make sure that investigative efforts would be viewed as credible by U.S. or other enforcement authorities  Be prepared for potential data privacy and privilege effects of a voluntary disclosure

-10- Questions? Jeffrey D. Clark Willkie Farr & Gallagher LLP 1875 K Street, N.W. Washington, D.C (202) 303 – 1000