Best Practices

4 Unique Challenges to Cross-Border Investigations (Part 1)

Having offices spread around the globe may indicate a strong international company, but conducting frequent business across jurisdictions also raises complications in terms of compliance. More and more companies are learning that, when internal investigations cross borders, they present specific difficulties that must be addressed by the compliance team.

In this two-part blog series, we explore the rise of these cross-border investigations, the unique challenges they represent and six steps for more effective investigations.

Cross-Border Investigations on The Rise

Internal investigations that cross international borders are increasingly common, and not only for multinational companies based in the United States. “Internal investigations have now become routine among companies based in Australia, Canada, England and other common-law jurisdictions that have adopted American-style investigatory practices,” according to a report by law firm K&L Gates. In fact, increases in international criminal and civil enforcement, according to the report, have helped to convince such multinationals “of the need to do thorough border-crossing internal investigations.”

While crossing borders presents unique obstacles and require special tactics, the principles and purposes of internal investigations remain the same. A good investigation should gather all of the relevant documentation, as well as truthful witness statements that can be used as evidence.

Investigations may be conducted for the purposes of:

  • Finding weak spots in a company before an incident takes place that could result in liability; and
  • Gaining detailed knowledge about misconduct that has already been identified (either by the company itself or by the government).

Being proactive about addressing potential misconduct across borders may ultimately give you greater control over how incidents are handled. And, while you can’t stop the government from investigating a compliance issue, properly conducted internal investigations can demonstrate good faith which, under specific circumstances, could lead authorities to refrain from prosecuting a company for violations.

4 Unique Challenges for Cross-Border Investigations

Compliance professionals face unique obstacles in cross-border investigations. The first of these challenges has to do with coordination and communication; the remaining three are legal challenges.

  • Challenge #1: Communication problems that arise from trying to coordinate investigation efforts across cultures, languages and international borders. You’re likely to have different people responsible for doing investigations, working in different offices or countries and using different languages.
  • Challenge #2: Differences in laws governing the client-attorney privilege. For example, the UK system is to some extent similar to the US in regards to privilege, but there are significant differences between the US, the UK and other EU member states.
  • Challenge #3: Differences in employee’s rights and/or labor laws. In the US, employees must cooperate with internal investigations, but in many countries, they have the right to refuse cooperation.
  • Challenge #4: Differences in data protection laws that may apply to your employee’s data. In China, for example, there is very strict protection of “state secrets,” but the definition of this term is unclear.

In Part 2 of this blog series, we’ll cover six steps your compliance team can take to address these challenges and improve the effectiveness of internal investigations.

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