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Cross-Border Investigations: Evolving Challenges and Risks


Brian O’Bleness

Matthew A. Lafferman

Dentons US

With cross-border investigations becoming more prevalent and involving larger penalties, greater disgorgement and other serious financial consequences, a thoughtful approach to cross-border investigations has never been more important. This article discusses recent developments related to cross-border investigations, as well as common risks and challenges, and identifies risk mitigation approaches and solutions to these issues.

I.Increased Cooperation and Other New Developments Likely Will Cause More Cross-Border Investigations

A recent steady increase in international cooperation has caused a corresponding rise in cross-border matters. Existing legal processes for sharing information have expanded. For example, formal information sharing agreements among enforcement authorities within and outside the US have multiplied. In addition, global enforcement authorities are cooperating informally more often. Finally, there is more coordination among global enforcement authorities, especially during resolution. Unsurprisingly, these developments have resulted in broader and more frequent enforcement actions involving more than one government. In the last two years alone, there have been several massive global settlements each involving more than one billion US dollars in total penalties, as compared with a decade ago when such settlements were rare.

Three developments likely will result in the continued expansion of cross-border enforcement:

First, new players have entered the action, including new enforcement agencies like South Korea’s Corruption Investigation Office for High-Ranking Officials. These new enforcement authorities will increase legal scrutiny of cross-border matters within their own jurisdictions. Additionally, existing players have announced new enforcement priorities. One example is the US Commodities Futures Trading Commission (CFTC) announcing a new enforcement priority focused on “foreign corrupt practices” and increasing its involvement in cross-border matters.

Second, the United States has adopted new enforcement tools. New laws, like the Clarifying Lawful Use of Data Act (or CLOUD Act), the Anti-Money Laundering Act of 2020 and an extended statute of limitations for certain types of disgorgement imposed by the Securities and Exchange Commission (SEC), add various powers to an already large enforcement toolbox.

Third, anti-corruption laws are expanding around the world. These include new laws in countries with less history of combatting corruption, expanding liability to new entities, and new enforcement mechanisms and tools to fight bribery and other types of corruption.

II.Common Risks and Challenges That Arise in Cross-Border Investigations

There is a slew of practical and substantive challenges that arise in the course of a cross-border investigation.

The Role and Application of Local Law and Customs. Understanding local laws, cultures and languages is essential to conducting an effective cross-border investigation. Local terminology for corruption or bribes has sometimes helped reveal conduct and in other cases cleared up confusion or mistakes. For example, knowledge of local language and slang will assist companies in tracking and identifying issues. For instance, the word propina in Brazil (“a tip”) may indicate an improper payment. Knowledge of local law and culture can help investigators quickly identity whether business practices or conduct is problematic or benign.

Data Protection and Privacy Laws. Investigations usually require the collection of information that would be categorized as “personal data”—like a name, contact information and work duties—and that may be protected under the applicable law. In cross-border investigations, this data is often stored in various jurisdictions and devices, implicating local data protection laws that have different and potentially significant parameters and exceptions.

Ephemeral and Personal Messaging Applications. Although not widespread in the United States, these applications are becoming increasingly common abroad, and some are considered essential to conduct international business. The widespread use of these applications poses a particular challenge for US companies operating internationally, in part because of their ephemeral features and in part because the data may only be stored on the user’s phone.

Protecting and Preserving Privilege. Different jurisdictions adopt different standards and afford varying protections for privileged material. Many jurisdictions do not recognize the robust attorney privileges under US law. In such cases, foreign authorities may seize privileged communications, which in turn could waive claims of privilege in the US. The storage of information in a jurisdiction that protects privilege can prevent disclosure and satisfy ethical obligations that require the protection of privilege.

Follow-On Prosecutions. There are numerous examples of an enforcement agency opening or re-opening an investigation after another jurisdiction has publicly released the settlement terms of a cross-border matter.

III.Risk Mitigation Approaches and Solutions

Adopting certain approaches prior to or at the onset of an investigation can help address these issues before they balloon into significant challenges.

If possible, entities should ensure that they take a risk-based compliance approach prior to starting an investigation. A truly global and effective compliance program will account for various and sometimes competing obligations under different countries’ anti-bribery laws. Such programs should also be able to help detect issues prior to their occurrence.

If an investigation arises nonetheless, companies should anticipate various steps. From the outset, the investigation should be mapped out to determine which enforcement agencies have jurisdiction and could potentially open their own inquiry upon disclosure. The scope of an investigation often changes course, and it is critical to be open about such strategic changes.

Companies should educate themselves on the jurisdictional limits of the enforcement agencies involved. Courts, notably in the US and the United Kingdom, have set limits to the extraterritorial jurisdiction of enforcement authorities. There also has been an increase in blocking statutes abroad, which could play a key role in strategy. One notable example is the new statute in China that establishes a blocking regime.

After understanding any global limitations, including extraterritorial reach, companies should consider local legal and cultural issues from the perspective of those within the local communities. This exercise is essential in any cross-border investigation. Local laws, like data privacy, should be analyzed at the outset of the investigation. When possible, local attorneys and native-language interpreters should be engaged. Local attorneys know the ins and outs of local law, can help identify and navigate potential legal defenses and can quickly identify abnormal or unusual business practices.

In preparing for possible self-disclosure, it is essential to understand the contours of any cooperation credit policy offered by the relevant enforcement authorities, and the company’s obligations if such credit is sought. Companies should be aware of overlapping or contradictory policies and different enforcement priorities among countries, as well as any recent changes or updates. Tensions between applicable enforcement regimes need to be addressed and anticipated at the outset of the investigation as they will affect strategy and approach. The decision to disclose to the authorities is often a decision to disclose to the world. Notably, US enforcement agencies do not provide any credit for voluntary disclosure in a foreign jurisdiction. As a result, the decision to disclose should involve a thorough analysis of the advantages and disadvantages before any disclosure is made in any jurisdiction.

For more information on cross-border investigation, check out Brian and Matt’s Cross-Border Investigations: Evolving Challenges and Risks program, available from PLI Programs On Demand.


Brian O’Bleness is Co-Chair of the US Competition and Antitrust group and a member of Dentons' White Collar and Government Investigations practice, focusing on global internal investigations, antitrust matters, and defending clients against government enforcement actions. Brian is dual-qualified as a lawyer in the US and a solicitor in England and Wales, and is a frequent speaker on global legal risk and remediation.

Matthew A. Lafferman is a member of Dentons' Litigation and Dispute Resolution practice and White Collar and Government Investigations practice. He assists US and foreign multinational companies, executives and management in conducting complex cross-border investigations and defending related enforcement actions. He also advises both domestic and foreign companies on a variety of cross-border legal matters, such as data privacy laws, the Stored Communication Act and the related CLOUD Act.


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