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February 29, 2016 Articles

International Forensic Investigations—Cultural Considerations

Part Two of a quick reference guide to differences when conducting investigations outside the United States

by Alexander Walther, Robert Gray, Melissa Ho, and Emma Cecil

Note: This is the second of a three-part series of summary articles from the American Bar Association (ABA) White Collar Crime Subcommittee that will address some of the key issues when offering forensic investigation services that arise in providing services to clients with international operations (or who may be considering an international expansion). Every country has its own unique culture, beliefs, and values. This article will provide a brief look into some of the key cultural issues that arise when conducting an international forensic investigation. The first article can be found here.

As more businesses including public and private companies find that they are required to conduct internal investigations, the number and complexity of internal investigations involving more than one jurisdiction have risen.

Handling internal investigations is a complicated enough matter when you are in familiar territory. Handling an investigation in a foreign country where language and cultural differences, at best, complicate fact gatherings or, at worse, hinder and obfuscate the issues can lead to exceptionally trying experiences.

Which Law Applies?
A country's underlying culture is typically the basis for that country's laws. As cultural norms and the resulting laws can vary greatly, corporate counsel should consider what jurisdictions are involved early in the planning of an investigation. It should not be presumed that United States law will apply until some conflict of laws analysis has been undertaken. American courts commonly invoke the "touching base" test, which provides that if communications touch base in the United States, then United States law will apply. See Golden Trade v. Lee Apparel Co., 143 F.R.D. 514, 520 (S.D.N.Y. 1992) (citing Duplan Corp. v. Deering Milliken Inc., 397 F. Supp. 1146 (D.S.C. 1975)). Otherwise, the United States court may apply the law of the jurisdiction that has the greatest interest in whether the communications are held to be confidential.

The ability to inform an employee that you are familiar with local laws and the limitations of the interviews (how it can be shared, transmitted, or maintained) will also ensure greater success in communication.

Attorney-Client Privilege Applicability and Concepts of Privacy
U.S. attorneys have been trained in the sanctity of the attorney-client privilege, and there is typically little difference between in-house attorneys and outside counsel. Concepts of privilege will differ from country to country. For instance, many foreign countries do not regard communications between in-house counsel and company employees to be privileged. See, e.g., Lisa J. Savitt and Felicia Leborgne Nowels, "Attorney-Client Privilege for In-House Counsel is Not Absolute in Foreign Jurisdictions". Existing European Union rules find that independent lawyers (and subsequent conversations with those lawyers) are privileged, but where an attorney is an in-house lawyer and paid by the same company, there is no privilege. In China, the courts will apply Chinese law to foreign lawyers practicing in China. This means that any legal advice given in China could arguably be disclosed. See "Attorney-Client Privilege: Extended to Foreign Lawyers in China?" China Law Insight, April 1, 2009. An additional area to consider is that there may be a cultural distrust of attorneys, or of foreign attorneys, in some countries. Understanding how local attorneys handle privileged communications and this possible cultural distrust will help define how you can approach an interview.

Data Privacy and Employee Privacy Considerations
Many countries have different views and standards on the protection of personal information. For example, the EU Data Protection Directive requires consent to use personal data and limits its transmission. The EU is not impressed with the level of safety U.S. companies have in place to safeguard personal information and there exists a tension between U.S. demands for production of documents and EU data protection laws. Employees are naturally concerned about the privacy of their employee files, and in some jurisdictions, the company may be required to provide the employee access to the information and give the employee an opportunity to correct any inaccuracies. (For example, in Norway, an employee has the right to be in the room with the attorney or investigator as they go through the employee's company email or company computer.) Additional consideration should be given to the laws and regulations surrounding the removal of evidence or data from a country. Some countries may have blocking statutes in place that impose civil and, in some cases, criminal sanctions for exporting documents or electronic data without going through the proper process (for example, the Hague Evidence Convention).

It is crucial to have a frank discussion about the attorney's understanding of local privacy law, as well as what the attorney expects from the employee with respect to confidentiality. Once the witness or employee is satisfied that they understand the confines of the interview, the hope is that the interview is a productive one.

Outside of data privacy, don't forget to be sensitive to local concepts of privacy. Not every country has a culture conducive to the socially acceptable "small-talk" in the U.S. Questions considered to be "ice-breakers" in the U.S. could be considered impermissibly intrusive. Some employees will believe that they have a right to refuse to answer questions about hobbies, workplace friendships, personal notes, documents, and emails based on sincerely held personal beliefs. Asking these types of questions without understanding the cultural norms of the country your investigation is in could lead to a non-responsive witness. This in turn could road-block your entire investigation (especially if the witness being interviewed is central to the investigation).

Maintaining Neutrality and Cultural Loyalties
Foreign attorneys, particularly those from the United States, can sometimes convey (unintentionally) an air of authority or judgment that will affect or color their interactions with local counsel, witnesses, and employees. It is important to remember the history of certain countries particularly those with a colonial past or a history of government suppression of free speech. Reference to potential prosecution or criminal law sanctions could be seen as threatening, rather than informative. Using neutral language in place of "whistleblower," "allegation," "suspicion," or "target" is useful to help emphasize the spirit of collaboration and cooperation.

Additional consideration should be given to the cultural loyalties that exist in each country. Loyalties differ by culture. For example, some employees may be hesitant to speak out against co-workers or superiors to a foreign attorney. Other countries may have a culture that is overly loyal to the employer. In some cultures, such as India, there may be a caste system that employees are hesitant to violate. Some of these obstacles can be overcome by including a local team member intimately familiar with the culture and language on the investigative team. Understanding cultural norms and word choice when conducting an interview can assist the reviewer in understanding the nuances of seemingly stilted answers.

Reminder on Movement of Documents
Documents protected under the attorney-client privilege may be subject to production in another jurisdiction if they are sent to that jurisdiction. While the United States will protect the privilege for electronic documents sent or stored in the "cloud," the laws in other countries (for example many developing countries or newly-industrialized countries) continue to be developed and it is not clear if the courts will respect the same privilege.

Before sending documents across borders, businesses and their counsel need to be aware of applicable state secrecy laws. China in particular has harsh penalties for state secrets violations. Due to the level of government involvement in China and the number of state owned enterprises, many documents and electronic data that the U.S. may not consider secret, could be viewed by Chinese authorities as being state secrets. As such, it is possible that someone could unknowingly violate Chinese law by removing documents or data without going through the proper channels. This could in turn lead to harsh civil and possibly criminal penalties (for your firm as well as for your employees conducting the investigation).

Knowing beforehand if there are reporting restrictions or restrictions on the movement of data will avoid difficult situations at the conclusion of the investigation (as well as avoid possible criminal prosecution of your employees).

General Tips
As a final take away in this installment, the following list highlights some best practices to address cultural and legal issues that commonly arise in international investigations.

  • Review local labor requirements, union representatives may need to be present.
  • Review the laws of privilege, employee rights, and data protection requirements in all jurisdictions potentially involved in the investigation prior to collecting documents and meeting with employees or witnesses in a foreign jurisdiction.
  • Involve local counsel to develop an understanding of local laws, customs, and culture.
  • Utilize outside counsel licensed in the local jurisdiction, if needed to preserve privilege claims.
  • Review conflicts of law principles with the client to obtain an understanding that more than one set of laws may apply.
  • Review restrictions and limitations on the movement of original and duplicate documents out of one country for transmittal to the next and analyze whether information could implicate a state secrets law.
  • Know where your company's / client's data is physically stored. If it is stored on a server outside of the U.S., you may need to comply with the laws and regulations in order to utilize the data in an investigation.
  • Documents that are signed by witnesses (for example a data collection consent form) should be in the witness's native language.

The final installment in this series will discuss critical issues to consider when building an international investigations team. That installment will provide you with tips on how to approach the staffing and performance of international investigations with a focus on what types of expertise are typically necessary, what tools exist to assist you, and what types of experts may be useful for your investigations team.

Keywords: commercial and business, litigation, international investigation, corporate investigation, forensic analysis, U.S. vs international investigation, culture differences

Copyright © 2016, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).