Antitrust Dawn Raid - Australia - Global Compliance News

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Key Dawn Raid Principles

Key Dawn Raid Principles
1	Keep calm, be polite and ensure a cooperative atmosphere. You must provide reasonable assistance and facilities to enable the inspectors to execute the warrant.
2	Inform Legal Department (or Baker & McKenzie lawyers, if there is no Legal Department) immediately.
3	Ask, but do not insist that, the investigators wait in a separate room until Legal Department or Baker & McKenzie lawyers arrive.
4	Check the search warrant applies to the correct premises and time, make a copy and send to Legal Department and Baker & McKenzie lawyers. Also check the Inspector's ID card. If there is no valid search warrant, the ACCC cannot enter without permission.
5	Assemble the response and liaison team. The role of the response team will be to shadow investigators, ensure that staff do not destroy documents or otherwise obstruct investigators and maintain a written record of the search. While the response team can observe the search, they must not impede or hinder the search in any way.
5	Inform IT Department immediately. Ask IT to cooperate and provide access to IT equipment. The IT Department should supervise operations on the IT system and keep a note of the files being accessed, searches run, etc.
7	Brief staff at the earliest opportunity. Staff should be be made aware that an ACCC search is in progress. They should be reminded that under no circumstances should they destroy documents or information, they should provide reasonable assistance to the ACCC and they should keep the fact of and details of the search confidential.
8	Take care with questions from investigators. Staff are obliged to answer the ACCC's questions related to the warrant. They must be honest and cooperative but do not volunteer information. Ask for Legal Department or Baker & McKenzie lawyers to be present before answering any substantive questions, i.e., questions apart from organizational issues (e.g., where to find the office of a particular employee or the location of certain files, etc.).
9	Do not provide copies of legal advice or communications with legal advisors Baker & McKenzie lawyer. Try to agree a process upfront for handling and reviewing potentially privileged files. If investigators are taking large numbers of documents or electronic files, inform them that legal privilege has not been waived.
10	Request copies of material seized. Request copies of material seized by the ACCC, which copies must be provided as soon as practicable after seizure. The ACCC must also provide a receipt for all materials seized.
11	Coordinate an end of day meeting. Arrange to meet with the ACCC at the end of the day to determine what information is being seized or copied and to settle any outstanding issues concerning relevance and privilege.

Step-by-step guide

1	Keep calm, be polite and cooperative	Always stay polite and cooperative Do not obstruct the investigators
2	Inform Legal Department immediately	Immediately inform the Legal Department (or Baker & McKenzie lawyers if there is no Legal Department) Do not just leave a message. Continue calling until you have talked to someone Stay in touch with the Legal Department or the Baker & McKenzie lawyer until legal support has arrived
3	Take investigators to a separate room	Take the investigators to a room that does not contain documents or files Ask the investigators to wait for the arrival of the Legal Department or Baker & McKenzie lawyers in a meeting room If the investigators do not wish to wait, you must allow them to begin their search
4	Check warrant and investigators' ID card	Search warrant Ask to see the warrant and take a copy Check that the warrant applies to the correct premises and time and specifies the responsible ACCC Inspector Check that the warrant sets out the kind of evidential material and alleged contraventions ID cards Check that the Inspector is the person named in the warrant Check and record the names and position titles of each person executing the warrant If no search warrant… The ACCC cannot enter and search the premises without permission Do not grant permission unless you are instructed to do so by the Legal Department
5	Do not volunteer information	Do not volunteer any information Keep conversations to a minimum
6	Assemble the response team and shadow the investigators	The response team should include the most senior manager available, a senior internal and Baker & McKenzie lawyer, a senior IT specialist, and a note taker to keep a full record of all discussions with the ACCC and documents seized The role of the response team is to: shadow the investigators ensure that staff do not destroy documents or otherwise obstruct investigators maintain a written record of the search. The written record should include: name of the investigators involved time facts about the action taken by the investigators documents which have been reviewed parts of the premise which the investigator has visited or intends to visit While the response team can observe the search, they must not impede or hinder the search in any way
7	Contact and instruct IT	Contact IT Department Instruct IT to cooperate and provide access to IT equipment - including equipment outside premises not to delete any emails or electronic data to only respond to IT related questions and not to provide any information without being asked to mirror any IT data the investigators copy and/or seize and keep local copies to note the search terms used by the investigators Create a separate and detailed list of all seized and/or copied IT data and equipment Note, the ACCC can obtain an order from the court requiring a specific person with knowledge of a computer or computer system to provide assistance (including to access, transfer and/or convert data)
8	Search of documents and IT data	All employees must provide reasonable assistance and facilities to the investigators to enable them to conduct the search Note which documents the investigators request In the event that the investigators intend to seize documents or data, ask the investigators to make copies of the documents or the data In the event that the investigators intend to photocopy documents, arrange for an employee to be responsible for photocopying documents. Keep a second set of photocopies of the documents for your own records Create a separate and detailed list of all seized and/or photocopied documents The ACCC must provide a receipt for any things that are seized
9	Answering questions	Take care with questions from investigators Employees are obliged to answer the ACCC's questions related to the warrant - the investigators cannot undertake a general interview of employees present Employees should be honest and cooperative but do not volunteer information Where investigators seek to ask any substantive questions (i.e., questions apart from organizational issues (e.g., where to find the room office of a particular employee or the location of certain files respective person, etc.), request that a lawyer is present If in doubt, contact the Legal Department (or Baker & McKenzie lawyer) for assistance Note, employees cannot refuse to answer a question on the basis that it may incriminate them
10	Legally privileged documents	The ACCC does not have the power to search and seize legally privileged documents and files If the investigators seek access to documents or files that may contain legally privileged communications: inform the investigators that the documents or files may contain privileged documents privilege is not waived request the opportunity to pre-check the documents for legal privilege If the investigators are taking or searching large numbers of documents or electronic files, inform the investigators that the material may contain privileged documents and that privilege has not been waived The Legal Department or Baker & McKenzie lawyers should make arrangements with the ACCC to put in place a regime for dealing with privilege claims If in doubt about whether a document may be privileged, consult with the Legal Department or Baker & McKenzie lawyers
11	Brief staff at the earliest convenient opportunity	Staff at the premises being searched should be made aware that an ACCC search is in progress Staff should be reminded that: under no circumstances should they destroy documents or information they should provide reasonable assistance to the ACCC they should keep the fact of and details of the search confidential
12	Confidentialiy	Do not publicise the ongoing investigations to anyone outside the company under any circumstances
13	Organize a final discussion with the investigators	At the end of the search, arrange to meet with the ACCC to determine what documents are files are being seized or copied and to settle any outstanding issues concerning relevance and privilege
14	Organize an internal meeting	Arrange an internal meeting with legal representatives to discuss next steps and strategy for dealing with the investigation
15	Prepare a precise and concise report	The Legal Department or Baker & McKenzie lawyers should consolidate the notes taken during the search and prepare and review a report of the search, which should include: list of all questions posed by investigators during the course of the investigation list of all documents and other things which have been seized list of all documents or files that have been copied by the investigators
16	Additional steps	Suspend any routine document destruction policy and prevent electronic documents from being deleted Consult with Baker & McKenzie lawyers on further steps that should be taken, including in relation to any individual employees who may be the target of the investigation

Frequently Asked Questions

NO.	QUESTIONS	AUSTRALIA
A. COMPETITION LEGISLATION, REGULATOR AND PENALTIES
1	What is the key competition legislation?	Competition and Consumer Act 2010 (CCA)
2	What is prohibited?	1. Cartel conduct and other anti-competitive agreements 2. Resale price maintenance 3. Anti-competitive exclusive dealing
3	Who is the primary competition regulator?	Australian Competition and Commission (ACCC)
4	Which regulator will conduct competition dawn raids?	The ACCC. The ACCC may be assisted by the Australian Federal Police, as well as IT consultants.
5	What are the relevant penalties for anti-competitive conduct?	The maximum penalties for a corporation that has contravened the prohibitions against anti-competitive conduct in the CCA are, per contravention, the greater of AUD10 million or three times the value of the benefit gained from the anti-competitive conduct (or, if that not be determined, 10% of annual group turnover in Australia in the preceding 12 months). The maximum penalties for individuals who contravene or are involved in a contravention of the CCA are AUD500,000 per breach. For contravention of the criminal cartel provisions, individuals can be imprisoned for up to 10 years.
6	What are the penalties for obstructing investigations?	Obstruction of a search, including failure to provide reasonable assistance or refusing to answer questions, is a criminal offense. Penalties include fines as well as imprisonment for up to 12 months.
7	Is there a leniency regime and what does it provide?	Yes. The ACCC has an Immunity and Cooperation Policy for Cartel Conduct. The Prosecution Policy of the Commonwealth includes a specific section covering immunity for criminal cartel conduct. This is essentially in the same terms as the ACCC’s Immunity Policy. In addition, the ACCC also has a Cooperation Policy for Enforcement Matters, which sets out the ACCC’s position in relation to immunity and leniency applications resulting from cooperation in ACCC enforcement matters more generally. The Cooperation Policy applies to all anti‑competitive conduct in contravention of the CCA.
B. DAWN RAID SEARCH POWERS
8	When can the regulator conduct a raid?	The ACCC can apply to a magistrate for a warrant in relation to premises. A magistrate may issue the warrant if the magistrate is satisfied by information by the ACCC that there is evidential material on the premises, i.e. a document or thing that may afford evidence relating to a contravention of the CCA (or certain other legislation).
9	Does the regulator require a warrant before it can conduct a raid?	Yes. The ACCC may also conduct a search if the occupier of the premises consents to the search.
10	Can the regulator's officers be made to wait for the company's legal counsel before commencing a raid?	The ACCC has no obligation to wait for legal counsel to arrive before proceeding with its investigation. The ACCC may agree in its discretion to wait for legal counsel.
11	What powers of search does the regulator have during a raid?	A search warrant authorises the executing officer to: enter the premises; search the premises for the kind of evidential material specified in the warrants, and seize things of that kind found on the premises; make copies of the kind of evidential material specified in the warrant found on the premises; operate electronic equipment at the premises to see whether the kind of evidential materials specified in the warrant is accessible by doing so; take equipment and material on to the premises and use it for any of the above purposes; take photos and videos of anything at the premises for a purpose incidental to the execution of the warrant.
12	Can officers demand passwords to allow access to computers, servers, files etc.?	There is a general obligation to provide reasonable facilities and assistance, and to answer questions relating to the execution of the warrant. This would include providing passwords and other assistance to facilitate inspection of electronic files. An executing officer can obtain an order from the court requiring a person with knowledge of a computer or computer system to provide assistance (including to access, transfer and/or convert data). The specified person must be a person who is reasonably suspected of having committed the contravention stated in the search warrant, the owner or lessee of the computer, or an employee of the owner or lessee of the computer.
13	Can employees leave the premises (taking laptops and other devices) during a raid?	No. This is likely to be seen as obstruction. Permission would be needed for anyone to leave and they would also need permission to take laptops etc.
C. REGULATORS' RIGHTS TO SEIZE AND RETAIN INFORMATION
14	Do officers have powers to seize documents and information during a raid?	Yes.
15	Do officers have powers to retain documents and information. If so, for how long?	In relation to things that have been seized (as opposed to copies of documents and files), those things must be returned within 120 days, subject to any contrary order of a court.
16	Can the officers secure documents and information, and prohibit access to them?	If an executing officer reasonably believes that expert assistance is required to operate equipment that may provide access to the kind of evidential material specified in the warrant, and that the material may be destroyed, altered or otherwise interfered with if no action is taken, then the executing officer may do "whatever is necessary" to secure the equipment (including locking it up and/or placing a guard) for up to 24 hours. Note, generally, if the executing officer (and those assisting) leave the premises and cease execution of the warrant for more than one hour, they cannot return and continue exercising their powers under the warrant without the occupier's consent (unless there is an emergency situation).
D. EMPLOYEES: REGULATORS' RIGHTS TO QUESTION AND SEARCH PERSONAL PREMISES AND PROPERTY
17	Can officers question employees?	The ACCC may require a person at the premises being raided to answer questions to which the warrant relates. Only questions related to the warrant must be answered, not general questions about the business.
18	If employees can be questioned, can you insist on the presence of a lawyer before employees are questioned?	Generally, no. The ACCC may agree to wait until a lawyer is present before asking questions, but they are not prohibited from asking questions in the absence of a legal representative.
19	If employees can be questioned, is there a right not to answer questions by claiming privilege against self-incrimination?	Employees are not excused from answering questions or producing evidential material on the grounds of self-incrimination. Therefore employees must answer any relevant question, even if the answer may tend to incriminate them. However, any such answer is generally not admissible in evidence against the individual in criminal proceedings.
20	Can the officers search employees' homes or access their personal mobile phones or laptops?	Yes. A warrant can be issued for domestic premises as well as business premises. Things found at the premises may be seized and removed if they fall within the kind of evidential material identified in the search warrant.
E. LEGAL PRIVILEGE: IS THERE A RIGHT TO WITHHOLD INFORMATION?
21	What is covered by legal privilege?	Legal professional privilege attaches to confidential communications between a legal adviser and client (or in some circumstances between one of those and a third party) if those communications were made for the dominant purpose of enabling the client to obtain, or the lawyer to give, legal advice, or litigation that is actually taking place or reasonably anticipated at the time the communication was made. Legal privilege can extend to communications with in-house counsel and foreign lawyers.
22	Can privileged documents be withheld?	Yes. The ACCC does not have the power to require the production of legally privileged documents. If the occupier believes that particular documents may be privileged, they should ask the executing officer to place the documents in a sealed envelope pending resolution of the privilege claim. Where the ACCC is searching or seizing large numbers of documents that may contain privileged communications, it should be made clear that privilege is not waived and a protocol put in place for dealing with any privilege claims.