US: RISK THAT “OUTSOURCED” CRIMINAL INVESTIGATIONS MIGHT VIOLATE FOREIGN BLOCKING STATUTES

A blog post from the New York University School of Law comments on a ruling from of the United States District Court for the Southern District of New York.  This is said to have significant implications for the conduct of corporate internal investigations by outside law firms in the US.  If there is “extensive coordination” between lawyers conducting a corporate investigation and the prosecutor’s office with whom they are in discussions or negotiations, the lawyers’ acts are “fairly attributable to the government”, and so those providing any information have been compelled to do so, and hence any such evidence cannot be used against them (as this would seem to violate their right against self-incrimination).  However, the post highlights another potential aspect involving so-called “blocking statutes” of other countries.  It explains that the term is used as a general description of laws that attempt to impose territorial sovereignty over access to information (including witness testimony) by prohibiting or limiting the international transfer of information gathered locally for use by a foreign government, and could render the lawyers involved to prosecution in their other country.  The post says that the best/worst example is found in French law, and provides that anyone located in France or of French nationality who transfers information of potential economic significance outside of France for use in a “judicial or administrative proceeding” commits a crime, unless the transfer is conducted pursuant to a bilateral or international agreement to which France is a party – though the US Supreme Court had rejected this as a defence against use of the information.

https://wp.nyu.edu/compliance_enforcement/2019/11/06/united-states-v-connolly-and-the-risk-that-outsourced-criminal-investigations-might-violate-foreign-blocking-statutes/

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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