In a guide published in collaboration with the UK`s Serious Fraud Office, Winston partner Peter Crowther advises businesses on how to prepare for a raid and deal with the consequences. He notes that «the best preparation for a dawn crackdown is to ensure that compliance procedures are robust enough to avoid regulatory scope in the first place.» Even if a company has no reason to believe that it is guilty of wrongdoing, it could still take steps to prepare for possible repression in this era of increased law enforcement. Our Competition, EU and Trade Group offers help and support if your business experiences a dawn raid. Our in-depth understanding of the powers and procedures of the competent authorities and our extensive experience in dealing with such situations worldwide enable us to advise our clients on the practical and strategic issues that are crucial to the successful completion of such a case. Our lawyers can confidently deal with tense and difficult situations without harming regulatory relationships. Although perhaps little known, the Competition and Consumer Commission of Singapore (CCCS) has the authority under sections 64 and 65 of the Competition Act to conduct dawn raids. Indeed, CCCS is no stranger to using its powers to conduct unannounced inspections in antitrust investigations, including in the following cases: Bid Rigging for Pool and Other Aquatic Maintenance Services (2020), Exchange of Sensitive Business Information Between Competing Hotels (2019) and Price Fixing and Non-Competition Agreements by Fresh Chicken Distributors (2018). Each of these unannounced inspections resulted in infringement decisions against the parties involved and significant financial penalties. The above considerations to ensure adequate IT support and to observe inspectors at all times also apply in the context of a dawn raid as part of a CMA criminal investigation. The 2021 Future Ready Lawyer survey showed that 78% of law firms recognize the impact of transformative technologies. Kluwer Competition Law is a superior feature with a wealth of exclusive content.
The tool allows you to make more informed decisions, faster from any preferred location. As a competition lawyer, are you ready for the future? Find out how Kluwer Competition Law can help you. 1 The UK Government intends to strengthen its powers to search residential property at dawn by giving the Competition and Markets Authority the power to «seize and scrutinize» evidence when inspecting household premises pursuant to a search warrant. See para. 1.131 of the UK Government`s response to the consultation launched in July 2021 on the reform of competition and consumer policy, launched on 20 July 2021. It was released in April 2022. The «seizure and observation powers» allow the Autorité de la concurrence et des marchés to remove equipment from premises where it is impossible to decide on the spot whether it should be seized and then inspect it outside the premises. Currently, the CMA has only «seizure and observation powers» when inspecting business premises on the basis of an arrest warrant. 2 Keynote, GCR Live: Cartels 2022, Washington DC, April 5, 2022 3 Maria Jaspers said the European Commission had not made public the morning search of the residential areas in question in order to protect the privacy of the person concerned. 4 Case T-135/09, Nexans France SAS and Nexans SA v European Commission. 5 In all recent press releases on dawn searches, the European Commission notes that inspections «were carried out in accordance with all coronavirus-related health and safety protocols to ensure the safety of those involved.» 6 The Court of Justice of the European Union has confirmed that the European Commission may continue searches at dawn on the Authority`s premises by making copies during a search without first examining them on the spot (judgment of 16 July 2020 in Case C-606/18 P Nexans SA v European Commission). With this in mind, companies need to ensure that their dawn raid procedures are updated and adapt these procedures to reflect changes in dawn raid practices in the wake of the COVID-19 pandemic and the new reality of employees working from home.
CMA inspectors may search business premises as part of a CMA civil investigation on the basis of written authorization. Unless inspectors have also obtained a warrant for arrest from the High Court or the Competition Appeals Tribunal, they may not forcibly enter commercial or domestic premises. However, failure to allow inspectors access to business premises is punishable by fines and it is generally not advisable to refuse entry. Due to growing concerns about invasion of privacy in the event of dawn searches of residential buildings, competition authorities in Europe need an order from a national court to search a house at dawn. In order to obtain a court order, authorities must generally have reasonable grounds to suspect that business documents related to the purpose of the search are being kept in their homes at dawn. The reasons for the return of dawn raid are twofold: (i) there is a need to eliminate the backlog of planned inspections accumulated during the COVID-19 pandemic; and (ii) the authorities are investigating whether the current supply chain disruptions and rising costs of raw materials, shipping, and energy are due to possible violations of competition law. Still, not all inspections result in a breach being detected, and companies are better advised to review and update their raid processes and logs at dawn to better prepare for unexpected inspections. These recent raids and the announcement of new searches are a clear signal that competition authorities are stepping up their overall enforcement efforts after the «pause» caused by the pandemic. Indeed, the pace of searches is likely to increase as the Commission resolves a backlog of cases to be investigated. Competition authorities around the world can simultaneously coordinate and search for international offices. As authorities become increasingly active in investigating cartels and other antitrust violations, companies should consider steps they can take now to prepare for the next wave of enforcement.
In practice, at the time the CMA conducts a dawn raid, it may not be able to know whether it is likely to attempt to prosecute someone for the cartel`s crime. What will normally occur in such circumstances is that the CMA uses its civil search powers to enter and search the premises (see Section 2), but takes into account the possibility that the offence committed by the agreement has been committed and may subsequently initiate a parallel criminal investigation against individuals in addition to the civil investigation against the company. The Serious Fraud Office may also be involved in a parallel criminal investigation. A dawn raid is an unannounced inspection by a competition or criminal investigation service and has a significant impact on your business. This is often the first sign that authorities are investigating your business. This is evidenced by the recent coordinated activity of the European Commission and the UK Competition and Markets Authority against the automotive sector in March 2022. It was revealed that antitrust officials raided automakers at dawn suspected of colluding in the collection and recycling of discarded cars and vans. On 30 March 2022, Gazprom`s German premises were searched by EU officials (assisted by members of the German Federal Cartel Office).
The European Commission is investigating whether Gazprom has retained gas production that could be released at lower prices and why it has not filled its EU-operated storage facilities. Nor can it be ruled out that the Commission may examine whether Gazprom`s behaviour led to excessive gas prices. [1] The UK government is currently considering strengthening its powers with regard to dawn searches of residential buildings by giving the Competition and Markets Authority the power to «seize and scrutinize» evidence when inspecting residential buildings as part of a search warrant. This is part of the UK government`s open consultation on competition and consumer policy reform, launched in July 2021. The «seizure and observation powers» allow the Autorité de la concurrence et des marchés to remove equipment from premises where it is impossible to decide on the spot whether it should be seized and then inspect it outside the premises. Currently, the CMA has only «seizure and observation powers» when inspecting business premises on the basis of an arrest warrant. Our team has extensive expert experience in Dawn Raid procedures and will work with you to protect your rights. The Dawn raid services we offer are: In this context, the same restrictions apply to inspectors` powers to examine and copy documents as in the case of a raid by CMA inspectors as part of a CMA civilian investigation, i.e.: