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An unannounced inspection by a competition or criminal investigatory authority can cause major disruption to a business. According to recent news reports Irish subsidiaries of UK companies can expect more of these kind of raids following Brexit. So what can you do and what powers do they have?.

Certain authorities have the power to carry out unannounced inspections on business or domestic premises, called dawn raids. The Competition and Markets Authority (CMA) has the power to investigate breaches of UK or EU competition law, and the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) can carry out investigations in relation to breaches of financial services regulation.

What can they do?
FCA and PRA CMA
What can they do without a warrant? Serve a statutory document request
  • Require the production of documents relevant to the investigation
  • Require a person to state where a document may be found
  • Require any information stored in electronic format to be produced in a readable format
  • Take reasonable steps to prevent interference with documents
  • Require individuals connected with the business under investigation to answer questions on any matter relating to the investigation
What can they do with a warrant?
  • Enter the premises
  • Search the premises
  • Take possession of documents or information
  • Take copies or extracts from documents
  • Require any person on the premises to provide an explanation of a document or information
  • Use reasonable force where necessary
ALL of the above plus:
  • Use reasonable force to obtain entry
  • Search the premises
  • Seize original documents
  • Copy the entire hard disk of a computer
  • Carry out an investigation on a domestic premises
Penalties for non-compliance or obstruction
  • Failing to comply could result in unlimited fines
  • Criminal sanctions for contempt of court or obstructing exercise of rights conferred by a warrant
  • Administrative penalties can be a fixed penalty (£30,000) and a daily fine (£15,000)
  • Criminal penalties can be punishable by fines or up to 2 years imprisonment
What Should you do?

Check the warrant

Check whether there is a warrant, if there is then check the scope of the investigation carefully. Take copies of relevant authorisations and send to senior management, legal and compliance to alert them of the investigation.

Meeting room

Show the investigators into a meeting room and ask them to wait, they should allow a reasonable amount of time (up to 30 minutes) for legal representatives to arrive before proceeding if there are none on site. The meeting room should be away from central areas and common work areas.

Inform staff

Let members of staff know that there is an investigation and remind them not to tamper with any documents during the investigation or with the investigation itself.

During the raid

Ensure the inspectors are shadowed at all times (preferably by a member of senior management, legal and IT), make a copy of all documents copied and keep a record of all questions asked and the answers given.

Remember litigation privilege and confidentiality

Anything covered by litigation privilege does not need to be surrendered and anything that is confidential should be marked as such.

Follow up

Hold meetings to determine any follow up actions and potentially whether to make a leniency application if there is any evidence of infringement.

Companies are advised to have a Dawn Raid Policy in place and ensure that all members of staff are familiar with it.

2019-EC3-0005

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