Spotlight On...

Contact: Phil Ostwalt Partner

Tel: +1 404-222-3327 Email: postwalt@kpmg.com

and managing investigations for their company. Our survey respondents cited their top three challenges when conducting a cross-border investigation as privacy and information issues, lack of internal investigation resources, and cultural differences.

Preserving and collecting information

relevant to an investigation is one of the most important steps in the investigative process. Foreign data privacy laws and regulations pose some of the greatest challenges to conducting cross-border investigations because of restrictions on the kinds of data that can be collected and transferred out of the jurisdiction. Many countries have enacted laws that place a high priority on protecting personal data, including establishing a fundamental legal right on the privacy of personal data, even if such data are contained on an employer’s system or computer.

The need to conduct an investigation is not predictable. Therefore, having trained internal resources

ready to

deploy on short notice is unlikely. Cross- border investigations oftentimes require specialized staffing that necessitates proactive planning. Companies

can

address gaps in resources by developing contingency plans for investigative personnel, such as designating experienced internal people from other regions to respond if necessary, and retaining outside local investigators to be on call when a situation arises.

Finally, cultural differences also underlie cross-border investigations and can create significant problems if investigators do not understand

and respect these

differences. A colleague of mine, Shelley Hayes who leads our

Mexico practice summed it up well when she said “In cross-border investigations, it is important to understand the traditional culture that is driving how people think, act, and react, and how the person conducting the investigation is being perceived. What may be acceptable to say or do in one culture may totally offend someone from another culture.”

Q

How can these challenges be overcome?

I believe that companies are served well to develop a set of investigation protocols that essentially will serve as a game plan, and allow for consistent practices when a need occurs for an investigation. Unfortunately, many companies have not developed them. More than half of those who responded to KPMG’s survey said that their companies have limited or no protocols for cross- border investigations.

One reason for protocols is that allegations will vary in substance,

severity, and

priority. Therefore, a company should have a detailed procedure or protocol that outlines which department or individuals will bear responsibility for overseeing the investigation. A proper set of investigation protocols will also need to include not only the planned procedures, but also the channels of communications that should occur during the course of the investigation.

Q

In what ways can companies strengthen their investigative

activity?

I have noticed a decrease in organizations providing any level of training with their internal investigative resources to prepare them for the unique aspects that will be

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present in a cross-border investigation. Our survey findings also revealed the same with thirty-five percent of respondents in KPMG’s survey saying that their companies conduct investigations training each year. This is down from nearly 80% in a prior survey, and reflective of decreased training budgets in many organizations. To be well prepared, companies

with

global operations should proactively train employees about investigation protocols in different jurisdictions so that they can respond quickly. Trying to educate local resources after an allegation has been received may lead to delays that can sidetrack an investigation.

Q

Is there anything else you would like to add?

The often overlooked aspects of an investigation are the steps that a company should take to remediate once the fact finding stage of a cross-border investigation is complete.

Companies will often need

to remediate any issues identified, which could include correcting books

and

records, fixing control weaknesses, and disciplining employees. Taking remedial action can be an important determinant by regulators, both domestic and foreign, in deciding to charge a company with a violation of a law or to reduce the size of a criminal fine or penalty that might be assessed.