Comparative Guides

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4. Results: Answers
Cartels
4.
Investigations – step by step
4.1
What initial steps do the enforcement authorities take to commence a cartel investigation?
United States

Answer ... The Antitrust Division of the Department of Justice (DOJ) may identify cartel conduct through a variety of sources, including leniency applications, its own investigations or referrals from other national or foreign government agencies. The DOJ’s own investigations can include electronic surveillance and the exercise of search warrants.

After the DOJ identifies evidence of potential criminal conduct, it will open a grand jury investigation. An early step in the grand jury process is the issuance of subpoenas to companies and individuals who are subject to the investigation.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.2
Are dawn raids commonly conducted in your jurisdiction? If so, what are the pre-conditions for conducting a dawn raid? When, where and by whom are they conducted? Do the enforcement authorities have the power to search private as well as company premises?
United States

Answer ... The DOJ can conduct dawn raids of corporate or individual premises. Before doing so, it must obtain a court-issued search warrant. To obtain a search warrant, the DOJ must demonstrate to a federal judge that there is adequate evidence of criminal conduct on the premises it intends to search. Once a search warrant has been issued, the search is conducted by the DOJ in conjunction with the Federal Bureau of Investigation (FBI).

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.3
What powers do officers have during the dawn raid? Are there any limitations on these powers?
United States

Answer ... The agents conducting the search are confined by the terms of the court-issued search warrant. The search warrant should clearly identify the premises to be searched, the evidence to be seized and the timeframe in which the search may occur.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.4
What are the rights and obligations of the target company and any individuals targeted during a dawn raid?
United States

Answer ... A company and any individual targeted by a search warrant can request to see the government agents’ identification and may also request a copy of the search warrant. Company personnel may be present for the duration of the search and may request an inventory of items seized in the raid. However, they cannot interfere with the search and seizure of evidence authorized by the warrant. Individuals who interfere with the execution of a search warrant, including by hiding or destroying evidence or by lying to government agents, can be subject to criminal prosecution under obstruction of justice and related laws.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.5
What evidence can be seized during a dawn raid? Do the enforcement authorities have the power to interview witnesses and take statements during a dawn raid?
United States

Answer ... Government agents exercising a search warrant may confiscate documents, computers and other physical evidence. They can also access and copy electronic files. Government agents may also seek to interview witnesses, although the witnesses are not required to answer the agents’ questions.

A common tool used during dawn raids is to send simultaneously FBI agents to the homes of relevant employees or executives to question them about their involvement in, or knowledge of, the conduct under investigation. As with interviews during the execution of a search warrant, the individuals are not required to answer the agents’ questions, but may be subject to prosecution if they lie to the agents.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.6
How can a company best prepare itself for dawn raids? What best practices should it follow in the event of a dawn raid?
United States

Answer ... Companies can prepare for dawn raids by creating a raid response plan, including designating individuals responsible for managing the response. The response plan should include contacting counsel who can be available to assist in the response and provide related legal advice to the company as soon as possible. Companies should also educate their personnel on how to respond to a raid, including explaining their rights and obligations in the event of a raid.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.7
What are the next steps in the cartel investigation following a dawn raid? What timeframe do these typically follow?
United States

Answer ... The next steps will vary between investigations. As a general matter, the DOJ is likely to follow the raid by reviewing the evidence collected and using the evidence to formulate its strategy for the remainder of the investigation. For example, the DOJ may expand the scope of the investigation if it identifies evidence of additional wrongdoing. Companies subject to a dawn raid are generally well advised to conduct their own internal investigation following the raid, and to engage with the DOJ to understand the scope of the investigation and seek copies of the materials collected during the raid.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.8
What factors will the enforcement authorities consider in assessing whether cartel activity has taken place?
United States

Answer ... The primary factor is the evidence. In assessing whether cartel activity has taken place, the DOJ will review the evidence, which can include documents and witness testimony. The DOJ will also place significant weight on any admissions of a violation provided by a leniency applicant. During the course of an investigation, the DOJ will also hear presentations from counsel, which may argue that the evidence does not amount to a violation or may seek to narrow the scope of a violation.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
4.9
In case of a finding of cartel activity, can the company seek to negotiate a settlement, plea bargain or similar resolution? If so, what is the process for doing so?
United States

Answer ... Companies can negotiate plea agreements with the DOJ. The plea negotiation process will generally start with the company informing the DOJ that it is interested in a negotiated resolution and is willing to cooperate in the DOJ investigation. Plea negotiations generally start after a period during which the DOJ investigation proceeds and the company cooperates by providing evidence and information requested by the DOJ. This process will often include proffers by company counsel to the DOJ, in which company counsel will provide information of relevance to the investigation. The process will culminate with negotiations that can involve the scope of the violation supported by the evidence, the volume of affected commerce and discounts that should be provided to the company based on the timeliness and value of its cooperation.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
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Topic
Cartels