In today's regulatory landscape, dawn raids — surprise, on-the-spot government inspections — have become increasingly prevalent, especially in Europe, Asia, and South America, where regulatory scrutiny is intensifying. In the European Union, the European Commission (EC) has ramped up its efforts to uncover anticompetitive practices and other misconduct, leading to a rise in unannounced inspections. In September 2024, the EC raided offices of Nasdaq and Deutsche Börse in the financial derivatives sector. Similarly, across the Asia-Pacific region, and specifically in Japan and China, governments have adopted stricter regulatory frameworks and enhanced powers to obtain evidence, resulting in more frequent dawn raids aimed at enforcing competition laws and anticorruption measures.
As regulators sharpen their tools to detect and investigate corporate misconduct, companies must be prepared to navigate these high-stakes inspections with strategic foresight and effective response protocols. While the focus of this article is on managing an active search and seizure, it is important to note that being prepared for a dawn raid can safeguard your company from potential reputational fallout, business disruptions, or further legal complications. This includes assembling a dawn raid response team, preparing contact lists and instructions for employees likely to have first contact with government agents, identifying outside counsel in advance, and drafting communications to be sent out to employees in the event of a raid.
Below we provide key steps for a company to effectively manage a dawn raid once it is underway. It is important to note that investigation powers vary across enforcement authorities and jurisdictions, and outside counsel can help navigate these nuances.
General Guidelines for Managing Government Searches and Seizures
- No steps should be taken to prevent the authorized search and seizure operation from proceeding.
- Cooperate with agents, but do not volunteer information that was not requested.
- Designate company personnel to supervise government agents during the search unless this is specifically forbidden by the officials. Supervising personnel should keep written notes of the officials' actions.
- If possible, make statements or answer questions only in the presence of a lawyer. Direct any requests from authorities to company counsel, including, for example, inquiries about questioning certain individuals or the location of certain documents/data and consent to search the same.
- Do not destroy, hide, move, or alter any information, whether physical or electronic.
- Do not speak to anyone outside the company about the raid.
A Search is Imminent or Underway. What Should You Find Out?
Whenever possible, it is helpful to obtain the following information from the government agents at the outset of the search and share immediately with legal counsel:
- An explanation of the scope, nature, and reason for the request for information and property.
- Copies of the warrant, order, or other official document authorizing the request for information, as well as any other written documentation available that pertains to the investigation.
- The name and telephone number of the government attorney, prosecutor, or magistrate (in the case of civil law countries) overseeing the related investigation.
- Photo identification and business cards from each agent participating in the information request. If this information not available, request the full name, agency affiliation, work address, and telephone number of each agent.
- Also determine (1) whether the agents are investigating a civil or criminal matter, (2) the legal authority initiating the investigation, and (3) whether the authority extends just to information requests or also includes the authority to seize company property or the personal property of company personnel.
What Should You Do During the Inspection?
- Politely greet the authorities and inform the agents of the company's intent to cooperate fully.
- Immediately contact your predesignated response team, including the company legal department and outside counsel. Provide all known details regarding the search and seizure request to legal counsel as well as details regarding the authority of the agents, how many there are, and their identities. Organize a response team meeting to discuss the inspection's scope and determine a plan of action.
- Provide government agents with an estimated arrival time of legal counsel and ask agents to wait for the designated response team, including legal counsel. It is important to understand that officials are not required to wait.
- Carefully review any written subpoena or other request for information to determine the scope of what is being requested and, if possible, seek additional information regarding the exact nature of the request for information.
- Keep a log of all requests made, any files or electronic resources copied, any computers or databases accessed, and physical evidence taken. Determine if law enforcement is seeking to obtain remotely located electronic evidence and discuss this with counsel, as this may not be permissible in certain jurisdictions. Document the names of all persons with whom agents had any discussions, however brief. Make copies of all evidence taken or examined if permitted. Ensure that inspectors do not copy documents covered by legal privilege or documents falling outside the scope of the investigation. Request the intervention of counsel in case of a dispute, but never refuse to let officials take or copy documents. Simply assert the company's position and document it.
- Email onsite employees to communicate that a search and seizure is taking place, the company intends to fully cooperate, all dealings with the agents should be courteous and professional, and that there must be no deletion, destruction, concealment, or alteration of documents and data. Request permission from investigating officials to send nonessential employees home and instruct any employee who is allowed to leave to remain available and not to speak to anyone outside the company about the raid.
- Determine from officials whether inspections are occurring at other company locations or at the homes of any company employees. In some jurisdictions, including the U.S., it is common for officials to conduct simultaneous "knock and talk" interviews at executives' homes that shortly precede or coincide with the search of the company location. Executives should be aware that in most cases there is a right to decline such interview requests.
What Should You Do After the Inspection?
- Meet with inspectors to clarify next steps, including confirming that the dawn raid has indeed ended. Ensure that inspectors provide the company with an index of all documents copied or seized. Request copies of any records created during the investigation, including employee interview notes and documented disputes regarding privileged documents or the scope of the investigation.
- Communicate internally to inform onsite employees that the dawn raid has ended and to collect all documentation from employees who accompanied authorities during the inspection. Debrief employees who interacted with officials or who provided documents.
- Regroup the dawn raid response team to debrief and discuss outstanding issues, including privilege questions and any further required cooperation with authorities. A member of this team should prepare a precise and factual written report of the raid as soon as possible.
- Request a copy of the seizure log from the authorities. This document outlines an inventory of the documents taken and a list of employee interviews. Note that this may or may not be provided. If the log is provided, the dawn raid response team should read the document carefully and ask to make any corrections and/or additions.
- Develop a communication strategy. Prepare a public statement in consultation with outside counsel, and designate spokespeople to ensure consistent messaging.
- Initiate an internal investigation to determine quickly whether to voluntarily self-disclose potential violations of the law before they come to the attention of regulators or to pursue cooperation credit. An internal investigation also may allow you to identify and remediate potential compliance weaknesses and secure cooperation credit.
By following these steps, companies subject to a dawn raid can prepare for and effectively manage unannounced government inspections. Foley is here to help you evaluate the effectiveness of your policies and improve your company's readiness in case of law enforcement action. We have the resources to help you prepare and respond to these high-stakes situations, including multinational investigations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
