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Some Observations on International Developments in White-Collar Cases

Robbert de Bree, Wladimiroff Advocaten

In this article, Robbert de Bree at Wladimiroff Advocaten explores the challenges posed by the ever-increasing internationalisation of white-collar cases. 

Robert de bree

The days when white-collar practitioners were experts in their local courts only have long gone. Those who wish to practise white-collar in today’s world, in some shape or form will be international lawyers. That, however, often presents challenges and dilemmas, ranging from explaining one’s own legal system to foreign colleagues (or in some instances foreign enforcement agencies or foreign courts) to setting up a global strategy for a client’s global white-collar issue. Here some observations on this growing international angle to white-collar cases are shared. 

The international development in white-collar cases of course doesn’t have one cause, nor does it undergo a straight-line evolution. As in many instances, white-collar cases are often a “by-product” of normal conduct – so where companies operate more globally, so will white-collar cases, over time, become more international as well. Similarly, where there is an enforcement deficit in case one “crosses borders”, this will attract all sorts of behaviour including violations of white-collar crimes. Alternatively, where developments themselves are international (think, inter alia, of situations where there are international treaties on topics), the relevant white-collar cases will also be international, at least in part. There is little new in this. Mutual legal assistance has been around for a long time and has proven a worthwhile mechanism for both enforcement agencies and prosecutors, as well as for the defence. In more recent years, however, we have seen that the international arena can itself be strategically used by those enforcement agencies and prosecutors, as well as by the defence.

Such strategising in respect of white-collar cases from the enforcement side is clearly visible – quite prominently – in corruption cases. Foreign corruption cases attract much focus and attention, and by nature have an international character. A treat of modern enforcement is that the authorities investigating and prosecuting these cases are quite cognisant of the fact that in many instances they need their foreign partners in order to build a proper case. The manner in which the foreign partner is addressed of course differs immensely. It is undeniable that some countries, such as the United States, have taken up more space in this international arena than others. Yet enforcement agencies with less sway have created a new development in this area, namely the quid pro quo approach. As such, in corruption and cross-border fraud cases a “division of labour” is made. This often means that, in corruption cases for example, the prosecutor in the country where the alleged bribery of the public official took place will investigate and prosecute that public official; he or she will then present or leave the bribing party to be investigated and prosecuted in the country where said party resides. In the meantime, during the investigation, both prosecution services will cooperate and share the fruits of that cooperation. This same pattern may also be followed where eventually a settlement is reached and no case is brought before a court. Notably, enforcement agencies and prosecutors of several countries have taken mutual legal assistance to quite another level, where they actively strategise their cooperation. This clearly presents some challenges and opportunities alike for white-collar practitioners. 

One of the challenges for defence lawyers is that they commonly have less infrastructure in place to organise similar cooperation abroad. They will need to defer to colleagues – be in it in their own firm’s office abroad or in other firms – to get assistance. This is sometimes the very best form of assistance, yet it often lacks routine and takes time to function properly. Such functioning, however, is important as the defence lawyer’s team will have to take decisions at this stage that may be crucial (for instance, whether the defence will cooperate with the foreign requests, whether it will raise objections, whether there is a need to do own – preliminary or internal – investigations abroad, and so on). Equally, the legal infrastructure in this respect is often challenging. Many of the mutual legal assistance treaties afford few rights of complaint, for instance, in the country receiving and executing the request, while several national criminal justice systems do not allow the defence to effectively test the evidence-gathering that took place abroad. This means there may be little protection against foreign evidence-gathering by enforcement agencies and prosecutors, since it is difficult to challenge the process of evidence-gathering and sometimes even the value and reliability of such evidence. 

Another challenge in international white-collar cases is the need to ensure that no “wires cross”. Often, where several jurisdictions are involved, a good manoeuvre in one jurisdiction may have adverse consequences in another. Keeping a global eye on all the wires involved can be a difficult task and will require a lot of effort from all defence lawyers involved. This effort aside, it also requires experience and understanding of the other jurisdictions – at least, at the basic level of understanding where these wires may exist.

Similarly, when aiming for a solution (be it in or out of court), international white-collar cases demand a global vantage point. It is not that a solution will always be a global one (a phased approach can sometimes be used), but at the very least the defence team should recognise what impact a particular solution (for instance, in one jurisdiction) could have on the wider case.

There are many more challenges in these types of cases, but the few mentioned here provide good insight into what is required from the defence lawyers involved.

In order to meet the challenges, an inventive mind is a helpful tool. This can even lead to new opportunities. An inventive defence lawyer may, for instance, try to bring “foreign” solutions to a national case. Examples can be the introduction of a compliance-monitoring mechanism (well known in US cases and World Bank sanctions cases) elsewhere in order to get a settlement (making it more attractive for a prosecutor to settle), or making a plea bargain in one jurisdiction as this may have a double jeopardy effect in other jurisdictions (while the consequences in those other jurisdictions would have been much higher without that preclusion).

Inventiveness alone, however, is not good enough. The type of international cases referenced here require a solid team. This can be a one-firm team (in the case of a global firm), but will regularly consist of various firms and different types of lawyers. It will also in many cases have extra “staff” such as data analysts/reviewers, IT staff, public relations management, experts, etc. These others will not always be part of the core team, but in quite a few instances the team will be a large one and it will require proper management. 

The defence lawyers involved will also have to be more explanatory than usual in this international context. It happens frequently that lawyers simply transfer their legal systematic thinking to the international context or to the other jurisdictions involved. This can lead to surprises, to say the least. A defence lawyer working in international cases will have to adopt, in some sense, a tourist mentality. If he or she is the lawyer requiring information from abroad, much like a tourist, many questions should be asked and it should not be taken for granted that the legal situation will be the same as at home. Conversely, where the defence lawyer is “the host”, he or she should operate much like a legal tourist guide. This attitude will not only create better teamwork, it will ensure the proper addressing of the relevant issues involved in the white-collar case at hand from the defence perspective. 

Perhaps most important is the need to set up a coherent strategy for the case (which obviously may be developed and will evolve over time). This strategy will first and foremost need to meet the requirements of the client. It will also have to address all relevant issues, and usually involves a decision/solution matrix. It will deal with the issues raised before (no “wire-crossing”, for example) and many others. For example, it will also have to deal with stakeholder issues (which stakeholders, in relation to the client, are involved, what their goal is, etc); other consequences of the white-collar case (civil (fraud) litigation as a consequence of a criminal case; tender exclusions; notifications to and by auditors, etc); and internal consequences of the client (in case of a company, for instance, whether an internal investigation should be conducted; whether personnel involved in the alleged illegal activity should be suspended or even dismissed, etc). Tough choices will be part of forming the strategy – choices that may have to be taken based on incomplete information. So, for example, where in some jurisdictions an internal investigation – and, following that, self-disclosure of the outcome – is customary (such as in the US), in others (where such “custom” does not exist) it will merely result in self-incrimination per se; ie, no leniency because of the self-disclosure). Naturally, the most important consequence will then dictate the course of action, but assessing that question can be a daunting task. 

In all of this, the white-collar practitioner of course needs to keep to a timely and proper interaction with the client. Many clients, even those who had forewarning, cannot truly see the woods for the trees in the international arena sketched here, and the white-collar lawyer has an important mandate in getting the client through this process.

The tendency, in sum, of white-collar cases to become more international in nature is ongoing and has challenging aspects. These challenges can perhaps not all fully be met, but as sketched, many of them can in some form be addressed – and some can even be turned into an opportunityThe days when white-collar practitioners were experts in their local courts only have long gone. Those who wish to practise white-collar in today’s world, in some shape or form will be international lawyers. That, however, often presents challenges and dilemmas, ranging from explaining one’s own legal system to foreign colleagues (or in some instances foreign enforcement agencies or foreign courts) to setting up a global strategy for a client’s global white-collar issue. Here some observations on this growing international angle to white-collar cases are shared. 

The international development in white-collar cases of course doesn’t have one cause, nor does it undergo a straight-line evolution. As in many instances, white-collar cases are often a “by-product” of normal conduct – so where companies operate more globally, so will white-collar cases, over time, become more international as well. Similarly, where there is an enforcement deficit in case one “crosses borders”, this will attract all sorts of behaviour including violations of white-collar crimes. Alternatively, where developments themselves are international (think, inter alia, of situations where there are international treaties on topics), the relevant white-collar cases will also be international, at least in part. There is little new in this. Mutual legal assistance has been around for a long time and has proven a worthwhile mechanism for both enforcement agencies and prosecutors, as well as for the defence. In more recent years, however, we have seen that the international arena can itself be strategically used by those enforcement agencies and prosecutors, as well as by the defence.

Such strategising in respect of white-collar cases from the enforcement side is clearly visible – quite prominently – in corruption cases. Foreign corruption cases attract much focus and attention, and by nature have an international character. A treat of modern enforcement is that the authorities investigating and prosecuting these cases are quite cognisant of the fact that in many instances they need their foreign partners in order to build a proper case. The manner in which the foreign partner is addressed of course differs immensely. It is undeniable that some countries, such as the United States, have taken up more space in this international arena than others. Yet enforcement agencies with less sway have created a new development in this area, namely the quid pro quo approach. As such, in corruption and cross-border fraud cases a “division of labour” is made. This often means that, in corruption cases for example, the prosecutor in the country where the alleged bribery of the public official took place will investigate and prosecute that public official; he or she will then present or leave the bribing party to be investigated and prosecuted in the country where said party resides. In the meantime, during the investigation, both prosecution services will cooperate and share the fruits of that cooperation. This same pattern may also be followed where eventually a settlement is reached and no case is brought before a court. Notably, enforcement agencies and prosecutors of several countries have taken mutual legal assistance to quite another level, where they actively strategise their cooperation. This clearly presents some challenges and opportunities alike for white-collar practitioners. 

One of the challenges for defence lawyers is that they commonly have less infrastructure in place to organise similar cooperation abroad. They will need to defer to colleagues – be in it in their own firm’s office abroad or in other firms – to get assistance. This is sometimes the very best form of assistance, yet it often lacks routine and takes time to function properly. Such functioning, however, is important as the defence lawyer’s team will have to take decisions at this stage that may be crucial (for instance, whether the defence will cooperate with the foreign requests, whether it will raise objections, whether there is a need to do own – preliminary or internal – investigations abroad, and so on). Equally, the legal infrastructure in this respect is often challenging. Many of the mutual legal assistance treaties afford few rights of complaint, for instance, in the country receiving and executing the request, while several national criminal justice systems do not allow the defence to effectively test the evidence-gathering that took place abroad. This means there may be little protection against foreign evidence-gathering by enforcement agencies and prosecutors, since it is difficult to challenge the process of evidence-gathering and sometimes even the value and reliability of such evidence. 

Another challenge in international white-collar cases is the need to ensure that no “wires cross”. Often, where several jurisdictions are involved, a good manoeuvre in one jurisdiction may have adverse consequences in another. Keeping a global eye on all the wires involved can be a difficult task and will require a lot of effort from all defence lawyers involved. This effort aside, it also requires experience and understanding of the other jurisdictions – at least, at the basic level of understanding where these wires may exist.

Similarly, when aiming for a solution (be it in or out of court), international white-collar cases demand a global vantage point. It is not that a solution will always be a global one (a phased approach can sometimes be used), but at the very least the defence team should recognise what impact a particular solution (for instance, in one jurisdiction) could have on the wider case.

There are many more challenges in these types of cases, but the few mentioned here provide good insight into what is required from the defence lawyers involved.

In order to meet the challenges, an inventive mind is a helpful tool. This can even lead to new opportunities. An inventive defence lawyer may, for instance, try to bring “foreign” solutions to a national case. Examples can be the introduction of a compliance-monitoring mechanism (well known in US cases and World Bank sanctions cases) elsewhere in order to get a settlement (making it more attractive for a prosecutor to settle), or making a plea bargain in one jurisdiction as this may have a double jeopardy effect in other jurisdictions (while the consequences in those other jurisdictions would have been much higher without that preclusion).

Inventiveness alone, however, is not good enough. The type of international cases referenced here require a solid team. This can be a one-firm team (in the case of a global firm), but will regularly consist of various firms and different types of lawyers. It will also in many cases have extra “staff” such as data analysts/reviewers, IT staff, public relations management, experts, etc. These others will not always be part of the core team, but in quite a few instances the team will be a large one and it will require proper management. 

The defence lawyers involved will also have to be more explanatory than usual in this international context. It happens frequently that lawyers simply transfer their legal systematic thinking to the international context or to the other jurisdictions involved. This can lead to surprises, to say the least. A defence lawyer working in international cases will have to adopt, in some sense, a tourist mentality. If he or she is the lawyer requiring information from abroad, much like a tourist, many questions should be asked and it should not be taken for granted that the legal situation will be the same as at home. Conversely, where the defence lawyer is “the host”, he or she should operate much like a legal tourist guide. This attitude will not only create better teamwork, it will ensure the proper addressing of the relevant issues involved in the white-collar case at hand from the defence perspective. 

Perhaps most important is the need to set up a coherent strategy for the case (which obviously may be developed and will evolve over time). This strategy will first and foremost need to meet the requirements of the client. It will also have to address all relevant issues, and usually involves a decision/solution matrix. It will deal with the issues raised before (no “wire-crossing”, for example) and many others. For example, it will also have to deal with stakeholder issues (which stakeholders, in relation to the client, are involved, what their goal is, etc); other consequences of the white-collar case (civil (fraud) litigation as a consequence of a criminal case; tender exclusions; notifications to and by auditors, etc); and internal consequences of the client (in case of a company, for instance, whether an internal investigation should be conducted; whether personnel involved in the alleged illegal activity should be suspended or even dismissed, etc). Tough choices will be part of forming the strategy – choices that may have to be taken based on incomplete information. So, for example, where in some jurisdictions an internal investigation – and, following that, self-disclosure of the outcome – is customary (such as in the US), in others (where such “custom” does not exist) it will merely result in self-incrimination per se; ie, no leniency because of the self-disclosure). Naturally, the most important consequence will then dictate the course of action, but assessing that question can be a daunting task. 

In all of this, the white-collar practitioner of course needs to keep to a timely and proper interaction with the client. Many clients, even those who had forewarning, cannot truly see the woods for the trees in the international arena sketched here, and the white-collar lawyer has an important mandate in getting the client through this process.

***

The tendency, in sum, of white-collar cases to become more international in nature is ongoing and has challenging aspects. These challenges can perhaps not all fully be met, but as sketched, many of them can in some form be addressed – and some can even be turned into an opportunity.

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