Mon, Nov 23, 2015

Operate Globally? Investigate Locally.

As the world economy becomes more integrated, investigations are rarely limited to a single jurisdiction.

But the world is not only more integrated, it is also more regulated, forcing investigators and their clients to take account of local differences.

Few activities are as intimately connected to territory as investigations. Even the nature and availability of publicly available information varies by jurisdiction, making local knowledge crucial. In Italy, for example, a transfer of residence must be declared to the authorities, who then check the information and place it in a publicly accessible register. In Greece, on the other hand, no such register exists. So, in certain places ascertaining an individual’s residence is a very simple matter; in others, the same exercise may require a complex investigation.

As countries respond to the drive for open and transparent government, the nature of what data are available and how to access them changes, requiring further location-specific skills. More important still, though, is interpretation: here a deep understanding of norms, conventions and references can make all the difference. “They made him an offer he could not refuse” is a simple example: the turn of phrase might refer to a great employment prospect, but in an investigation into organized crime it acquires ominous connotations. Anyone who has read intercept transcripts, for example in the context of a litigation support assignment where evidence is made available by the prosecutor, realizes that understanding relevant industry slang and background information and context is key to accurate interpretation.

Similar considerations apply to whistleblower letters. Poor grammar or lack of clarity could lead to dismissal of a serious allegation simply because it is misunderstood, but familiarity with a local expression, for example, may help determine the location where a fraud is taking place. This is especially important when looking at complaints from poorly educated whistleblowers who, more often than not, take an understanding of the context of their complaint for granted and thus send cryptic notes.

Even understanding and contextualizing press articles in certain countries requires knowledge beyond simple linguistic skills. At a basic level, is a given local journal independent or is it the mouthpiece of a particular owner or a political party? The problems do not end there: even an allegation in a respected, mainstream, high circulation publication may require context. If an Italian newspaper, for example, writes that someone has been “placed under investigation,” it may not mean much. In Italy, the law requires that any crime report—for example, a complaint filed with the police—however improbable, must spark an investigation.

Once we go beyond public sources, the importance of local knowledge only grows. It is essential in planning a successful inquiry. Are people likely to talk? What might be the most effective way to approach them? Going back to organized crime, in certain countries simply knocking on neighbors’ doors in search of testimony is likely to lead to only one outcome… omertà.

The nuances of communication are not the only local consideration. Regulation determines what any investigator can or cannot do in each territory. Some countries require licenses; others do not. Some regulate surveillance; many ban it outright; others still do not regulate it at all. The same applies to any investigative activity, from collecting press clippings – surprisingly, even this is illegal in some places – to rummaging through rubbish.

Take, for example, a pre-employment background check or an email review in the context of an internal investigation. The relevant rules and regulations vary dramatically by country. Even within the European Union, local versions of privacy or employment law can affect an investigator’s options dramatically. Pre-employment background checks require informing the subject in advance in most European countries. Access to email is heavily regulated, whether or not corporate computer use policies alert employees that such communications can be accessed in case of an investigation. Indeed, although the government is reviewing this provision at the moment, at the time of writing in Italy, even in cases of fraud or serious misconduct, companies need to alert an employee in advance, in writing, of a specific investigation.

Different regulatory environments affect internal compliance programs as well. A multinational’s anti-corruption program might meet local legal requirements at headquarters, but there is no guarantee that subsidiaries abroad are adequately covered. One way of approaching the problem is to consider the tools at one’s disposal at each local level and work backwards to construct a robust policy that will not only ensure regulatory compliance but also provide adequate means of efficiently limiting damage if a problem actually arises.

Even in our globalized world, then, companies need to be aware of national differences. Upon receipt of a whistleblower allegation, prior to hastily accessing someone’s email account in Latvia, Greece or Portugal, even if the corporate server is sitting comfortably in Texas, find an expert who can guide you through the local language as well as social and regulatory nuances.

Forensic Investigations and Intelligence

The Kroll Investigations, Diligence and Compliance team are experts in forensic investigations and intelligence, delivering actionable data and insights that help clients worldwide make critical decisions and mitigate risk.