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Dawn Raid Tips

Dawn Raid Tips

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The Ukrainian competition authority focuses on investigating the status of competition in different markets in Ukraine. They are empowered to do this either by sending written requests to companies or by performing on-site inspections (e.g., dawn raids).

In practice, Ukraine’s competition authority more often sends written requests, allowing the parties time to prepare their answers. Onsite inspections, including dawn raids, are more commonly reserved for potential cartel investigations. However, the authority can also perform onsite inspections, including dawn-raids, especially with respect to investigating such violations as cartels. This kind of inspection is much more stressful for the company and for its employees.

In those stressful situations, employees often do not know how to behave and can perform certain actions or provide information that can lead to fines for violations of competition regulations and result in substantial losses for the company. Under Ukrainian competition regulations, the maximum fine can be as much as 10 percent of the annual turnover of the particular group of entities.

Therefore, a lot of companies are very careful to train their employees on how to behave during potential dawn raids by competition authorities. However, they may face a problem with employee turnover, especially with reception staff and low-level managers.

Given this, we would like to suggest some basic tips that can be easily shared with different categories of employees, and some basic rules about how to behave during a dawn raid. 

Basic tips for the reception staff:

  1. Note that a dawn raid inspection by the competition authority may come at any time (most likely at 9 am), and you are obliged to allow them to enter, even if the company’s management is absent. 
  2. Politely ask for the documents identifying the inspectors and lead them to a separate and fully isolated room.
  3. Contact the appropriate responsible individuals in your company to arrange for their presence during the inspection.
  4. Do not discuss ANY matters with the inspectors except for technical arrangements such as checking identification documents, arranging for the presence of company employees, leading the inspectors to the meeting room, offering refreshments, and so on.
  5. Make sure that the arrangements listed above do not take longer than 30 minutes. 

Basic tips for business employees:

  1. Politely check whether the documents and information requested by the inspectors correspond to the scope of the inspection. 
  2. Do not delete any documents or files from your computer or other devices which are provided to you for work, as this will be checked by the inspectors.
  3. Do not speak to the inspectors off-record (including by messengers), because such communication will be recorded and used as evidence; speak only with respect to your own scope of responsibility, and do not provide any information regarding other employees.
  4. If you have any questions, ask for legal advice from your legal team before giving any answers to the inspectors.
  5. If you disagree with any statements made by the inspectors in the minutes of your interview, contact your lawyers for advice, as you have the right either to provide explanations and comments regarding the contents of the minutes, or to refuse to sign the minutes providing explanation of the reasons of your refusal.

Basic tips for the legal team:

  1. Ensure that the reception staff has updated details of persons who they must contact as a first priority when an inspection occurs. 
  2. Check whether inspectors have all the documents authorizing them to perform inspection as required by law (it is advisable to have a check-list of the required documents).
  3. Contact external lawyers, if necessary.
  4. Ensure that all inspectors are accompanied and monitored by at least one lawyer; don’t leave inspectors alone.
  5. Make notes on what the inspectors review and with whom they communicate.
  6. Ensure that inspectors do not request information outside the scope of their inspection.
  7. Ensure that legally privileged documents are duly marked, and remember that the company may refuse to submit them even if the inspectors request that they do so.
  8. Check the contents of the minutes of inspection, provide explanations and comments to them if necessary, or refuse to sign them providing an explanation for your refusal.
  9. Contact the competition authority after the inspection to receive information about the outcome of the inspection. 

By Volodymyr Monastyrskyy, Partner, and Oksana Franko, Associate, Dentons Ukraine

This Article was originally published in Issue 5.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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