Corporate scandals in recent years and the ensuing passage of Sarbanes-Oxley, Dodd-Frank and other compliance-based legislation have resulted in an exponential increase in company-initiated internal investigations. Once employed largely in the context of emergency incident responses or employer-employee disputes, the internal investigation is now a staple of sound corporate governance. And as the marketplace becomes increasingly globalized, so too does the global regulatory climate. In this context, international investigations have taken center stage.

International investigations pose unique challenges for lawyers and the companies they represent. Best practices for domestic (U.S.) investigations do not always apply, and, in fact, employing them could result in violations of foreign laws and regulations. The potential traps for the unwary can arise at all stages of representation—from engagement to disclosure. Understanding the legal landscape in the relevant jurisdictions at each stage of the investigation is the key to navigating an international investigation and protecting client interests. Most importantly, lawyers should proactively identify any conflicting laws and develop an investigation plan that accounts for the jurisdictional differences before the investigation even begins. While not exhaustive, the below issue-spotting guide provides an overview of some of the principal issues lawyers should address in the context of an international investigation.

• Engage local counsel and consultants. It is crucial to use the expertise of local attorneys who can provide advice regarding compliance with foreign laws. Local counsel can help avoid violating local data privacy protections; running afoul of local employment or other regulatory schemes; or incurring civil, or even criminal, sanctions. In addition to local counsel, consultants, such as forensic accountants and other professionals, can provide indispensable expertise to an investigation. It is vitally important, however, that lawyers ensure local counsel and consultants are engaged in a way that maintains attorney-client privilege protections internationally and across all engaged entities. Lawyers should structure engagement agreements with an eye toward local law to ensure that privilege extends to consultants. For example, local law may require that external counsel, and not the client, engages the consultant. Moreover, lawyers should confirm that consultants, particularly those who may handle sensitive data, are experts in local data privacy laws and engage in best practices with respect to information security. Once the engagement is determined, counsel from all jurisdictions should be involved in the planning phase of the investigation. Coordinating with lawyers in each jurisdiction with respect to the investigation plan and scoping documents will lessen the possibility of, and hopefully avoid, complications later in the investigation.

• Protect attorney-client privilege. Internationally, the scope—or even the very existence—of the attorney-client privilege can be unclear, and privilege protections can vary dramatically across jurisdictions. In the United States, the attorney-client privilege applies to and protects against forced disclosure of certain communications between an attorney and a client. With respect to internal investigations, as long as providing or obtaining legal advice is one of the significant purposes of an investigation, the attorney-client privilege protects the documents related to the investigation, regardless of whether the investigation was required by statute, regulation, or company policy. U.S. courts, however, have not afforded the protections of privilege where the communications were not privileged under narrower foreign laws. As a rule of thumb, communications about compliance with U.S. law is afforded the protection of U.S. privilege law, and communications about compliance with foreign law are controlled by the foreign jurisdiction's privilege protections. Further, foreign privilege protections may be narrower than U.S. protections and may not be applicable to the company and the interviewer as U.S. counsel understands them. In some countries, the privilege does not exist at all. In others, the privilege “per se” does not exist, but legal advice and communications may be protected by professional secrecy or other confidentiality obligations. In some countries, privilege exists but does not apply to in-house counsel. In such countries, having in-house counsel lead an investigation could waive the attorney-client privilege pertaining to the critical components of an internal investigation.

• Comply with local data privacy rules. The collection and transmission of personal data is often highly regulated abroad. Concerns about data privacy permeate all aspects of international investigations and must be considered at each stage and for each jurisdiction. The investigation plan should address at the outset how the flow of all types of information will be handled throughout the investigation, with an eye toward the relevant laws of each implicated jurisdiction. Of particular note is the impact of local data privacy laws on document collection and review and witness interviews, discussed further below.

• Document collection and review. International data privacy or protection rules could impact how an investigations team handles documents, from preservation to disclosure. Standard preservation of documents may constitute the processing of personal data, which implicates some jurisdictions' data privacy laws. Customization of the document preservation notice may be required to conform to local data privacy, employment and other laws. The collection of documents may also be subject to certain data privacy laws. In the U.S., the right to search employee emails is typically assumed and generally upheld. Internationally, even if an employer has a policy reserving the right to search employee emails, certain countries' laws may favor employees and can invalidate that policy or otherwise impose restrictions. Data privacy laws generally restrict the transfer of data between jurisdictions, including intra-company transfers. Thus, the review of documents may present logistical concerns that are not generally present in domestic investigations.

• Witness interviews. In many countries, data privacy and secrecy rules also limit what an employee may be asked and which documents counsel may examine. For example, a lawyer may be unable to legally inquire about an employee's past employment without violating data privacy rules, or counsel may be prohibited from showing a witness particular documents. Counsel may even need to review employment contracts with the aid of local counsel before approaching particular witnesses for interviews. For counsel conducting domestic investigations, the Upjohn warning—the disclosure explaining counsel's relationship to the witness and the company—is familiar and routine. In cross-border investigations, the standard warning may not be compliant with local law and may need to be customized in coordination with local counsel. Some jurisdictions limit the extent to which the warning can be delivered, and others require even more information. In some jurisdictions, witness preparation, which is commonplace in the United States, is restricted and even forbidden. Counsel should review all of these restrictions with local counsel prior to beginning any witness interviews in an international context.

• Seek to understand cultural norms and background. Understanding the witness's cultural background is as important as understanding the legal limitations placed on witness interviews. Witnesses from cultures that value privacy and formality more than the average American may react negatively to being interviewed, particularly if the questions are seen as probing or aggressive. Lawyers should consult with local counsel about what the witness will expect and how to structure and conduct the interview to make the witness feel comfortable.

Meghana Shah is a partner in the litigation practice group at Eversheds Sutherland, and Brittany Cambre is an associate in the group. Lewis Wiener is co-chair of the firm's global financial services disputes and investigations group. Ronald Zdrojeski is co-head of the firm's global litigation group.