'Dawn raids' - how do I survive?

With Hong Kong's competition laws now in force, what would your staff do if inspectors from the Hong Kong Competition Commission (Commission) showed up at your business with a warrant and started removing key records and IT equipment or sealing off your premises? Firstly don't panic, this brief overview will assist you in the event of an inspection by the Commission at your premises (also known as a 'dawn raid'). Dawn raids get their name as inspections are usually unannounced and can occur early in the business day when they are least expected. Being well prepared is key to minimise possible disruptions to your business. Under the new laws, the Commission has powers to seek evidence from persons who can assist or may have evidence of a contravention of a competition rule. This includes seeking evidence from current or former employees, competitors, customers, distributors, suppliers and trade association representatives. What should I do now?  Consider whether your business is at risk of contravening the competition law  Train staff on competition rules most relevant to your business, including compliance and dawn raids  Adopt a competition compliance policy that includes a tailored dawn raid manual The dawn raid has started, what should I do? On arrival the reception will usually greet the inspectors, they need to:  Ask for all inspectors ID and authorising documents, inspectors must provide these if you ask including  ID cards,  section 47 authorisation and  section 48 warrant. Copies should be made  Urgently call  the legal adviser,  senior manager and ask how quickly they can arrive Will the inspectors wait for your legal adviser and/or senior manager to arrive?  YES inspectors at their sole discretion can wait a reasonable time for external advisers to arrive but only if you have requested, your legal advisers to be present during the search and there is no in-house lawyer already on the premises. Issues such as privilege, relevancy and liability will often arise  Seat the inspectors in an empty waiting room and make sure someone stays with them at all times  Keep conversation purely administrative at this stage and keep them updated on arrival times  NO inspectors do not have to wait and can immediately commence searching particularly if your legal advisers cannot commit to a timely arrival or waiting for them will adversely impact the search  Do not obstruct the inspectors but make sure someone stays with them at all times on your premises  Ask if the inspectors can delay the substantive questioning of any individuals  Ask what category of documents they are looking for  Open up a bridge call with your legal adviser and senior manager if possible until they arrive and identify documents not subject to legal professional privilege (LPP) that the inspectors can start receiving What about other staff?  Validity and scope of inspectors documents should be copied and checked with legal adviser's help  A shadower should be designated to each inspector to 'shadow' them at all times. The 'shadower' should take notes of the inspector's actions and ask for a copy of all documents taken by the inspector  IT department should be on standby if their co-operation is needed by the inspectors, including to assist block emails temporarily and provide 'administration rights' to access documents  All staff should be informed of the search as set out in your dawn raid manual, including the process for cooperation and notice that the search is not to be communicated outside of the business During the dawn raid, what can the inspectors do? Inspectors powers are broad and they can, amongst other things:  Search for relevant documents and other evidence including desks, bookshelves and cabinets, and copy, take extracts or take away anything which might be or contain relevant evidence (including electronic equipment and devices such as hard drives, servers, USB keys and mobile phones)  Question and request any person present at the premises to produce relevant documents  Use reasonable force to gain entry/access to evidence and remove any obstructions  Take such action and steps necessary to preserve any relevant evidence, prevent tampering or tipping off (including, instructing employees to move away from the desk, stopping external communications, sealing offices or filing cabinets)