Cross-Border Probes Slowing Amid Coronavirus Precautions

By Jody Godoy
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Law360 (March 4, 2020, 9:20 PM EST) -- Measures to control the spread of the new coronavirus are having an impact on the travel-heavy white collar bar, as attorneys say restrictions have slowed some international investigations.

Corporate investigations are a major part of white collar work, and cases increasingly involve multiple countries. Investigations into foreign bribery, money laundering and sanctions violations are among the types of matters that often require international travel.

Attorneys who spoke with Law360 are taking a wait-and-see approach, amending travel plans in response to firm-specific and public health guidance. They also said they hope enforcement attorneys will account for the ways companies' coronavirus precautions may temporarily affect cooperation with authorities and compliance programs.

Martin J. Weinstein — a partner at Willkie Farr & Gallagher LLP who leads the compliance, investigations and enforcement practice group — said his firm is taking an incremental approach. Attorneys have put off planned travel to China and are now using remote means to handle those matters. He said his team may revisit whether to carry out a planned trip to another part of Asia in the coming weeks.

"Obviously the safety of all our attorneys and employees is paramount," Weinstein said. "We are taking our cues from the medical professionals."

As of Wednesday, the Centers for Disease Control and Prevention has recommended suspending nonessential travel to China, Iran, South Korea and Italy, while urging those with chronic health conditions to delay travel to Japan.

Turning to Video

Internal investigations typically involve in-person interviews, but travel restrictions have prompted attorneys to use video conferencing or put off speaking with witnesses.

Paul Hastings LLP partner Nathaniel Edmonds said that while video-conferencing technology has improved in recent years, the measure is a stopgap.

Without being able to conduct an interview in person, it is more difficult to pick up on nonverbal cues that help investigators gauge whether answers are truthful or whether an interviewee is holding something back.

Edmonds said he and his colleagues are making a case-by-case call on whether to use video or postpone in-person interviews. So far, they have not faced a potential need to travel to a location where the CDC has cautioned against nonessential visits.

"It has to be case-by-case. We are in the client service business. We have to discuss this with our clients and not make overall prohibitions," Edmonds said.

With new cases identified in the U.S. every day and some firms restricting even domestic travel, attorneys conducting investigations that don't involve overseas travel may have to make similar decisions in the future.

Proceeding to the Extent Possible

While travel or sending a local partner to take investigative steps is still an option in some places, there is no choice but delay in locations where offices are closed and workers are staying home.

Kathleen Hamann of New England-based Pierce Atwood LLP said her first concern was for the partner firms she works with abroad. While her colleagues are doing fine, she said a firm in China was not able to meet with a client company due to a local social distancing policy.

"They said, 'First of all, they won't be there if we go there, and second of all, we can't go there because we have to stay home,'" Hamann said.

Even digital aspects of the work may feel a ripple effect. For example, if a company's IT department is busy trying to accommodate work-from-home arrangements, it is less likely to have a free hand to pull emails in response to a government request.

For tasks like document review that can be done from home, the speed is likely to be impacted by the quality of home internet connections and other factors, such as children being kept home from school.

Looking to Enforcement Agencies

Attorneys had hoped that the government would take into account slowdowns caused by attempts to prevent the spread of the virus, and so far they are seeing encouraging signs.

Representatives for the U.S. Securities and Exchange Commission and the U.S. Department of Justice declined to comment directly when asked whether affected companies would receive leeway in cooperating with the authorities.

Yet the SEC issued guidance on Wednesday relaxing filing deadlines for companies affected by coronavirus. The announcement made no mention of enforcement activity, but urged registrants to contact SEC staff with concerns.

DOJ spokesperson Peter Carr said the department "continues to perform its mission unabated as we also monitor COVID-19 developments in the United States and worldwide."

The DOJ is following guidance from the CDC and the U.S. Office of Personnel Management. A memo released by the OPM on Tuesday called on agencies to "begin to reduce nonessential travel as appropriate."

The American Bar Association canceled its annual white collar conference on Wednesday as speakers from the government, law firms and companies backed out, some of them citing their employers' travel restrictions.

Carr said that while "the department's overall mission remains unaffected," the DOJ is advising its supervisors to "be prepared to adapt to changing circumstances, and to use discretion and judgment in authorizing telework, remote conferencing, adjusting travel schedules or other steps deemed necessary as the situation evolves."

--Editing by Philip Shea and Alanna Weissman.

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