Managing International Investigations: European Conceptions of Attorney-Client Privilege and Their Effect on International Internal Investigations

Update on 5/12: Jones Day’s complaint has been thrown out by a court in Munich. That decision reinforces the importance of examining how attorney-client privilege is construed in different foreign jurisdictions.

On March 15, 2017, German prosecutors raided the Munich offices of Jones Day as part of their own investigation into the Volkswagen (“VW”) diesel emissions scandal and VW’s luxury car unit, Audi. The U.S.-based law firm has represented VW since 2015, when it began conducting a comprehensive internal investigation to identify those responsible for the scandal. Although VW has long insisted that no one on its management board is implicated, Jones Day’s final report ultimately led VW to plead guilty to fraud, obstruction and other charges. As a result, VW has incurred more than $22 billion in fines and settlements. Although the results of Jones Day’s investigation were provided to VW and the U.S. Department of Justice, the report was never publicly released. In light of the March 15 raid, it appears that the German authorities now want access to this (and other) protected information.

In the United States, the work product and attorney-client privileges are sacrosanct. Therefore, subject to limited exceptions, the government is not usually privy to communications between a lawyer and his/her client. However, the concept of attorney-client privilege in Germany is far more fluid and contentious. In fact, there is no general principle under German law that recognizes the attorney-client privilege. Instead, the German courts are left to interpret provisions of the civil and criminal codes of procedure along with the Federal Lawyers’ Act, often with varying results. For example, the Regional Court (Landgericht) of Hamburg issued a landmark decision in 2010 approving the seizure of internal investigation documents from a law firm (decision 608 Qs 18/10). However, in 2015, the Braunschweig Regional Court came to the opposite conclusion, holding that documents prepared by external lawyers in an internal investigation were protected because they were prepared in the context of a defense (decision 6 Qs 116/15).  (For commentary, click here). Here, the German authorities argue that to the extent there is a privilege, it does not apply because Jones Day was hired to conduct a limited internal investigation and was “not functioning as the company’s legal representative.”

Continue Reading

A Transactional Overview of Foreign Direct Investment Into the United States

Stock image from LocationUSAFor foreign companies considering market expansion and investment in the United States, there are two general avenues. First, companies consider achieving these goals by a merger with or acquisition of a domestic business entity. Second, they consider opening a representative sales office or manufacturing facility in the United States. This overview will focus on the latter alternative, specifically a transactional overview of the process for investing in a manufacturing facility.

Goals: A couple of common factors drive such an investment decision. One is to shorten logistical supply paths for significant customers with existing operations in the United States. Another is to hedge against fluctuations in raw material pricing, currency, taxes, and trade duties.

Teaming: Most companies designate internal project teams comprised of members experienced in production, logistics, and finance. For larger projects, companies should also include additional members experienced in human resource management, government relations, taxation, and real estate/construction management.

Definition of Project Scope: Once the internal team is staffed, companies then work to define the facility design and location. During this stage, many companies tap either internal resources familiar with this process in the United States or engage engineering and site consultants to develop the criteria for the project. The end work product for this stage is a summary of the internal business case and the external summary of the jobs to be created and investment required to establish and grow the facility over the first five years. Continue Reading

Amid Uncertain Trade Climate, a Look at Top Imports, Exports With Mexico

Auto companies, computer manufacturers and oil producers are closely watching how the trade relationship evolves between the U.S. and Mexico under President Donald Trump. Their products are among the top U.S. exports to Mexico, as well as the top Mexican imports to the U.S.

President Trump has said that Mexico is taking American jobs. He’s floated the idea of a border tax. He’s also called the North American Free Trade Agreement “a disaster.” NAFTA has been in place about 25 years, and – for better or for worse – it has boosted trade with Mexico enormously.

Given the uncertainty about where trade policy is heading, it’s worth examining what sorts of goods currently cross our southern border. After all, Mexico is our third-largest trading partner when you factor in all the goods that move back and forth, according to federal data. Here are the top imports and exports:

MX image Continue Reading

Trading With Cuba: Time to Light Up the Cohibas?

Classic vintage car and coloful colonial buildings in Old HavanaGuest Author: Eric H. Cottrell, Partner and Business Litigation and Government Investigations Practice Group Leader

Frequent flier miles burning a hole in your e-wallet? Feeling the need for some sun, sand, and salsa music? Why not visit the land of Hemingway?  No, not Key West … Cuba!  Beginning in 2016, American, Alaska, Delta, Frontier, JetBlue, Spirit, Southwest, and United began to offer regular flights to Cuba.  However, before you pack your suntan lotion and favorite pair of shades, make sure you know what you can and cannot do as a person subject to U.S. jurisdiction on your Cuban adventure.

The Obama administration significantly relaxed the Cuban embargo and re-established U.S.-Cuban travel and trade relations. Although travel to Cuba for tourist activities remains prohibited by statute, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) has issued general licenses for 12 categories of travel, including: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and meetings; (5) educational activities; (6) religious activities; (7) public performances, athletics, competitions, or the production of art, film, or music; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research and educational institutions; (11) exportation, importation, or transmission of information or informational materials; and (12) certain authorized export transactions.  Under a general license, travelers no longer have to obtain prior permission to travel so long as their travel falls within the scope of one of those general licenses.  Continue Reading

Form I-9 Update: Three Important Questions Answered

Man Filling Out Form on Table

Guest Author: Sarah Ford, Employment Partner and Diversity Committee Chair   

Given increasing federal attention to the issues of immigration and authorization to work, let’s do a quick “check in” on your new hire procedures.

  1. A new version of the Form I-9 became mandatory on January 22, 2017. You already know that you must begin the Form I-9 process with each new employee no later than his/her start date. But how do you know whether you are using the correct version? It’s easy. The new version says “Form I-9 11/14/2016 N” in the lower left-hand corner. Moving forward, you should use this new version for every new hire. The “N” signifies that older versions of the form, e.g. the 03/08/13 version, are no longer acceptable.  
  2. What if you need to re-verify the employment authorization of an employee whose original Form I-9 is one of the older versions? Can you still use the Section 3 Reverification section of the employee’s original form? The answer is no. For any reverifications that are taking place after January 22, 2017, use the new Form I-9. Don’t discard the original form, of course! Just keep both the old form and the new form together in your I-9 binder.   Continue Reading
LexBlog