How to Conduct an International Internal Investigation

Imagine an anonymous worker at a multinational’s Egypt factory contacts the global whistleblower hotline and accuses the Cairo plant manager of dumping chemicals into the Nile. Or imagine the manager of a bank’s Mexico City branch reports that her secretary’s family seems to be trading on inside information. Or imagine an employee of a multinational’s Marseilles office complains that one of her co-workers keeps groping her. Or imagine the U.S. Justice Department contacts a multinational’s Milwaukee headquarters to ask about some lavish dinners the Middle East sales team hosted for officials in Saudi Arabia.

Any of these incidents, if it actually occurred, would be serious and could be criminal. Obviously a multinational receiving unproven allegations like these needs to find out what really happened. This means launching an internal investigation. Multinationals—particularly those headquartered in the United States—fully appreciate this. They know not to ignore or suppress information about possible wrongdoing. They recognize the value of conducting a thorough inquiry to find out whether what someone claims happened did or did not happen.

Additionally, outside of the United States employment-at-will regime, a thorough internal investigation can be vital because labor judges hold local employers to high burdens of proof. Overseas, an employer that disciplines or fires someone for committing a bad act will need to be able to prove it. An internal investigation can get the employer the proof.

In the last couple of decades, the state of the art for how companies conduct their internal investigations has evolved considerably, particularly in the United States. At multinational organizations, internal investigations often cross national borders, and so investigatory practices become a cross-border matter. A U.S.-headquartered multinational looking into suspected wrongdoing in overseas operations tends to want to export its sophisticated made-in-America toolkit of internal investigatory best practices. U.S. management and the U.S. board of directors may insist that a cross-border investigation be thorough enough to satisfy their tough American standards. They will resist backing off, rolling back, watering down or loosening up their good investigatory practices even in the face of an overseas local who protests “…but you don’t understand—that’s not how we do things around here.”

But conducting an overseas investigation in the U.S. style can trigger possible legal challenges. And of course, an international investigation has to stay strictly legal—investigators inquiring into possible criminal misconduct cannot afford to be caught breaking the law themselves. In addition to legal compliance, internal investigations should not disrupt an organization’s own internal operations, and should avoid causing ancillary cultural (and human resources) problems.

Our discussion here addresses a multinational seeking a way to resolve this conflict, a way to project-manage a cross-border internal investigation to meet headquarters’ high standards while also complying with applicable laws and accounting for overseas expectations hostile to American-style investigatory practices. We first set context by analyzing four threshold strategic considerations when conducting an international internal investigation. Then we address process, detailing four stages and thirty steps for how to conduct an effective and compliant cross-border investigation.

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Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.