©2014
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
In addition to being costly, successful overseas investigations require additional planning to
execute in a hostile environment without transgressing any laws. This session will address
practical and legal problems you may encounter, including document and digital data gathering;
interviewing using translators; resourcing local investigators and legal firms; and dealing with
potential violations of U.S. and UK bribery and corruption laws.
CHARLOTTE COCHRANE, CFE, CA, CII
Founder and Managing Director
CC & Associates, International Fraud & Compliance Consultants
Hong Kong
Charlotte Cochrane has more than 25 years of financial crime investigative experience, including
extensive fraud risk assessments. She has worked in the financial services industry and with
governments in Europe, Africa, South America, and Asia Pacific with many successful
investigations and prosecutions in local and worldwide jurisdictions. Whilst in the UK, she
worked for an international white-collar crime investigation consultancy before joining the
forensic accountants unit of the Crown Prosecution Service. In her 18 years with a large
international financial institution, she helped the compliance department develop whistleblowing
policies to comply with increasing international regulations and legislation, in addition to
investigating many whistleblowing complaints in Asia Pacific.
RONALD YU, J.D., LLM
Consultant
CC & Associates, International Fraud and Compliance Consultants
Hong Kong
Ron Yu is an author, a U.S. Patent Agent, general counsel, former digital forensics professional,
and conducts postgraduate classes on patent, intellectual property and information technology
law, and intellectual property strategy. He has published articles on online learning, digital
forensics, and intellectual property, and he has authored the Information Security and Forensics
Society’s publications on computer forensics and computer forensics best practices, the
book Intellectual Property for Business, and the Hong Kong chapter for the 3rd edition of the
book Electronic Evidence.
“Association of Certified Fraud Examiners,” “Certified Fraud Examiner,” “CFE,” “ACFE,” and the
ACFE Logo are trademarks owned by the Association of Certified Fraud Examiners, Inc. The contents of
this paper may not be transmitted, re-published, modified, reproduced, distributed, copied, or sold without
the prior consent of the author.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 1
NOTES With the advent of the Dodd Frank Act in 2010, more and
more whistleblowers worldwide are standing up to be
counted. This is great news for Certified Fraud Examiners
who are now in even more demand to undertake corporate
fraud investigations, often in overseas subsidiaries of U.S.
corporations. These whistleblowers can be dissatisfied
clients or customers, unhappy lower management
employees, or unsuccessful bidders on purchase
contracts—or, as was recently reported by the International
New York Times, 5% of whistleblowers of Chinese
Government employees are disgruntled mistresses, also
known as the “little third” or “other woman.”
So what are some of the pitfalls you will encounter in an
overseas investigation?
Probably the most important tip for overseas investigations
is to make sure you have an accurate briefing of what
exactly is required of you before you start. Does
management want “to send a message” of zero fraud
tolerance or do they just want to know what is happening in
their Outer Mongolian subsidiary? How much will they
spend to put the perpetrators behind bar—or do they just
want to recoup their losses? The why is as key as the how.
Once you know why they want the investigation, the how
becomes easier. Major decisions like whether the
investigation will be covert (undercover) or overt (not
undercover) are crucial and need to be made up front with
senior management.
Determine what resources are needed and whether you
need to take them with you or find them locally. These
include translators, transcribers, local investigators, and
lawyers (with criminal and civil labor law knowledge) as
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 2
NOTES well as local IT support. You will most certainly need good
local legal advice on the ground.
I have seen many two-week investigations turn into four
weeks waiting on legal opinions on such things as:
Has the target signed a document allowing access to all
his work-related data?
What rights does the target have during the
investigation (e.g., rights to know how the investigation
is proceeding)?
Can we access his personal items (e.g., computer files,
filed documents, email, letters, invoices, appointment
books, etc.)?
Can digital or paper data travel across borders (i.e.,
does the digital data analysis need to be done in
country, or can it be done at an overseas location)?
My legal colleague, Ron Yu, will speak in more detail
about this later.
Before jumping on that plane (and I know that you really
cannot wait!) make sure you have done your desk research
before you leave. Research the laws of the country you are
going to before you go, so that you have at least some idea
of the legal principles operating there. Always make sure
what you plan to do is legal.
I once travelled to a European country to do a covert
investigation into a senior manager. Our first act was to
“clone” his company laptop, which he had conveniently left
in his office, which was unlocked. I had informed his
immediate supervisor, an American, the day before, about
the overnight cloning so when I came in the next day, after
two hours sleep, I was really upset to find out the target’s
immediate supervisor had told him that his computer had
been cloned. The senior manager then made all sorts of
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 3
NOTES threats against us saying that it was an illegal act in this
country, under data privacy laws, to do such a thing without
the consent of the computer’s owner. This was a criminal
act punishable by imprisonment, and ignorance of the law
was no defense.
On another occasion I was working on an investigation in a
Middle Eastern country when I upset one of the more
senior managers in the company (by asking him awkward
questions during a translated interview). He exacted his
revenge by getting a copy of my passport from immigration
(where he had friends) and noticed that I had entered the
country on a visitor’s visa, not a business visa, as required.
I had not had the time to get a business visa and had just
applied for a tourist visa on arrival. So he organized a posse
of people from immigration to come around to the office to
arrest me. Fortunately, I got wind of this arrangement and
grabbed my computer and the office printer, and fled to my
hotel room where I continued my work undisturbed.
Document Gathering
Document gathering offers a particular challenge in
overseas assignments, mostly because the documents are
unlikely to be in English. Therefore, when searching areas,
you have to make a judgment whether a particular
document is important or not. Even being able to read a few
Japanese, Korean, or Chinese characters can make a big
difference; otherwise, you will need to delegate that job to
a local who will need to be fully briefed on the exact
information for which you are looking.
In Mainland China there is a huge trade in fake fapiao
(invoices). It is usually possible to buy, for a small sum of
money, a genuine-looking invoice possibly reproduced on
reputable company paper with a genuine-looking chop,
(rubber stamp), including believable sequencing, dates,
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 4
NOTES names, and amounts—so be warned when looking at
Mainland China invoices.
As an investigating accountant, one needs to be aware of
what to expect in a genuine Mainland China invoice.
Generally, there are two types of fapiao—that is, general
invoices where the total is inclusive of sales tax and those
showing sales or value added tax (VAT) separately in the
total. These invoices are deductible for tax purposes and
scrutinized by the taxman. Both invoices will probably
have company chops on them, but, despite a very stiff
criminal penalty for creating forged chops, there are many
such forged chopped invoices out there. A sales tax or VAT
invoice is required to include a company tax number, an
address, a telephone number, and bank account
information, so this gives you several parameters to check
if this is genuine or not.
Spotting duplicates is difficult, so always check back with
the originating company. A good local investigator should
be able to guide you.
For valuable information sources, I personally find that
diaries, especially those containing appointments, are very
useful. Also name cards and phone numbers scribbled on
Post-Its can all be useful sources of information—and do
not forget a quick search of the rubbish or trash bins.
Often, it is important to analyze large amounts of computer
data to determine the scope of an investigation. This will
require local IT support, preferably someone with
knowledge of data analytics. This person should be selected
very carefully to ensure that he is not the perpetrator of the
fraud (or connected to the perpetrator) being investigated!
Transactional analysis can give you a population of targets
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 5
NOTES to work with (e.g., a list of people who have authorized
certain transactions on the computer system).
Local people with knowledge of the computer systems are
invaluable, especially in explaining the many different
ways that payments can be made by a company. A
background in accounting or auditing is very useful in such
a case.
Interviewing
Deciding to delegate to others the interviewing of key
targets is not easy. I prefer to discuss beforehand with the
translator (or local lawyers) what questions I would like
posed to the targets and in which order. Of course, this
makes it difficult to follow up immediately or circle back to
previous questions and answers, and the accuracy of the
translation is not measurable.
You could choose to use transcription, which is
subsequently translated, but this is extremely time intensive
and can get very expensive. However, for important
interviews with key people, this is the best way to go and
will result in a good interview capable of being used in a
courtroom. Again, chose your translator carefully,
preferably one who is locally registered and with court
experience if possible.
Using a translator during interview does give you the added
advantage of being able to read the target’s body language
at your leisure throughout the interview. However, do be
aware of anthropological traits and customs of the current
country where you are investigating, and study up on body
language before you go.
The local laws regarding taping conversations need to be
followed. If it is illegal, you cannot do it. It may be legal
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 6
NOTES but still not admissible in a court of law. Keep the
investigation legal.
Choosing a Local Lawyer or Legal Firm
When choosing a local lawyer or law firm, try to get word-
of-mouth recommendations. Most larger law firms in Asia
have American affiliates. This is a good place to start, but
check them out locally. They will be more expensive. Other
sources are law yearbooks, Internet listings, or
recommendations from other investigators.
Make sure you ask for specific legal skills as appropriate,
such as good labor law knowledge or experience in dealing
with labor union disputes, arbitration, litigation, criminal
law, or civil law. It really is a case of “You pays your
money and takes your choice.” Saving money by using a
small, inexperienced law firm may cost you more in the
end.
Sometimes you need to play hardball, especially in some
South American countries, where legal criminal cases can
drag on for years with poor results. Sometimes what you
really need is a good, hard negotiator to go to bat for you.
Often, this will give you a more satisfactory outcome, both
in monetary and time terms. I still have some criminal
cases in Europe and Argentina, from the late 1990s and
early 2000, running through the courts with no definite
outcome.
Choose legal help according to the country’s laws.
Remember, lawyers are expensive. Use them for legal
advice, not translation services, as this can get very pricey.
Choosing a Local Investigator
Again, personal recommendations are invaluable, but a
good place to start is the ACFE register of members, which
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 7
NOTES will give you a list of reliable investigators in each country.
Also the Council of International Investigators
(www.cii2.org) is a good source of international
investigative expertise.
Local investigators need to be briefed very carefully to give
you the best chance of discovering what you want to know.
They must be clear about what they can and cannot do. The
U.S. is one of the few countries in the world that actually
grants licenses to private investigators, so you need to rely
on the local investigator and local legal advice to keep the
investigation within the law.
The “turnaround” time of a job by local investigators is
key. They need to be given a deadline to stick to. It is no
use coming up with the “smoking gun” after the case is
closed.
Searches for Information on Overseas Shell Companies
This is a complex and expensive area of investigation. Most
local private investigators will not—or cannot—help, but
someone will know someone on the ground (in the British
Virgin Islands (BVIs), Isle of Man, Channel Islands, etc.)
who, for a large fee, might be able to pierce the corporate
privacy veil to reach the actual owners, and—rarely—the
assets, of such overseas entities.
My experience in these cases has only been successful
when I have actually fronted up and visited the local
financial regulator or commission of that overseas
jurisdiction or visited a local lawyer or accounting firm
involved in the case. Sometimes a whole case can be
“cracked open” by one visit and a lot of luck.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 8
NOTES Other Resources
One often-neglected resource overseas is local law
reinforcement. In some countries, it can be woefully
underfunded, like in one African country where we had to
supply telephones, computers, printers, transport, and food
to get them to help us.
Taking Information Overseas
Taking information overseas is an action that is now in a
tangled web of data privacy and other laws.
Be very careful when carrying computer hard drives cross
border. Not only may they contain “personal data,” which
cannot go cross border without the owner’s specific
permission, but they might also contain harmful or
unsuitable pornography.
The data privacy laws vary greatly country by country as
do those allowing pornography to go cross border. Despite
corporate policies, computer discs belonging to company
employees in many countries around the world contain
many gigabytes of pornography or other material that
would breach local morality laws. Customs officers can
confiscate such data if they feel it would harm the country
you are entering.
Bribery and Corruption Overseas
It is important to remember that business is conducted in
different ways in overseas countries. In Mainland China,
there is the prevalent concept of guanxi which is mandarin
for connections leading to a favor. Most business
transactions take place because there have been previous
guanxi between the parties involved. This guanxi would
have been built up over a period of time and would
probably have involved the exchange of gifts. The gifts
could have been fairly substantial and certainly way beyond
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 9
NOTES anything contemplated in the U.S. Foreign Corrupt
Practices Act (FCPA) of 1977 and the UK Bribery Act
(BA) of 2012. Examples of such gifts are: valuable
artworks, antiques, overseas properties, education, or even
employment—in the U.S. or Europe—for their children.
However, in the current climate in Mainland China,
compliance people are looking at expensive moon cakes
and rice wine provided as gifts to government employees as
being unacceptable in terms of potential corruption
according to the PRC Central Communist Party.
During investigations, you will probably find yourself
explaining to the folks back home what really goes on in
overseas business transactions. It is not uncommon for
local businessmen to ask for a “training” trip to the U.S.,
preferably somewhere like Las Vegas. They would expect
to fly business class and stay in five-star accommodation
and to have sight-seeing tours and various forms of
entertainment provided to them. They would, of course, be
accompanied by their wives or other loved ones. Only after
this trip would they consider doing business with an
American company.
The Department of Justice (DoJ) has issued guidelines to
make U.S. companies overseas very much aware of what
they can and cannot give in the way of gifts or provide on
training trips. As an investigator you should certainly make
yourself aware of the provisions of the FCPA and how it
might relate to you when working overseas.
Just be aware that an American CFE and his wife were
recently jailed in Mainland China for allegedly breaking
local laws in obtaining information for GlaxoSmithKline to
try to prove corruption. The documents they obtained were
deemed to be “state secrets,” and they were jailed. My
colleague Ron Yu will deal with this in his section.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 10
NOTES In Summary
For a successful investigation overseas, plan carefully,
especially in determining and choosing your resources very
carefully and, above all, obey the laws. Be well aware of
privacy laws when gathering and handling documents, and
when interviewing people, and be careful not to breach
local laws such as government State Security laws,
especially when examining potential bribery and corruption
violations.
Now, let me hand you over to my colleague, Ron Yu, who
will specifically address some of the legal aspects of
obtaining and handling digital data in overseas countries.
GO RON!
Ronald Yu, J.D., CFE
Getting the Digital Data
It’s quite obvious that to do any sort of e-discovery, you
need to successfully acquire the data—but an international
digital investigation presents its own set of additional
challenges.
When investigating internationally, it is helpful to have the
right software version with, for example, double-byte
character support for Asian languages, the proper character
sets installed on your computer if it is necessary to review
any foreign language content, and—if you don’t read the
local language—someone whom you trust to help you with
file names or other foreign language content.
But there are other critical matters that must not be
overlooked.
First, if multiple sites in different geographic locations are
involved, it is important to make realistic plans, starting
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 11
NOTES with locating the different sites on a map, keeping in mind
that two places that appear close together on a map may not
actually be physically close to one another in real life.
Also keep in mind that timely travel between these two
points may be difficult or even impossible because of
limited transport options, physical infrastructure, and
geographical or other barriers.
The time you are physically travelling is also important
because of potential weather-related delays (depending on
the month involved) and traffic jams (depending of the time
of day and the place).
Many overseas cities are famous for their traffic delays;
some literally shut down during typhoons, snow, or even
heavy dust storms. In October 2013, the Chinese city of
Harbin literally shut down because of air pollution. Do your
homework before visiting any overseas location.
Lastly, if your travel involves multiple countries, also
factor in the time it takes to get in and out of an airport, and
the time of the day when you can physically travel from the
airport.
Unless you have an international driving license and can
actually drive between sites, assume that you will need to
use some form of public transport. This presents other
practical challenges.
Firstly, because you will be carrying equipment that is not
insignificant in terms of size and weight, you will need to
pack light. That is, do not bring an excess of clothing or
other personal items, but at the same time do not skimp on
necessities.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 12
NOTES I once encountered a manager who thought that because we
were travelling from a location in South Asia to one in
North Asia in the middle of February, what he was wearing
for one location was suitable for the other, because these
places both happened to be in the same time zone. This
would be akin to assuming that Maine and Florida are the
same temperature in winter, simply because they are on the
East Coast of the United States.
Thus, remember to bring appropriate clothing, travel
umbrellas, and any necessary medicines. Be prepared to
deal with stomach upset in unfamiliar locations. If in doubt
about, for example, the safety of the water, drink hot rather
than cold beverages.
The other reason to pack light is that you may not be able
to carry much onboard your flight, which of course will
affect the time needed to transit in and out of and through
airports. Although many international airports impose
restrictions on the size of a carry-on bag, many airplanes,
particularly those used on local domestic flights, lack the
physical shelf or bin space for even a medium-sized carry-
on.
Finally, with respect to airports, be aware that many
airports are notorious for flight delays, and getting from
one part of an airport to another is not always
straightforward—so do your homework before you travel
and incorporate contingencies in your planning.
Once you are out of the airport, you also must deal with
ground transport, typically taxis, which may be very small.
In some cities, for instance, taxis are smaller than your
average Honda Fit.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 13
NOTES When travelling to different locations, ensure you have the
names of the sites, your hotel, etc., in the local language.
Make note of any local customs, religious beliefs, major
holidays, etc. Meals may be hard to come by in certain
places at certain times of the day because of religious
holidays, commercial laws, or other reasons.
Remember to bring the appropriate power adapters. You
may also need to know where you can buy electronic
equipment, in case your equipment breaks down or if the
equipment you brought is unusable for whatever reason.
Be aware that usage habits differ from place to place,
which may complicate investigations. For instance, in
China, many people do not use a company email (such as
[email protected]), but rather external providers (for
instance, 126.com or 163.com), and external social media
(such as sina.weibo) for their communications, business, or
otherwise.
Finally, remember that in an international environment you
must conduct yourself in accordance with local laws and
customs. Any investigator must be able to get around the
location he or she is working in, and in the case of women,
certain locations may pose special concerns because of
safety or other restrictions on their normal movements.
Part Two
Once you get physical access to the data, you then face a
problem of legal access; there are relevant privacy,
intellectual property, and state secrets laws—as well as
objections from overseas counsel, particularly if you are
working for an opposing side in litigation proceedings, all
of which can impact an investigation.
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 14
NOTES Though, as an investigator, you will not be asked to, nor
can you, provide legal opinions with respect to digital
forensics investigations unless you are qualified to do so, it
helps to understand the legal challenges you might face
when conducting an overseas search, imaging, and analysis.
Let’s start with evidence gathering: as you will be
conducting investigations, or at least capturing and imaging
data in a foreign jurisdiction, foreign—not American—
laws apply. In America, courts view discovery as an
instrument to “make a trial less a game of blind man’s bluff
and more a fair contest.”1
But in some other countries, not
only does the concept of American style-discovery not
exist, but some foreign counsel are downright hostile
toward it.
Overseas judges, legal professionals, and laws elsewhere
might not take as broad a view of discoverable information
as their American counterparts.
In Chinese litigation, for example, parties only need to
present sufficient evidence to support their claims; there is
no obligation to offer evidence to support the opponent’s
claims or defenses or any other adverse evidence. Though a
judge or arbitrators can order up a delivery of evidence,
obtaining it from the other side is not easy.
As many overseas counsel are often unfamiliar with
American-style discovery, they are frequently surprised and
unprepared for the breadth of discovery permitted in U.S.
litigation. Foreign management may also regard American-
style discovery as an invasion of the company’s private
operations and thus may be reluctant to comply with
1 United States v. Procter & Gamble Co., 356 U.S. 677, 682-83 (1958).
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 15
NOTES requests for internal company emails, digital files,
documents, or information containing confidential and
proprietary company information. They might view such
requests as a “fishing expedition,” asking for all the
evidence available in an attempt to find anything of
potential use.
In addition, overseas companies are often unaware of issues
of spoliation of evidence. For example, they may not
realize that that once the litigation has commenced, or is
even threatened, a company has an obligation to preserve
discoverable evidence.
Many overseas managers might order immediate deletion
of files or destruction of media, not realizing that if
documentary evidence is destroyed or lost after litigation is
threatened or commenced, the other side could use this as
proof that the party destroyed evidence unfavorable to its
case.
Even if management does not order immediate deletion of
electronic evidence, it might forget about, for example,
policies and automated procedures to delete email
messages and other electronic files that are more than one
to two years old, and—unless the company has issued
notice to everyone in the company to preserve electronic
data until the litigation is complete—important digital
evidence may be lost.
Thus, in conducting digital investigations abroad, it is
important that the relevant counsel—and relevant
management—understand the need to comply with
discovery requests and that undue or excessive delay could
have serious negative repercussions. They need to
understand that a company failing to comply with such
requests in a timely manner may face potential civil and
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 16
NOTES criminal sanctions and that an American court may draw
unfavorable inferences if, for instance, one side refuses or
is unable to produce a digital document or file that an
opposing side contends is important.
Yet there may be valid reasons for objecting to disclosure.
For example, if the requested information enjoys attorney-
client privilege, a party may object to disclosure on that
basis—nor is any work produced by an attorney in
preparation for trial discoverable. An opposing party would
likely argue, with some justification, that producing
information in violation of local law is unreasonable and
unduly burdensome.
Reconciling various conflicting aims might thus directly
impact your legal ability to collect digital information.
The scope and extent of your investigation might be
affected by which set of discovery rules apply. Under U.S.
law, parties may agree to discovery under either the Federal
Rules or the Hague Convention on the Service Abroad of
Judicial and Extrajudicial Documents in Civil or
Commercial Matters—more commonly known as the
Hague Service Convention—or diplomatic channels. If a
foreign party is within the U.S. court’s jurisdiction,
however, an American court may allow discovery to
proceed under the Federal Rules, which are faster and result
in broader disclosure of information than under the Hague
Service Convention.
However, the problem is that the former may be illegal
under foreign laws. For example, P.R.C. law only permits
U.S. litigants to obtain evidence from within China
pursuant to the Hague Service Convention or diplomatic
channels.2
2 See: Art. 261 of China’s Civil Procedure Law
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 17
NOTES On this basis alone, a foreign party would prefer to
discovery under the Hague Service Convention to avoid the
risk of disclosing information in violation of local law. The
practical implication is that the scope of your search may
be more restrictive under the Hague Service Convention.
But there are other laws that impose restrictions on foreign
companies and individuals in disclosing certain types of
information, such as state secrets, trade secrets, and private
personal information.
For example, the P.R.C. Law on Guarding State Secrets
prohibits a company or individual from disclosing
information considered to be a “state secret.” The problem
is that the definition of a “state secret” is subject to wide
interpretation.
Under Chinese law, state secrets are defined as “matters
that have a vital bearing on state security and national
interests and, as specified by legal procedure, are entrusted
to a limited number of people for a given period of time.”
Thus, a state secret could include any information relating
to state security and whose disclosure could harm state
security or interests in policy decisions on state affairs,
national defense, and the armed forces, diplomatic
activities, the economy, social development, foreign affairs,
criminal investigations, science and technology, and other
matters that are classified as state secrets by the relevant
department. Even information relating to internal policies
and procedures of a company may be considered state
secrets under P.R.C. law.
Consequently, many overseas individuals and companies
may be reluctant to grant access to data they perceive as
state secrets. If you recall the 2003 SARS epidemic, one
problem was the reluctance of Mainland officials and
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 18
NOTES health professionals to release data on the SARS epidemic
for fear they would release state secrets. Even today,
China’s Environment Ministry recently refused to publish
soil pollution figures on the grounds that they are a state
secret.3
Chinese companies involved in sensitive industries such as
telecommunications, banking, information technology,
energy, and natural resources are particularly at risk of
possessing state secrets, and overseas companies might
need to consult with relevant authorities to determine if any
of the information sought is or should be designated a state
secret.
You also need to consider laws protecting private personal
information.
A growing number of overseas jurisdictions have enacted
laws to restrict collection, use, and retention of personal
data. Most of these laws, such as Hong Kong’s Personal
Data (Privacy) Ordinance4 define personal data as any data
that directly or indirectly relates to a living individual
where one could, without much trouble, ascertain the
individual’s identity and that is in a form where the data
could be processed, again without much problem.
The implications of privacy laws are that:
There may be restrictions on what data you can collect
and how you handle the data.
3 Peter Ford, “Looking back on the SARS outbreak, China's response,”
The Christian Science Monitor, March 13, 2013,
www.alaskadispatch.com/article/20130313/looking-back-sars-
outbreak-chinas-response. 4 CAP. 486
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 19
NOTES Information that you might want to collect may be
deleted as part of a company’s or an ISP’s data privacy
obligations
There may be restrictions on the export of data. For
instance, Article 5.4.5 of Information Security
Technology, Guidelines for Personal Information
Protection Within Public and Commercial Services
Information Systems, states that:
“Absent express consent of the subject of the
personal information, or explicit legal or regulatory
permission, or absent the consent of the competent
authorities, the administrator of personal
information shall not transfer the personal
information to any overseas receiver of personal
information, including any individuals located
overseas or any organizations and institutions
registered overseas.”
Finally, there might be information relating to trade secrets
that might be owned by a third party, both of which may
not be disclosed without consent.
Trade secrets are defined as any valuable commercial
information that provides a business with an advantage
over competitors who do not have that information.
They can include inventions, ideas, or compilations of data,
such as useful formulae, plans, patterns, processes,
programs, tools, techniques, mechanisms, compounds, or
devices that are not generally known or readily
ascertainable by the public. Whatever type of information
is represented by a trade secret, a business must take
reasonable steps to safeguard it from disclosure.
As investigations become increasingly international,
overseas investigations will become more common. Yet,
such investigations present new set of logistical, legal, and
practical challenges—not to mention cultural norms you
PRACTICAL TIPS FOR OVERSEAS INVESTIGATIONS
2014 ACFE Asia-Pacific Fraud Conference ©2014 20
NOTES will need to be aware of that we didn’t have the time to
cover.
When investigating overseas, never forget that you are
operating under a different set of rules and that a breach of
foreign laws can have serious consequences. But the
international opportunities are out there for those willing to
learn new rules, new skills, and new tricks. You need to do
your homework ahead of time, be flexible—and not over-
pack.