Internal company investigations are becoming increasingly relevant!

Perpetrators and managers in the focus of investigating authorities

In re­cent years, com­pa­nies have in­cre­asin­gly found them­sel­ves in the sights of in­ves­ti­ga­ting aut­ho­ri­ties. While pu­blic pro­se­cu­tors used to pro­se­cute al­most ex­clu­si­vely the ac­tual "in­ter­nal of­fen­ders" in ca­ses of in­itial cri­mi­nal su­spi­cion, they are now in­cre­asin­gly ex­ami­ning the ex­tent to which com­pany ma­na­gers have re­ac­ted ade­qua­tely to pos­si­ble su­spi­ci­ons of cri­mi­nal of­fen­ses in their com­pany.

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In­ade­quate mea­su­res of­ten lead to ac­cu­sa­ti­ons of cri­mi­nal lia­bi­lity for failure to act or at least a bre­ach of the duty of su­per­vi­sion. If the tran­sac­tion trig­gers tax con­se­quen­ces, the aut­ho­ri­ties also check whe­ther the cor­rec­tion ob­li­ga­tion has been bre­ached and, ac­cor­din­gly, whe­ther the ma­nage­ment is lia­ble to pro­se­cu­tion for tax eva­sion.

Further explosive effects of the Whistleblower Protection Act and the Supply Chain Due Diligence Act

The man­datory im­ple­men­ta­tion of new and se­cure chan­nels for re­por­ting po­ten­tial grie­van­ces fol­lo­wing the Whist­leb­lo­wer Pro­tec­tion Act or the Supply Chain Due Di­li­gence Act will lead to an in­crease in re­por­ted in­ci­dents, which must be as­ses­sed by the com­pany ma­nage­ment and con­tain do­cu­men­ted in­for­ma­tion on any com­pli­ance-re­le­vant pro­ces­ses. It is the­re­fore very im­port­ant for those re­spon­si­ble to in­ves­ti­gate pos­si­ble su­spi­cious si­tua­ti­ons im­me­dia­tely and not to make any mis­ta­kes - an al­most im­pos­si­ble task for a le­gal lay­per­son.

Internal company investigations - but how?

Car­ry­ing out the ne­cessary in­ves­ti­ga­ti­ons po­ses ma­jor chal­len­ges, es­pe­cially for me­dium-si­zed com­pa­nies, as - un­like many large cor­po­ra­ti­ons - they do not have spe­cia­li­zed de­part­ments or em­ployees for this pur­pose due to their size. Due to the ob­jec­tive in­de­pen­dence and neu­tra­lity re­qui­red in the in­ves­ti­ga­tion of any wrongdoing, con­flicts of in­te­rest can also arise due to over­laps in the areas of re­spon­si­bi­lity and com­pe­tence.

Wide range of criminal offences in companies

In ad­di­tion to the "clas­sics" of cor­po­rate of­fen­ses such as cor­rup­tion, bre­ach of trust, ba­lance sheet ma­ni­pu­la­tion, or em­bez­zle­ment, ha­rass­ment in­ci­dents can also be re­le­vant un­der cri­mi­nal law.

Ir­re­spec­tive of the spe­ci­fic al­le­ga­tion, nu­me­rous le­gal and or­ga­ni­sa­tio­nal pit­falls must be ta­ken into ac­count in the course of the in­ves­ti­ga­tion, which may re­quire the in­vol­ve­ment of fur­ther ex­per­tise, e.g. from em­ploy­ment law, an­ti­trust law, or data pro­tec­tion law, in ad­di­tion to cri­mi­nal law know-how. Ac­coun­ting and tax is­sues of­ten also need to be cla­ri­fied promptly.

Document the process precisely, observe deadlines

The first step in any in­ter­nal in­ves­ti­ga­tion should be to check which spe­ci­fic of­fen­ses may be in­vol­ved. This should be do­cu­men­ted ac­cor­din­gly. Wi­thout such mea­su­res, no mea­ning­ful and tar­ge­ted in­ves­ti­ga­tion can take place.

Note: The in­itial ca­te­go­ri­sa­tion may need to be ad­jus­ted over time due to ad­di­tio­nal or other fin­dings ob­tai­ned in the course of the in­ter­nal in­ves­ti­ga­tion.

This clas­si­fi­ca­tion not only de­ter­mi­nes the le­gal frame­work of the in­ves­ti­ga­tion but must also be en­su­red at an early stage that any re­por­ting and no­ti­fi­ca­tion dead­lines that may arise from cri­mi­nal law, tax law, or la­bour law are ob­ser­ved. In prac­tice, com­pany ma­na­gers are of­ten held ac­coun­ta­ble for er­rors in this re­gard.

Of­fen­ces such as cor­rup­tion or bre­ach of trust in par­ti­cu­lar are ex­tre­mely com­plex, mea­ning that an ex­ami­na­tion of the facts is ne­cessary at an early stage. It is not un­com­mon for po­orly fo­cu­sed in­ves­ti­ga­ti­ons to re­sult in un­ne­cessary costs that ul­ti­mately re­quire ex­ten­sive fol­low-up work.

La­bour law mea­su­res against a po­ten­tial of­fen­der must be ta­ken with cau­tion. Even if there may be a strong de­sire to ter­mi­nate the em­ploy­ment con­tract as soon as pos­si­ble, mis­ta­kes in the in­ves­ti­ga­tion can be very ex­pen­sive and even jeo­par­dise the re­sults of the in­ves­ti­ga­tion com­ple­tely.

Means of internal investigations

In­ves­ti­ga­tive mea­su­res wi­thin the scope of an in­ter­nal com­pany in­ves­ti­ga­tion usually in­clude pro­cess re­cor­dings, em­ployee in­ter­views, ques­tio­ning/hea­ring the pos­si­ble "per­pe­tra­tor" (so-cal­led fo­ren­sic in­ter­views), back­ground re­se­arch on na­tu­ral and le­gal per­sons, eva­lua­ting and ana­ly­sing struc­tu­red and un­struc­tu­red data, con­duc­ting e-mail re­views, in­spec­ting the work­place and, of course, re­viewing do­cu­ments. The type and struc­ture of the spe­ci­fic in­ves­ti­ga­tive ac­tivi­ties must be in­di­vi­dually de­si­gned for a suc­cess­ful in­ter­nal com­pany in­ves­ti­ga­tion and de­pend in par­ti­cu­lar on the po­ten­ti­ally re­le­vant of­fen­ses, the avail­abi­lity of in­for­ma­tion sour­ces, le­gal frame­work con­di­ti­ons and time re­qui­re­ments.

The nu­me­rous le­gal re­qui­re­ments should be ob­ser­ved in all steps - for ex­am­ple, an un­aut­ho­ri­sed re­view of an em­ployee's email ac­count can quickly lead to cri­mi­nal lia­bi­lity.

An in­ter­nal com­pany in­ves­ti­ga­tion "state of the art" fol­lows a struc­tu­red in­ves­ti­ga­tion stra­tegy that har­mo­ni­ses and coor­di­na­tes the in­ves­ti­ga­tive mea­su­res ad­ap­ted to the in­di­vi­dual case and ta­kes into ac­count the le­gal and time frame. Only in this way can the in­ves­ti­ga­tive mea­su­res lead to suc­cess and (le­gal) pit­falls be avo­ided

Involvement of investigating authorities

In ad­di­tion to the in­ter­nal cla­ri­fi­ca­tion mea­su­res, it must be che­cked th­roug­hout whe­ther, and if so, at what point in time, the in­ves­ti­ga­ting aut­ho­ri­ties should be in­for­med of the events. If there is an ob­li­ga­tion to re­port, the re­le­vant aut­ho­ri­ties should cer­tainly be con­ta­cted at an early stage. It may also be ad­visa­ble for the com­pli­ance cul­ture in the com­pany to re­port cer­tain mat­ters. A de­ci­sion must be made on a case-by-case ba­sis.

In any case, sur­prise vi­sits by the aut­ho­ri­ties should be avo­ided whe­re­ver pos­si­ble. Se­ar­ches are cer­tainly one of the most un­plea­sant events that a com­pany can en­coun­ter. Howe­ver, such mea­su­res can of­ten be avo­ided by con­duc­ting a com­pre­hen­sive in­ter­nal in­ves­ti­ga­tion into pos­si­ble cri­mi­nal of­fen­ses and coope­ra­ting with the in­ves­ti­ga­ting aut­ho­ri­ties in this con­text.