TODAY’S Legally Speaking column gives an insight into “dawn raids”.
What is a dawn raid
A dawn raid is an unannounced inspection by enforcement authorities at the premises of a business under investigation. Dawn raids are typically carried out at the start of the business day, i.e. around 9am, to surprise and catch a business off-guard, and to ensure that evidence is not tampered with, concealed or destroyed.
In Malaysia, dawn raids may be carried out by various enforcement agencies, including Malaysian Competition Commission (MyCC), Malaysian Anti-Corruption Com-mission (MACC), Inland Revenue Board (IRB) and the Royal Malaysian Police.
These enforcement agencies are empowered, under various legislation including the Competition Act 2010, the Malaysian Anti-Corruption Commission Act 2009, Income Tax Act 1967 and Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, to conduct such activities.
Although there may be variations in the types of authorities and legal justifications involved, all dawn raids comprise certain similarities.
What happens during a dawn raid
Generally, unless otherwise allowed by specific laws, a search warrant is required for enforcement authorities to conduct a dawn raid. During a dawn raid, these officials will have full and free access to search business premises including lockers, desks, safes, vehicles, computers, servers and even company mobile phones. They can take copies (or originals) of documents and question employees, as long as it is within the scope of their warrant.
Businesses are duty bound to cooperate with the enforcement authorities – any person who obstructs an officer during a dawn raid may be subject to fines and criminal sanctions.
It is important to note that enforcement authorities are not allowed to inspect or remove any document that is legally privileged. This would mean that communications between a business and its external lawyers would be protected from enforcement authorities during a dawn raid.
At the start of the raid, the in-house/external lawyer should attempt to speak to the officer in-charge and agree on the sequence and scope of the raid. It is also important that each officer is shadowed by a lawyer during the raid, to ensure that they do not exceed the scope of their authority. While the business may request that the enforcement authorities wait for its in-house/external lawyers to arrive before starting the raid, they are not obliged to do so and should not be obstructed if they insist on proceeding.
How to prepare for a dawn raid
It is critical that all employees are properly trained to deal with the respective enforcement authorities, and have a clear understanding of the specific data collection powers of each enforcement authority. They must also know what the potential limits of such raids are, particularly when accessing personal information.
Businesses should implement internal dawn raid protocols – essentially, creating checklists specifying the processes and procedures to be followed by employees from the receptionist, security personnel, designated executives, to in-house/external lawyers. Businesses may also engage external lawyers to conduct mock dawn raids to test the effectiveness of these protocols and ensure that employees are prepared when the enforcement authorities arrive.
A dawn raid can happen to any business, and a business unfamiliar with its process may unknowingly commit illegal acts during the raid, which could expose the busiKLness to heavy sanctions. It is recommended that all businesses consult their lawyers to become familiar with, not just their legal obligations, but also how to handle dawn raids, should they occur.
This article was contributed by Arthur Ng of Christopher & Lee Ong (www.christopherleeong.com).
