What is a dawn raid?
A dawn raid is an unannounced visit by a government authority for the purpose of conducting an investigation. In the antitrust and merger control context, authorities generally rely on pre-scheduled inspections, document requests, interrogatories and interviews to gather information and documents required for an investigation. Authorities have, however, increasingly relied on dawn raids using the element of surprise to obtain accurate information and documents.
In Nigeria, the Federal Competition and Consumer Protection Commission ("FCCPC") has employed dawn raids as part of its rulemaking and investigation processes. It is anticipated that dawn raids by FCCPC will continue to increase. As the competition regulatory regime continues to develop, FCCPC will publish more regulations. This means there will be increased oversight, enforcement and investigation of antitrust violations. Dawn raids pose certain risks to the subject company, including interruption to the company's business, negative publicity, suspension of major business transactions and lower investor confidence. It is therefore imperative that a company is aware of the procedure and well positioned to prepare for a dawn raid.
What occurs during a dawn raid?
As the term suggests, dawn raids typically occur early in the morning. A dawn raid could however occur at any time of the day. Upon arrival at the company, the FCCPC officers will identify themselves and announce the purpose of the raid. They will then proceed to conduct inspection of the premises. The inspection may include documents, inventories, servers, CCTV footages, production equipment, email records and file cabinets. The inspection may also include employee interviews. The officers of the FCCPC may be accompanied to the raid by members of the press.
Can FCCPC enter a premise for inspection, search and
Section 27 of the Federal Competition and Consumer Protection Act ("Act") empowers FCCPC to enter and search any premises for the purpose of ascertaining whether any conducts are in contravention of the Act. The power may be exercised with a warrant or without a warrant depending on the circumstances of the inspection.
With a warrant
FCCPC must obtain a warrant issued by a Judge of the Court of Appeal before conducting a raid. The warrant authorizes an officer of the FCCPC to enter and search any premises, and to inspect and detain any documents or articles in possession or under the control of any person. The authorized officer must execute the warrant within 30 days of the issuance and the warrant can be used only once. The warrant should specify the premises to be searched and a time-limit beyond which articles or documents removed from the premises cannot be detained.
Although the Act requires that the warrant be executed at a reasonable time, the term is not defined, leaving the determination of what is reasonable to FCCPC's discretion.
An officer executing the warrant must:
- be in possession of the warrant at the time of execution,
- produce it on initial entry, and if requested, at any subsequent time,
- produce a valid identification to the owner or occupier of the premises if that person is present, and
- if a document or article is removed from the premises, leave a schedule containing a list of documents or articles that were removed.
If FCCPC has grounds to believe that a violation of the Act (including regulations made under the Act) has or will be committed, it may, as an interim measure, authorize an officer to conduct a search of the premises. The Executive Vice Chairman must depose to an affidavit verifying the facts of the said ground before the search can be conducted.
What obligations exist for owners/occupiers of the premises?
The Act requires the occupier or person in charge of the premises to provide all reasonable facilities and assistance for the effective execution of the search. The Act makes it an offence to obstruct or impede an authorized officer in the execution of the search. A person convicted of such offence is liable to imprisonment of a term not exceeding two years or to a fine not exceeding N5,000,000 or both fine and imprisonment. The employees of the company should avoid taking any steps that may be construed as obstruction, such as destruction, concealment and falsification of documents.
How to prepare for a dawn raid
- Train all employees to prepare including how to engage with the authorized officers. All key employees of the firm who are likely to interact with the authorized officers should have access to all information or documents that may be requested during the search
- If possible, set up a dawn raid response team who have the knowledge and authority to interface with the FCCPC raid team
- Have a proper record of all documents and articles used in the course of business. With a proper record and filing system, employees will promptly provide requested documents and make the duration of the raid brief so that the company can return to its day-to-day business. The documents should be filed in a manner that allows the firm to grant the FCCPC raid team access to only documents relevant to the investigation. This is important to ensure that the raid team only sight documents relevant to the investigation
What to do during a dawn raid
- Confirm the identity of the riad team as authorized FCCPC officers. The response team should request proof of identification
- Confirm the authority of the authorized officer to conduct the search. Request for either a warrant (for searches with warrant) or sworn affidavit of the Executive Vice-Chairman (for searches without warrant)
- Be courteous to the authorized officers. Avoid any conduct that may be construed as obstruction of the search including stopping the raid team from entering the company, except there is a legitimate dispute as to the authority of the officers or the validity of the search warrant
- Contact the firm's attorneys. The company should have an in-house legal department or external counsel familiar with dawn raids. The external counsel should have been retained and briefed on the company's activities before a dawn raid occurs
- If possible in the circumstance, request that the authorized officers wait until the attorneys arrive before commencing the inspection
- Keep a detailed record of the seized documents and articles, if any. A member of the dawn raid response team should be responsible for taking down notes and compiling a detailed record of everything that occurred during the raid, including seized items, inspected items and list of employees that were interviewed
Immediately after the dawn raid, the response team should debrief with legal counsel and consider the appropriate legal steps to take.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.