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Dawn raids: are you prepared?

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Early on Wednesday morning, while the majority of us were only just beginning our day, some 180 HMRC investigators were deployed to a number of premises pertaining to two prominent English football clubs, including a coordinated raid of a French football club by the authorities in France.
The dawn raid officers appear to have known exactly what they were looking for and have been reported as having seized business records, financial records, computers and mobile phones.
Given the new legislation due to come into force later this year, which creates a new criminal offence of failing to prevent the facilitation of tax evasion, this dawn raid acts a stark warning from HMRC to other companies. This adds to the list of dawn raids carried out in the past year by the likes of the FCA and SFO, in an environment where the Authorities are clearly committed to fighting corporate crime.
An unannounced visit will create major disruption for a business and may potentially trigger protracted proceedings, fines and arrests. Often, officers will arrive at premises early in the morning when the only people there to meet them are secretaries, security staff or cleaners. The ability of a company to be prepared to deal with, in particular, the first hour of a dawn raid is therefore essential.
Is your company ready? Here are our top ten tips for companies when officers come knocking at the door:
  1. Where possible, move the officials to a separate meeting room, ensuring that the room is free of any confidential information, including files and computers. Offer them tea and coffee!
  2. Call your legal advisers immediately.
  3. Politely request that the officials wait until your legal advisers arrive and assure them that you are going to be co-operative. Officials will usually wait for a reasonable amount of time before they begin their search. If they instead decide that they want to begin, do not interfere.
  4. Request a copy of the warrant to allow you to check the terms and scope, and seek to agree a methodology for the search with the senior officer. In the meantime, provide a copy of the warrant to your legal advisers.
  5. Alert and assemble your internal response team. Hopefully you will already have policies and procedures in place to deal with a dawn raid, and will already have identified the key individuals forming the internal response team, including, where applicable, in other offices and countries.
  6. Try to establish in which locations the raid may also be taking place. Note that in certain circumstances, officials may also be entitled to have access to non-business premises where, for example, business documents or IT equipment may reasonably be stored, such as personal homes and cars.
  7. Do not obstruct the officials, or destroy or hide documents: doing so could be a criminal offence! Equally, do not casually provide the officials with information.
  8. Make a list of documents seized/copied by the inspectors. Where possible, take copies of all documents looked at or seized by the officials.
  9. Arrange for members of staff – preferably the internal response team – to shadow the officials, taking notes of anything they say, ask or look at.
  10. Ensure as far as possible that no legally privileged documents are seized/copied. Where there is a dispute, request that these items are placed in a sealed envelope for later consideration by an independent third party.
Lastly, don’t panic and be prepared to challenge! Hold the fort until your legal advisers arrive. 
Tony Katz & Alessio Marchetti, DLA Piper
Issue: 1353
Categories: In brief