Investigations in Developing Countries

Investment and economic activity are rapidly rising in developing areas of the world. Africa, for example, is now the world's fastest growing continent with average GDP growth of 5.5% in the last 10 years; it is home to six of the fastest-growing economies in the world and is predicted to have a larger workforce than China by 2040. See Ashish J. Thakkar, “The Lion Awakes, Adventures in Africa's Economic Miracle” 53 (St. Martin's Press 2015). With this situation, U.S. lawyers will be increasingly called upon by their clients with overseas interests to conduct internal investigations into the full range of conduct that can trigger such inquiries at U.S. companies ' earnings manipulation, commercial bribery, accounting frauds and payments to political figures, to name a few. Planning for and conducting these assignments can present huge challenges, yet they are professionally rewarding and provide the U.S. practitioner with a unique perspective on cultural and business practices in emerging areas of the world.

Getting Cleared for Takeoff

Internal investigations are often triggered by an alarmed client who wants answers yesterday. But the practitioner will confront an array of travel requirements that must be met before a flight can even be booked.

Visas

Visa requirements in the developing world can be cumbersome and complex, and are frequently changed. Angola, for example, requires: a completed application form, a letter from the applicant explaining the purpose and nature of the visit, a notarized letter of invitation written in Portuguese, a pre-paid itinerary, proof of yellow fever vaccination, a “guarantee of means of subsistence” showing $200 for each day to be spent in the country, and a copy of the hotel reservation affixed with the hotel's official stamp. The application can take five to seven business days and must be submitted in person to the Angolan Embassy. Cameroon's process is more or less discretionary, with visas issued “as deemed appropriate by the Embassy of Cameroon.” Some countries' visas permit only a single entry, while others allow multiple entries. This is an important consideration if there is any possibility that the practitioner will be required to pursue the investigation in a country other than where it began and then to return to the first country at a later date.

Inoculations

A consultation with a travel medicine specialist is mandatory. This medical provider will have current information on required and recommended inoculations and preventative medicines, which, depending on the destination, can include polio, typhoid, hepatitis, rabies, malaria, and yellow fever. An International Certificate documenting the date the yellow fever vaccination was administered is required for entry into many countries in Sub-Saharan Africa. Malaria medication is taken before the traveler departs the United States and for as much as a week upon return. A word of caution: Certain malaria medications can cause neuropsychiatric symptoms such as dizziness, insomnia, anxiety, nightmares and even hallucinations. The trip will be stressful enough, so it is a good idea to know exactly what drug is prescribed and to be aware of the range of possible side effects.

The travel medicine specialist will also provide current information on food and water precautions, of which there are many in the developing world ' including never drinking local tap water ' and strategies for preventing local diseases. It is good advice to leave the United States with a sufficient supply of an antibiotic such as ciprofloxacin to treat a wide variety of local intestinal maladies. Bring a sufficient supply of prescription medicines to last the entire trip, because even many common medications are unavailable in the developing world.

Non-prescription, over-the-counter medicines may contain ingredients that appear on a country's banned substance list. For example, the State Department warns that the Zambian Drug Enforcement Commission has detained U.S. citizens and confiscated their passports for possession of antihistamines such as Benadryl and other over-the-counter medications, which contained small quantities of diphenhydramine, an active ingredient that is on Zambia's list of controlled substances. The State Department advises that U.S. citizens visiting Zambia consider leaving such medications behind.

Medical Insurance

The medical infrastructure in many emerging nations is not at the level to which U.S. lawyers are accustomed. Medical facilities are limited even in major cities, and are even more restricted in outlying provinces. In Sub-Saharan Africa, serious illnesses or accidents may require medical evacuation to another country, like South Africa. The practitioner must have medical insurance that covers these services in the destination country.

Registration with the Department of State

The U.S. Department of State administers the Smart Traveler Enrollment Program (STEP) (https://step.state.gov/step), which provides travel advice and information for specific countries and permits U.S. citizens to register their trip with the local U.S. Embassy. Registration enables the traveler to receive information from the embassy about safety conditions, natural disasters and possible civil unrest, and provides a way for family or colleagues in the United States to make contact in an emergency. Reviewing the website for specific travel information and warnings is imperative. The listing for Zimbabwe, for example, advises that “the political, social, economic, and security situation … is unpredictable and could deteriorate quickly without warning,” and that because “the government may use force to disperse civilian demonstrations and protests, U.S. citizens should avoid all crowds, public demonstrations, and protests.” Criticism of the Zimbabwean president is a crime, and taking photographs of certain government buildings in the capital, Harare, is strictly forbidden. On the theory that forewarned is forearmed, even the most seasoned traveler should consult the Department of State website before departing.

On the Ground

Even after all required visas are procured, inoculations administered and the trip registered with the Department of State, U.S. counsel will still have to deal with a long list of obstacles and inconveniences, inlcuding the following.

Electrical power outages continue to plague many developing countries and can be a significant obstacle in conducting business. Even large, urban centers like Dar es Salaam in Tanzania, and Harare in Zimbabwe, suffer power blackouts on a regular basis, sometimes lasting more than 24 hours. These outages are predicted to get worse over time. See, e.g., Muharram Macatta, “Why Electricity Outages in Dar es Salaam?” Business Times (May 22, 2015), http://bit.ly/1XZN34w. Portable external battery packs can provide a reserve of power for critical electronic devices, such as laptops and cell phones, while ensuring voltage compatibility. They are a must-have for the U.S. practitioner.

Even when the electricity is up and running, power outlets in African countries are not compatible with electrical plugs from the United States. The United States uses a Type A and Type B power adapter, while many African countries use a combination of Type C, Type D, Type G, and Type M adapters. Devices in the United States run on 110/125 volt electricity while the majority of the world runs on 220/240 volts. Some devices may require a transformer ' as opposed to just a converter ' to ensure electrical compatibility. Pack a full range of electrical converters and transformers.

Traffic is another consideration. Severe traffic congestion plagues many cities in Sub-Saharan Africa. Roads are jammed with cars, buses, trucks, bicycles, rickshaws, mopeds and “tuk tuks.” Traffic is often frozen, and it can take an inordinate amount of time to travel even short distances. Appointments are missed and meetings are delayed or canceled. The practitioner must plan for and work around these conditions to maintain efficiency and stay on schedule for the completion of the assignment. (In 2010, it was estimated that Dar es Salaam, Tanzania lost about $2,500,000 daily due to decreased productivity, wasted fuel and late delivery of products due to traffic jams. See Elias Mhegera, “Tanzania: Dar Starts Modern Bus Service to Check Traffic Jams,” ITSSA (Oct. 5, 2015), http://bit.ly/1QtZZyT. Roads can be particularly hazardous. In Nigeria, for example, there are 1,000 deaths per 100,000 cars on the road. An experienced, private driver with a safety-equipped car is essential.

Language Barriers may, of course, prove troublesome. Although English is widely spoken in Sub-Saharan Africa, there are a many local languages and dialects that will have an impact on the way in which employee interviews are conducted. For example, Swahili and English are the official languages for Tanzania, but there are dozens of tribal languages still in use. Conducting an interview in the employee's own language may make the employee feel less anxious, will help establish rapport and may reduce the potential for miscommunication. It can be more effective to work with local consultants and forensic firms that actually speak the employees' language rather than relying on a retained translator. The decision whether to retain the U.S. entity and have it bring in local teams or to retain the local office directly is important, as there may be internal risk controls and logistical obstacles to working with the U.S. entity that are not at issue when the local office is retained directly.

Food and water precautions must also be taken. The Center for Disease Control (CDC) recommends that travelers to certain African countries avoid food served at room temperature, unwashed or unpeeled raw fruits and vegetables, “bushmeat” (monkeys, bats, or other wild game), tap or well water, ice made with tap or well water and drinks made with tap or well water. See Health Information for Travelers to Tanzania, including Zanzibar, http://1.usa.gov/1TZJz1s. The warnings about tap water cannot be overstated. Even brushing one's teeth with tap water can lead to intestinal problems.

Conducting the Investigation

As with any assignment in a foreign country, the U.S. practitioner should ensure that interviewing employees, gathering and reviewing documents, and carrying out the usual tasks in an internal investigation do not constitute the unauthorized practice of law under the applicable local rules. Although there are organized bar associations in some Sub-Saharan countries, some do not have codes of conduct. U.S. practitioners are well advised to consult local counsel to make sure that their intended activities are permitted. B.D. Cozier, “Legal Ethics: A Handbook for Zimbabwean Lawyers,” 11-13 (Legal Resources Foundation 1st ed. 2009) (“In Zimbabwe, there is no written code of conduct for legal practitioners … . There are rules, but they are scattered throughout the Legal Practitioner's Act. There are also unwritten rules of conduct, which have long been observed by the profession and were adopted originally from the rules of the South African and English Bar and Side-bar.”).

The practitioner should carefully define who the client is for purposes of the investigation and to whom he will report. Even within Africa itself, many companies separate their Sub-Saharan Africa and North Africa operations because of the strong cultural economic and linguistic differences between the two regions. The overlay of a multi-national company headquartered in the United States, for example, but with separate divisions in North and Sub-Saharan Africa, can have important considerations as well for questions of privilege. U.S. counsel should be aware of the disclosure laws and privileges of the countries where the fact gathering will occur, as well as of privacy laws that may preclude the interview of company witnesses under certain circumstances. Counsel may also be prohibited by domestic legislation from removing certain financial documents from the country.

Cultural views on what constitutes inappropriate or even unlawful business conduct in the developing world can differ considerably from U.S. standards. Transparency International prepares an annual Corruption Perceptions Index that measures perceived levels of public sector corruption in individual countries worldwide. (http://bit.ly/1HTmPik). The scale is from 100 (very clean) to 0 (highly corrupt) and the countries of Sub-Saharan Africa rank among the lowest. In 2014, Zimbabwe, for example, had a score of 21 (which was tied for the 156th lowest of all countries), Kenya had a score of 25 (tied for 145th lowest) and Zambia scored 38 (tied for 85th lowest). Acts of corruption in business or government that are likely to be shocking to a U.S. lawyer may be viewed as business as usual in Africa. A payment to the head of a company to obtain a valuable contract or to a governmental official to avoid a fine or to expedite the granting of a license may not only be permissible, it may actually be required to transact business. “A bribe to some is a harmless gratuity to others. It may represent an expression of gratitude, appreciation, or loyalty; a display of etiquette; a form of entertainment … a socially expected form of post-transactional celebration between transactors; … a symbolic message conveying understanding of another's needs; or an acceptable token of nominal value.” Marie M. Dalton, “Efficiency v. Morality: The Codification of Cultural Norms in the Foreign Corrupt Practices Act,” 2 N.Y.U.J. L. & Bus. 583, 606-07 (2006) (internal citations omitted). Employees who have engaged in this conduct are likely to be annoyed by the probing questions of U.S. lawyers whom they view as uneducated in local business practices and all too eager to criticize them after the fact for conduct that was known about and likely approved at multiple levels of the company. Sensitivity to these cultural differences is critical to maintaining rapport, to conducting a thorough fact-finding investigation and to providing the client with an accurate report on the matters under investigation.

Conclusion

U.S. counsel will face a host of challenges and inconveniences in conducting an internal investigation in the developing world. Advanced planning, sensitivity to cultural issues and a sense of adventure will ensure that the assignment meets its objectives while providing the practitioner with a unique and professionally rewarding experience.

Jeffrey Sklaroff and Gregory Kehoeare are shareholders at Greenberg Traurig in New York and Tampa, FL, respectively. This article is based on the authors' experiences in conducting investigations in Africa. Julian Cokic'an associate in the firm's New York office, contributed to the article, which also appeared in the New York Law Journal, an ALM affiliate of this newsletter.

Conducting an internal investigation into questionable company conduct is universally a stressful experience ' stressful for the organization and its employees, for the witnesses who are questioned, and for the attorneys who structure and carry out the exercise. The organization demands quick answers: What exactly was done, and who did it? Do we need to make a disclosure to regulators or shareholders and if so, when? What is the dollars-and-cents impact on our business?

Employees who have been notified that they need to answer questions from outside counsel are anxious about the impact on their employment status, wonder whether they should retain their own counsel, and are concerned about potential discipline and even civil or criminal liability. And the outside lawyers who have been retained to deliver answers on a compressed timetable are required to master vast amounts of data, review thousands of documents and prepare for and conduct multiple interviews.

Now, imagine having to handle all that in a remote location, thousands of miles and multiple time zones away, in a developing part of the world with logistical and infrastructure challenges, and with cultural, political and legal systems that differ markedly from those in the United States.

Investment and economic activity are rapidly rising in developing areas of the world. Africa, for example, is now the world's fastest growing continent with average GDP growth of 5.5% in the last 10 years; it is home to six of the fastest-growing economies in the world and is predicted to have a larger workforce than China by 2040. See Ashish J. Thakkar, “The Lion Awakes, Adventures in Africa's Economic Miracle” 53 (St. Martin's Press 2015). With this situation, U.S. lawyers will be increasingly called upon by their clients with overseas interests to conduct internal investigations into the full range of conduct that can trigger such inquiries at U.S. companies ' earnings manipulation, commercial bribery, accounting frauds and payments to political figures, to name a few. Planning for and conducting these assignments can present huge challenges, yet they are professionally rewarding and provide the U.S. practitioner with a unique perspective on cultural and business practices in emerging areas of the world.

Getting Cleared for Takeoff

Internal investigations are often triggered by an alarmed client who wants answers yesterday. But the practitioner will confront an array of travel requirements that must be met before a flight can even be booked.

Visas

Visa requirements in the developing world can be cumbersome and complex, and are frequently changed. Angola, for example, requires: a completed application form, a letter from the applicant explaining the purpose and nature of the visit, a notarized letter of invitation written in Portuguese, a pre-paid itinerary, proof of yellow fever vaccination, a “guarantee of means of subsistence” showing $200 for each day to be spent in the country, and a copy of the hotel reservation affixed with the hotel's official stamp. The application can take five to seven business days and must be submitted in person to the Angolan Embassy. Cameroon's process is more or less discretionary, with visas issued “as deemed appropriate by the Embassy of Cameroon.” Some countries' visas permit only a single entry, while others allow multiple entries. This is an important consideration if there is any possibility that the practitioner will be required to pursue the investigation in a country other than where it began and then to return to the first country at a later date.

Inoculations

A consultation with a travel medicine specialist is mandatory. This medical provider will have current information on required and recommended inoculations and preventative medicines, which, depending on the destination, can include polio, typhoid, hepatitis, rabies, malaria, and yellow fever. An International Certificate documenting the date the yellow fever vaccination was administered is required for entry into many countries in Sub-Saharan Africa. Malaria medication is taken before the traveler departs the United States and for as much as a week upon return. A word of caution: Certain malaria medications can cause neuropsychiatric symptoms such as dizziness, insomnia, anxiety, nightmares and even hallucinations. The trip will be stressful enough, so it is a good idea to know exactly what drug is prescribed and to be aware of the range of possible side effects.

The travel medicine specialist will also provide current information on food and water precautions, of which there are many in the developing world ' including never drinking local tap water ' and strategies for preventing local diseases. It is good advice to leave the United States with a sufficient supply of an antibiotic such as ciprofloxacin to treat a wide variety of local intestinal maladies. Bring a sufficient supply of prescription medicines to last the entire trip, because even many common medications are unavailable in the developing world.

Non-prescription, over-the-counter medicines may contain ingredients that appear on a country's banned substance list. For example, the State Department warns that the Zambian Drug Enforcement Commission has detained U.S. citizens and confiscated their passports for possession of antihistamines such as Benadryl and other over-the-counter medications, which contained small quantities of diphenhydramine, an active ingredient that is on Zambia's list of controlled substances. The State Department advises that U.S. citizens visiting Zambia consider leaving such medications behind.

Medical Insurance

The medical infrastructure in many emerging nations is not at the level to which U.S. lawyers are accustomed. Medical facilities are limited even in major cities, and are even more restricted in outlying provinces. In Sub-Saharan Africa, serious illnesses or accidents may require medical evacuation to another country, like South Africa. The practitioner must have medical insurance that covers these services in the destination country.

Registration with the Department of State

The U.S. Department of State administers the Smart Traveler Enrollment Program (STEP) (https://step.state.gov/step), which provides travel advice and information for specific countries and permits U.S. citizens to register their trip with the local U.S. Embassy. Registration enables the traveler to receive information from the embassy about safety conditions, natural disasters and possible civil unrest, and provides a way for family or colleagues in the United States to make contact in an emergency. Reviewing the website for specific travel information and warnings is imperative. The listing for Zimbabwe, for example, advises that “the political, social, economic, and security situation … is unpredictable and could deteriorate quickly without warning,” and that because “the government may use force to disperse civilian demonstrations and protests, U.S. citizens should avoid all crowds, public demonstrations, and protests.” Criticism of the Zimbabwean president is a crime, and taking photographs of certain government buildings in the capital, Harare, is strictly forbidden. On the theory that forewarned is forearmed, even the most seasoned traveler should consult the Department of State website before departing.

On the Ground

Even after all required visas are procured, inoculations administered and the trip registered with the Department of State, U.S. counsel will still have to deal with a long list of obstacles and inconveniences, inlcuding the following.

Electrical power outages continue to plague many developing countries and can be a significant obstacle in conducting business. Even large, urban centers like Dar es Salaam in Tanzania, and Harare in Zimbabwe, suffer power blackouts on a regular basis, sometimes lasting more than 24 hours. These outages are predicted to get worse over time. See, e.g., Muharram Macatta, “Why Electricity Outages in Dar es Salaam?” Business Times (May 22, 2015), http://bit.ly/1XZN34w. Portable external battery packs can provide a reserve of power for critical electronic devices, such as laptops and cell phones, while ensuring voltage compatibility. They are a must-have for the U.S. practitioner.

Even when the electricity is up and running, power outlets in African countries are not compatible with electrical plugs from the United States. The United States uses a Type A and Type B power adapter, while many African countries use a combination of Type C, Type D, Type G, and Type M adapters. Devices in the United States run on 110/125 volt electricity while the majority of the world runs on 220/240 volts. Some devices may require a transformer ' as opposed to just a converter ' to ensure electrical compatibility. Pack a full range of electrical converters and transformers.

Traffic is another consideration. Severe traffic congestion plagues many cities in Sub-Saharan Africa. Roads are jammed with cars, buses, trucks, bicycles, rickshaws, mopeds and “tuk tuks.” Traffic is often frozen, and it can take an inordinate amount of time to travel even short distances. Appointments are missed and meetings are delayed or canceled. The practitioner must plan for and work around these conditions to maintain efficiency and stay on schedule for the completion of the assignment. (In 2010, it was estimated that Dar es Salaam, Tanzania lost about $2,500,000 daily due to decreased productivity, wasted fuel and late delivery of products due to traffic jams. See Elias Mhegera, “Tanzania: Dar Starts Modern Bus Service to Check Traffic Jams,” ITSSA (Oct. 5, 2015), http://bit.ly/1QtZZyT. Roads can be particularly hazardous. In Nigeria, for example, there are 1,000 deaths per 100,000 cars on the road. An experienced, private driver with a safety-equipped car is essential.

Language Barriers may, of course, prove troublesome. Although English is widely spoken in Sub-Saharan Africa, there are a many local languages and dialects that will have an impact on the way in which employee interviews are conducted. For example, Swahili and English are the official languages for Tanzania, but there are dozens of tribal languages still in use. Conducting an interview in the employee's own language may make the employee feel less anxious, will help establish rapport and may reduce the potential for miscommunication. It can be more effective to work with local consultants and forensic firms that actually speak the employees' language rather than relying on a retained translator. The decision whether to retain the U.S. entity and have it bring in local teams or to retain the local office directly is important, as there may be internal risk controls and logistical obstacles to working with the U.S. entity that are not at issue when the local office is retained directly.

Food and water precautions must also be taken. The Center for Disease Control (CDC) recommends that travelers to certain African countries avoid food served at room temperature, unwashed or unpeeled raw fruits and vegetables, “bushmeat” (monkeys, bats, or other wild game), tap or well water, ice made with tap or well water and drinks made with tap or well water. See Health Information for Travelers to Tanzania, including Zanzibar, http://1.usa.gov/1TZJz1s. The warnings about tap water cannot be overstated. Even brushing one's teeth with tap water can lead to intestinal problems.

Conducting the Investigation

As with any assignment in a foreign country, the U.S. practitioner should ensure that interviewing employees, gathering and reviewing documents, and carrying out the usual tasks in an internal investigation do not constitute the unauthorized practice of law under the applicable local rules. Although there are organized bar associations in some Sub-Saharan countries, some do not have codes of conduct. U.S. practitioners are well advised to consult local counsel to make sure that their intended activities are permitted. B.D. Cozier, “Legal Ethics: A Handbook for Zimbabwean Lawyers,” 11-13 (Legal Resources Foundation 1st ed. 2009) (“In Zimbabwe, there is no written code of conduct for legal practitioners … . There are rules, but they are scattered throughout the Legal Practitioner's Act. There are also unwritten rules of conduct, which have long been observed by the profession and were adopted originally from the rules of the South African and English Bar and Side-bar.”).

The practitioner should carefully define who the client is for purposes of the investigation and to whom he will report. Even within Africa itself, many companies separate their Sub-Saharan Africa and North Africa operations because of the strong cultural economic and linguistic differences between the two regions. The overlay of a multi-national company headquartered in the United States, for example, but with separate divisions in North and Sub-Saharan Africa, can have important considerations as well for questions of privilege. U.S. counsel should be aware of the disclosure laws and privileges of the countries where the fact gathering will occur, as well as of privacy laws that may preclude the interview of company witnesses under certain circumstances. Counsel may also be prohibited by domestic legislation from removing certain financial documents from the country.

Cultural views on what constitutes inappropriate or even unlawful business conduct in the developing world can differ considerably from U.S. standards. Transparency International prepares an annual Corruption Perceptions Index that measures perceived levels of public sector corruption in individual countries worldwide. (http://bit.ly/1HTmPik). The scale is from 100 (very clean) to 0 (highly corrupt) and the countries of Sub-Saharan Africa rank among the lowest. In 2014, Zimbabwe, for example, had a score of 21 (which was tied for the 156th lowest of all countries), Kenya had a score of 25 (tied for 145th lowest) and Zambia scored 38 (tied for 85th lowest). Acts of corruption in business or government that are likely to be shocking to a U.S. lawyer may be viewed as business as usual in Africa. A payment to the head of a company to obtain a valuable contract or to a governmental official to avoid a fine or to expedite the granting of a license may not only be permissible, it may actually be required to transact business. “A bribe to some is a harmless gratuity to others. It may represent an expression of gratitude, appreciation, or loyalty; a display of etiquette; a form of entertainment … a socially expected form of post-transactional celebration between transactors; … a symbolic message conveying understanding of another's needs; or an acceptable token of nominal value.” Marie M. Dalton, “Efficiency v. Morality: The Codification of Cultural Norms in the Foreign Corrupt Practices Act,” 2 N.Y.U.J. L. & Bus. 583, 606-07 (2006) (internal citations omitted). Employees who have engaged in this conduct are likely to be annoyed by the probing questions of U.S. lawyers whom they view as uneducated in local business practices and all too eager to criticize them after the fact for conduct that was known about and likely approved at multiple levels of the company. Sensitivity to these cultural differences is critical to maintaining rapport, to conducting a thorough fact-finding investigation and to providing the client with an accurate report on the matters under investigation.

Conclusion

U.S. counsel will face a host of challenges and inconveniences in conducting an internal investigation in the developing world. Advanced planning, sensitivity to cultural issues and a sense of adventure will ensure that the assignment meets its objectives while providing the practitioner with a unique and professionally rewarding experience.

Jeffrey Sklaroff and Gregory Kehoeare are shareholders at Greenberg Traurig in New York and Tampa, FL, respectively. This article is based on the authors' experiences in conducting investigations in Africa. Julian Cokic'an associate in the firm's New York office, contributed to the article, which also appeared in the New York Law Journal, an ALM affiliate of this newsletter.