ENGLAND & WALES Law and Practice Contributed by: John Kaye and Piers Desser, Carson Kaye
ance emphasises transparency, auditability and law - ful basis for processing, particularly where automated decision-making is involved. 2.5 Internal Investigations and Co-Operation Internal investigations play a central role in UK finan - cial crime enforcement and are often the first line of response when potential misconduct is identified within a company. Regulators such as the FCA and prosecutors including the SFO routinely expect firms to conduct prompt, independent and well-document - ed internal reviews of suspected fraud, bribery, money laundering or sanctions breaches. Legal privilege is a critical issue. Communications and documents created for the dominant purpose of obtaining legal advice or preparing for litigation may be protected by legal professional privilege. However, privilege can be complex in internal investigations, particularly where materials are shared with auditors or regulators. Care must be taken to structure investi - gations to preserve privilege, especially over interview notes and forensic reports. Data protection and employment law obligations also apply. Investigations must comply with the UK GDPR and Data Protection Act 2018, including requirements of fairness, necessity and proportionality in handling employee data. Employment law considerations include ensuring fair disciplinary processes, avoid - ing constructive dismissal risk, and respecting con - tractual and procedural rights during interviews and suspensions. Voluntary disclosure and co-operation are significant factors in enforcement outcomes. The SFO and FCA both give credit for early self-reporting, full co-oper - ation, and remediation. In some cases, co-operation can influence charging decisions, settlement terms, or the availability of Deferred Prosecution Agreements (DPAs), although it does not guarantee immunity from prosecution. 2.6 Right to Not Co-Operate or Self- Incriminate Financial crime investigations in England and Wales commonly involve arrests and suspect interviews, particularly in fraud, bribery and money laundering
cases. Arrests are carried out under the PACE where there are grounds to suspect involvement and neces - sity criteria are met (eg, to secure evidence or prevent interference). Suspects have the right against self-incrimination. During a PACE interview, they are cautioned and are entitled to legal advice. They may remain silent; however, under the Criminal Justice and Public Order Act 1994, a court may draw adverse inferences from silence where an explanation is later relied upon at trial. There are important exceptions where compulsion applies. The SFO can require individuals to attend interviews and answer questions under Section 2 of the CJA 1987, with refusal constituting a criminal offence (subject to limited privilege against self-incrim - ination). The FCA can similarly compel testimony and documents in regulatory investigations. Courts may issue production orders and search war - rants, and under the Investigatory Powers Act 2016, in certain circumstances, individuals can be required to assist with decryption of digital data, with non-com - pliance potentially amounting to an offence. Failure to co-operate can therefore result in criminal sanctions, contempt of court, or adverse regulatory consequences, including enforcement action and fit - ness/propriety findings. 2.7 Pre-Charge Powers England and Wales have a well-developed set of pre- charge asset restraint and freezing powers, primarily designed to preserve assets pending investigation, prosecution, or civil recovery of suspected proceeds of crime. Legal Framework and Key Tools The principal regime is contained in the POCA. Two main orders are used. • Restraint orders (Part 2 of the POCA) – used in criminal investigations and prosecutions. • Freezing orders (Part 5 of the POCA civil recovery) – used where property is suspected to be recover - able even without a criminal charge or conviction.
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