Search and seizure of the documents of the enterprise by the law enforcement agencies: is it always lawful and what to do?

The practice of search and seizure of accounting, tax and other documentation of the enterprise is quite common in Ukraine. Sometimes these law enforcement actions are explained by the presence of really strong reasons to form a reasonable suspicion of specific individuals in committing crimes in the sphere of economic or other financial activities and the implementation of the criminal proceedings.

However, there are cases when Themis servants violate the norms of legislation through its leverage to press on  business in corrupt purposes. Does  the visit of law enforcement agencies to your company is substantiated and what documents could be withdrawn by investigators and prosecutors, as well as what to do, when you are raided with a search or a seizure (according to the new Code of Criminal Procedure – temporary access to things and documents). For these and other questions answering the managing partner of the “Syutkin and partners” law firm Nikolay  Siutkin.

What is exactly meant by the terms “search” and “seizure, and are these terms always interrelated concepts? 

According to the Criminal Procedure Code of Ukraine, under the  search warrant must be understood investigations aimed at identifying and fixing any statements indicates the circumstances of the criminal offense. These could be the documents, counterfeit seals, stamps, accounts etc. Also, investigators can conduct a search in order to identify the property acquired from criminal activity: money, valuables, documents once again. As for the seizure, the current Code of Criminal Procedure is more relevant to use the expression “to obtain temporary access to things and documents”. However, the essence of the concept remains the same. It is to provide the side of the criminal proceedings (the investigator, prosecutor) with the possibility to get acquainted with its interesting documents, make copies of them or withdraw them. In response to the second sub-question, I would say that it is necessary to distinguish procedures of search and seizure. So, a search can really end with a withdrawal of some of the documents and properties. However, going on a search warrant, the investigator, as a rule, does not know exactly what can he find. There are exceptions, and then a clear list of the wanted property or documents is indicated in the determination of the investigating judge in search. As for the seizure – here is the investigative body knows for sure what documents exactly they need, and require them from the owner.

The words “search” and “seizure” has long become synonymous with “tragedy” for business, especially regarding the equipment withdrawal: computers, their individual components. As a rule, there are no additional databases for storing the data in the enterprise – all in computers. Therefore, when they are taken – work stops, business goes bankrupt, and who is to blame? 

Temporary removal of any machinery, computer equipment is possible only in case of the need for expertise, it should also be mentioned that the seizure of computer equipment should be carried out in the presence of a specialist in the field of computer-technology research, otherwise it can be stated about the impossibility of the examination in the future. All the rest, with regard to the withdrawal of any equipment up to mobile phones and flash cards is illegal. In this sense, a new provision introduced by the Criminal Procedure Code of 2012, can be called a special regulation of the temporary access to electronic information systems and mobile terminal communication systems. Here, law enforcement officers can only make a copy of the data, without seizure of the object, such as a computer or a phone. Certainly, if only this object was not the murder weapon, and there are no traces of the crime on it.

And can accounting documents or documents of tax reporting be seized? 

Yes, these documents may be withdrawn, but the representative of the company has the right to demand to make copies of the documents for their future work.

Are there any documents,  that the investigation cannot seize in any circumstances? 

Unfortunately not. However, it is possible to significantly hinder access to the investigation, for example, to qualify the documents as such that contain information protected by law – commercial, banking, private or personal information, and so on. At the same time, we must remember that the classification of the documents as confidential must be confirmed by the relevant decree of the head of the company. Experienced lawyers, incidentally, often use this rule, presenting such documents of the customers like documents that contains the secret of any nature.
In addition to the above-mentioned methods of “defence of the documents”, lawyers of the “Syutkin and partners” law firm developed other unique legal mechanisms specifically for their customers that enable them to refuse to provide documents during the seizure.

But this is wrong and it’s the violation! 

I would not say that! Rather, it is the highest legal expertise. The legislation is not perfect, and perhaps cannot reach the ideal and to take into account everything. And qualified and really talented professionals always find out a few arguments in favour of their position. It’s just a defence strategy. If the inspector can not refute any argument, backed the approval by the norm of law, then the lawyer’s right.

Let us return to the search and seizure. How should behave an entrepreneur when the law enforcement agencies came at his firm and require  to provide the opportunity to search or seize the documents? How to know  if they operate within the law? 

Every entrepreneur should be aware of this sequence of actions. Firstly, it’s necessary to ask visitors to show identity cards to enable you to understand that the visitors are the representatives of law enforcement bodies. In any case, I recommend remembering. It is better to write down the information specified in the identity:  name, title, document number. In our time, when raiding became the frequent occurrence as business registration, this remedial measures will not hurt. In addition, according to the Criminal Procedure Code, only investigators and prosecutors have rights to provide the  search, and not as have been before, employees by order – investigators, agents and others. One of the key moments of the communication with visitors who came with a search or a seizure is to check the grounds for conducting the investigation. The  law enforcers should have on hand a determination of the investigating judge to conduct the search. Note that a copy of such document shall be served on the representative of the enterprise. The existence of the document is still not a reason to relax and to sit in the corner, watching the work of detectives. You should carefully read the document: is the company address correct, what was the basis for its adoption, what is to be find. Ask your questions, law enforcement have to answer them. Take care of the presence of disinterested witnesses.

Of course, the best at this stage to call an experienced lawyer, and to invite him to participate in the planned action. The knowledges of the in-house corporate lawyer most likely will not be enough in this situation,  to provide a significant  and most importantly an effective reaction. The fact is that the in-house  lawyer of the company rarely encounters with such situations and often has no idea of all procedural aspects and features of the different procedures in the framework of criminal proceedings. You hardly have to count on the assistance of a confused lawyer. If you have already enlisted the help of a lawyer, then you already should not worry about the correctness of the actions. Moreover, all the claims of the procedure may be recorded by your lawyer (attorney) in the protocol of the investigative action, which is important. By the way, you have the right to request to provide an investigative action in the presence of your lawyer. It is a good practice to commit an investigative action on video. It is quite allowed by the current Code of Criminal Procedure. The parameters and details of the recorder device have to be noticed in the search protocol. If you withdraw any documents, objects – make sure that the detailed list of them was included in the search report or description of the seized items attached to it.
Even more interesting with the seizure. Definition of holding the seizure is taken by the investigating judge or the court for the request of the criminal proceedings in the presence of a person who possess those  items or documents. The holder of documents can not be called to the court if the investigator or the prosecutor can prove that there is a real reason to fear that these objects in the application or documents may be destroyed, lost or damaged. Unfortunately, courts do not always pay attention to this subtle nuance, which gives grounds for appeal determinations.

Is there, “the expiry date” for such judicial decision?

Of course, there is. The determination of the investigating judge has to be worked out and had implemented in one month from the date of its issuance.

To summarise our conversation, Nikolay, what advice or recommendations would you give to entrepreneurs regarding the conduct of searches, seizures in the enterprise?

Basing on the experience of our company, I can say that the problems in dealing with law enforcement authorities, as a rule, do not arise for those entrepreneurs who attract experienced lawyers. The form of the provision of legal assistance may be different. Now the most relevant is the legal outsourcing. It is a legal support of the enterprise. Most high-quality services are in the large law firms, specializing in various areas of law. After all, in the course of business, the enterprise may have problems not only in the sphere of economic activity but also related to criminal proceedings, labor relations, in the sphere of civil law. Corporate lawyers in this sense, can have a very limited assistance. Much better when the single-discipline specialist is dealt with the non-diversified issue. When there is a problematic issue, the head of the company simply dial the number of the  support company and that’s all: all the problems are solved! If there are no such specialists who can help at any time of the day, than you have to get out yourself. That is expensive and inefficient. Therefore, I advise to all representatives of business to worry not only about building up profits but also about related important question of the company in advance. Only a responsible and thoughtful expert’s approach can ensure your business for  a long and prosperous future!