Searches, Raids and Inspections in Japan by the JFTC

Naohiko KOMUROSenior Planning Officer, Management and Planning

Division, Investigation Bureau, General Secretariat

Japan Fair Trade Commission (JFTC) 

ICN Cartel Workshop: Mini Plenary 5October 17, 2013 – Cape Town

2

Outline of the Presentation

1. Investigation Procedure for Violation of 　 Anti-monopoly Act (AMA)

2. Various Methods of Investigation of Suspected Illegal Acts

3. Actual Dawn Raids for the Investigation – Example of the Wire Harness Case

Before the Dawn RaidsPlanning of the Dawn RaidsSetting up the Central Command PostHolding of a Briefing for Search TeamsConducting the Dawn RaidsInterviews during and soon after the Dawn Raids

4. International Cooperation – JFTC’s Experience

3

1. Investigation Procedure for Violation of AMA

Investigation procedure by the JFTC consists of

i) detecting a suspected illegal act,

ii) preliminary investigation and assessment of a suspected illegal act,

iii) evidence-gathering, and

iv) legal measures such as cease and desist order and surcharge payment order.

Proactive detection by the JFTC

Report by the public to the JFTC

Application for leniency

Administrativeinvestigation

Compulsory investigation for

criminal cases

Cease and desist order

Surcharge payment order

File an accusation with the prosecutor

general

Criminal procedure

Law suit to rescind a hearing

decision

Hearing procedure

WarningCautionClosure

Final and conclusive

Final and conclusive

4

2. Various Methods of Investigation of Suspected Illegal ActsMain Investigative techniques

Dawn raid Raid on business offices, etc. of persons concerned with a case,

inspect related materials such as documents, and order the person to submit such materials as necessary

Interview Conduct interviews with persons including employees of suspected

violators and record their statements

Order to report Order persons including suspected violators to report related facts

including trade practices of the related products or services

5

Two Types of Procedures Administrative Procedure (adopted in most cases) Investigators designated by the Commission are able to conduct the

above procedures based on indirect enforcement authorities, where the object person shall be criminally charged if the person does not comply with the authorities.

Criminal Procedure (adopted in vicious and serious cases) Question criminal suspects or witnesses, inspect objects possessed

by the object persons, or conduct visit, search, or seizure by virtue of a warrant issued in advance by a judge of the competent court

2. Various Methods of Investigation of Suspected Illegal Acts

6

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

i. Before the Dawn Raids

ii. Planning of the Dawn Raids

iii. Setting up the Central Command Post

iv. Holding a Briefing for Search Teams

v. Conducting the Dawn Raids

vi. Interviews during and soon after the Dawn Raids

7

i. Before the Dawn Raids Leniency applications from several companies

Hearing from the leniency applicants

Coordination with the overseas authorities

Examination of the violations and the relevant markets

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

8

ii. Planning of the Dawn Raids Selecting the search premises

Collecting information on the search premises

Preparing a list of evidence to be seized

Selecting interviewees and preparing a list of questions

for interviews

Organizing search teams (including team leader,

interviewer and electronic evidence searcher)

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

9

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Planning•It is good practice to engage in comprehensive planning prior to a search, including, as appropriate: identifying the premises to be searched, the type of evidence to be seized, and the composition of search teams; assigning responsibilities during the search; undertaking covert reconnaissance of the search venue; and coordinating with other entities that will participate in the search.

Search Team Composition•It is good practice to consider requirements such as language, gender, and information technology capacity in the team’s composition.•It is good practice to appoint a Team Leader who will be responsible for the overall conduct of the search at a premises.

10

iii. Setting up the Central Command Post Controlling the search teams and coordinating search

strategies of the teams

Information sharing

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Search Team Composition• It is good practice, in the instance of simultaneous raids, to plan for a central command post to coordinate the sharing of emerging information and strategies among the search teams and ensure overall consistency of approach.

iv. Holding a Briefing for Search Teams Explaining the search plan

Distributing search tools (such as envelopes, PCs, and mobile phones)

Holding search team meetings

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Planning• It is good practice to precede searches with thorough briefings for team members.• It is good practice to prepare “search kits” ready-packed with stationary, seals and other necessities for team members.

11

v. Conducting the Dawn Raids Conducted by each team Presenting an Identification Card of investigator and notifying

alleged fact in writing Seizing the necessary materials and electronic data

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Sequential or Simultaneous Searches• It is good practice to conduct searches with the element of surprise.

Presentation of Warrant•It is good practice for the Team Leader to furnish a copy of the search authorization to a senior company official, explain the nature of the search, and caution against obstruction. 12

13

vi. Interviews during and soon after the Dawn Raids Interviewing the employees of the companies for

about two weeks

Making records of interviews

3. Actual Dawn Raids for the Investigation

– Example of the Wire Harness Case

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Taking Statements during the Search• It is good practice to ensure that a strategy is in place as to who will conduct the interviews, and that complete notes are made of the interviews.

Chapter 1 of the compilation of “Good practices” from the Anti-cartel Enforcement Manual

Coordination with other Agencies• It is good practice, where appropriate, to communicate and coordinate with relevant foreign competition authorities.• When coordinating with relevant foreign agencies, it is good practice to communicate early in the investigation and on a regular basis. 14

Modifier Cartel Case (2003) EU and others

Marine Hose Bid-rigging Case (2008) EU, France, Italy, Korea, UK and US

Cathode-ray Tube Cartel Case (2009) Indonesia, Korea, Thailand, EU and others

4. International Cooperation

- JFTC’s Experience

15

I look forward to seeing you again at our website!

Dokkin（ Children’s　character　for　the　

JFTC ）

Website of the JFTC: 　　　http://www.jftc.go.jp/ (Japanese)http://www.jftc.go.jp/e-page/index.html (English)

Thank you for your attention!Thank you for your attention!