Searches, Raids and Inspections in Japan by the JFTC

1. Searches, Raids and Inspections in Japan by the JFTC Naohiko KOMURO Senior Planning Officer, Management and Planning Division, Investigation Bureau, General Secretariat Japan Fair Trade Commission (JFTC) ICN Cartel Workshop: Mini Plenary 5 October 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 Raids Planning of the Dawn Raids Setting up the Central Command Post Holding of a Briefing for Search Teams Conducting the Dawn Raids Interviews 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. Final and conclusive Cease and desist order Proactive detection by the JFTC Administrative investigation Hearing procedure Surcharge payment order Law suit to rescind a hearing decision Report by the public to the JFTC Final and conclusive Warning Caution Closure Application for leniency Compulsory investigation for criminal cases File an accusation with the prosecutor general Criminal procedure

4. 2. Various Methods of Investigation of Suspected Illegal Acts Main 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. 2. Various Methods of Investigation of Suspected Illegal Acts 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

6. Actual Dawn Raids for the Investigation – Example of the Wire Harness Case • Before the Dawn Raids • Planning of the Dawn Raids • Setting up the Central Command Post • Holding a Briefing for Search Teams • Conducting the Dawn Raids • Interviews during and soon after the Dawn Raids

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

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

9. 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. Actual Dawn Raids for the Investigation – Example of the Wire Harness Case iii. Setting up the Central Command Post • Controlling the search teams and coordinating search strategies of the teams • Information sharing • 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.

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

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

13. Actual Dawn Raids for the Investigation – Example of the Wire Harness Case vi. Interviews during and soon after the Dawn Raids • Interviewing the employees of the companies for about two weeks • Making records of interviews • 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.

14. 4. International Cooperation - JFTC’s Experience • 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 • 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.

15. Thank you for your attention! I look forward to seeing you again at our website! Website of the JFTC: http://www.jftc.go.jp/(Japanese) http://www.jftc.go.jp/e-page/index.html(English) Dokkin （Children’s character for the JFTC）