Legal Privilege In Transnational Bribery Investigations By US Authorities

Armed with the US Foreign Corrupt Practices Act (FCPA), US authorities have stepped up their efforts to fight transnational bribery.

The FCPA, which prohibits active bribery of foreign public officials, applies to two broad categories of persons: those with formal ties to the US (stock listing, citizenship, residency, or incorporation) and those who take actions in furtherance of an FCPA violation while in the US. Thus, many European companies are at risk of facing an FCPA investigation. The first question they must ask when confronted with a SEC subpoena is whether communication with their attorneys is privileged and thus protected.

Austrian attorney-client privilege

In Austria, a lawyer's obligation to secrecy is a vital to the exercise of the legal profession. According to Section 9 para 2 RAO of the Austrian Lawyers Code (Rechtsanwaltsordnung) the lawyer is bound to professional secrecy in matters confided to him or have otherwise became known to him in his capacity as a lawyer and whose confidentiality is in the interest of his client. This duty of confidentiality is recognised by Austrian criminal law, which prohibits criminal authorities from confiscating privileged communication and allows a lawyer to refuse to testify against his client.

US attorney-client privilege

In the US, the scope of the attorney-client privilege is defined by federal common law. It protects confidential communication between a lawyer and his client. However, unlike in Austria, disclosing an attorney-client communication to a third party might waive the privilege as to the entire subject matter of the communication.

Which law applies?

To date, there is no clear criminal case law providing guidance on which privilege laws apply if – from a US-law perspective – client data is located in a foreign country. Some guidance comes from patent litigation cases, where US courts have asked two questions: (i) whether foreign or US law applies to the privilege question, and (ii) whether, under the applicable law, the privilege protects the communication in question.

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