Compliance & Investigations

U.S. Court of Appeals protects criminal defendants against self-incrimination from compelled testimony abroad – the effects on investigations against companies

The Fifth Amendment of the U.S. Constitution protects criminal defendants from having to testify if they may incriminate themselves through the testimony. On 19 July 2017, the United States Court of Appeals for the Second Circuit Court (No. 16-898 (2d Cir 2017)) held that the Fifth Amendment's prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign power has compelled the testimony. The decision reinforces defendants' rights and affords extensive legal protection against self-incrimination. It also affects cross-border white collar criminal proceedings against companies.


As part of investigations into the manipulation of LIBOR benchmark rates, Anthony Allen and Anthony Conti, two bank traders who were later prosecuted in the U.S., were forced to testify before the UK's Financial Conduct Authority or face imprisonment for refusing to do so. Based on the findings from the compelled testimony, the British regulator brought charges against one of the defendants' co-workers. The regulator disclosed all relevant evidence, including the compelled testimony of Allen and Conti, to the co-worker, who reviewed, commented and marked-up the statements. The UK regulator stayed its enforcement action against him on account of the criminal proceedings in the U.S. He pleaded guilty in the U.S. trial and cooperated with the Department of Justice.

Allen and Conti were convicted by the U.S. court of conspiracy to commit bank fraud as well as wire fraud and handed prison sentences. Their co-worker's testimony was almost the only source of information in the trial. Allen and Conti appealed the verdict, arguing that the prosecuting authority had violated their Fifth Amendment rights by (indirectly) using the compelled testimony during the trial through the statements of their co-worker.

Decision of the U.S. Court of Appeals for the Second Circuit

The Court of Appeals held that compelled testimony – whether coerced by foreign officials or U.S. authorities – could not be used in the proceedings. Privilege against self-incrimination also applied to defendants in American criminal proceedings who were forced to testify by a foreign authority. According to the court. this also covered cases in which the testimony was compelled in full accordance with the laws of the foreign country in question. The court regarded the use of the testimony of Allen and Conti as a violation of the privilege against self-incriminatory compulsion, both with regard to the indictment as well the trial, and reversed the judgment.

According to the court, neither the risk of foreign governments inadvertently obstructing the prosecution of criminal conduct in the U.S. nor of hampering cross-border investigations justified revoking the fundamental and absolute protection afforded by the Fifth Amendment. 

As regards the evidence that could be derived from compelled testimony, i.e. in particular testimony of witnesses who were given access to such compelled testimony, this also infringed the burden of proof rule developed under Kastigar vs. United States (406 U.S. 441 (1972)). Kastigar requires the prosecuting authority to prove that the evidence it proposes to use at trial was derived from legitimate sources - wholly independent of the immunized testimony - and, in particular, that the previously exposed compelled testimony was not altered or otherwise tainted. To this extent, generalized denial by a witness that he/she was affected by the exposed compelled testimony is insufficient. In the present case, the prosecuting authority failed to meet this burden and demonstrate that the co-worker's testimony in the trial against Allen and Conti had not been tainted by his previous review of the compelled testimony.

The court sees possible exceptions to this ban on introducing compelled testimony, if a hostile foreign government were to directly attempt to sabotage U.S. prosecutions by means of compelled testimony. Moreover, in order for such ban to apply, the foreign defendant must have been at risk of suffering tangible and credible consequences, especially in the form of imprisonment, had he or she reused to testify.

Impact of the decision / Recommendation

The decision has great significance for international white collar criminal proceedings, in particular against companies. Specifically for cases involving cross-border investigations and numerous authorities in different countries, there is a greater likelihood that a ban on the introduction of evidence in U.S. criminal proceedings will apply in the circumstances outlined above.

On the whole, one needs to consider in future that testimony given to government agencies or in court may not necessarily be admitted in U.S. criminal proceedings. This may differ from case to case, if the information in question was derived from an independent source and not tainted by the compelled testimony.

Regarding the principles established in the ruling, individuals compelled to testify in court or before government agencies should expressly indicate (and possibly have this recorded) at the end of questioning or examination that the statement was only made due to the threat of sanctions for not testifying and was thus involuntary.