Volume 4 - Issue 1
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Editorial - Developing Criminal Cartel Law: Dealing with the Growing Pains
This article formulates a principled criminalisation framework in order to argue for the necessity of criminal sanctions as punishment under EC cartel law. It examines the traditional rationales of criminal punishment, demonstrating their relative merits and demerits. The theoretical usefulness of an economic model of analysis concerning the employment of criminal antitrust sanctions is highlighted in the process. The examined theories are then used to establish a 'model of criminalisation', which consists of a number of principles to be adhered to, and a set of (limiting) criteria to be considered, when deciding whether to criminalise certain (cartel) behaviour. This principled criminalisation framework is then employed to argue that a personal criminal sanction for cartel activity is necessary if one genuinely wishes to enforce the law in this area. More specifically, it is argued, first, that the current use of non-criminal sanctions within the EC concerning such arrangements leads to ineffective law enforcement of an activity that causes serious harm to consumers and the economy; and, second, that this deficiency should be rectified through the use of criminal punishment as reinforcement for other less controversial antitrust law enforcement tools, such as fines, director disqualifications, and private enforcement actions.
Ireland's national competition legislation, recently strengthened by the Competition Act 2002, provides that breaches of competition law constitute criminal offences and, in the case of cartels, managers and directors of offending firms may be imprisoned or fined if convicted for such behaviour. Ireland is the first Member State in Europe where the courts have interpreted the criminal sanctions provided for in competition legislation. However, the reluctance to imprison white-collar criminals appears to remain in the Irish courts. This article looks at the implementation of criminal sanctions in the Connaught Oil and Manning Cases. The authors question whether the sentence handed down in Manning was unduly lenient in proportion to the more stringent penalties provided for under competition legislation. Finally, we consider whether these cases will set a precedent for such leniency in future cases.
The Australian Treasurer issued a press release on 2 February 2005 outlining proposals for the criminalisation of serious cartel conduct. The proposals depart from the Enterprise Act model in many ways but have some common features including reliance on the concept of dishonesty as an element of the cartel offence. This article is an overview and critique of what the proposals say, or do not say, about: (1) dishonesty as a problematic element of a cartel offence; (2) the requirement of 'an intention to obtain a gain'; (3) the mental element of the cartel offence; (4) the element of agreement for the cartel offence; (5) the $1 million value of affected commerce threshold for prosecution; (6) the principle of corporate criminal responsibility that is to apply to the cartel offence; (7) the defences and exemptions that will apply to the cartel offence; (8) sentencing options and maximum penalties, and the application of proceeds of crime legislation and money-laundering offences; and (9) numerous other questions, including the challenge of defining the cartel offence in terms that can readily be communicated to a jury, the need for a 'one-stop' process for handling applications for immunity from both criminal prosecution and enforcement action for civil penalties, and whether powers of telecommunications interception should be available. Most of these issues are not straight-forward and should have been referred to the Australian Law Reform Commission for full examination and due public consultation. Exposure draft legislation has yet to be provided. Legislation may be introduced in 2008 after the forthcoming Federal election.
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