This week, Japanese shipping company Nippon Yusen Kabushiki
Kaisha (NYK) pleaded guilty to criminal cartel
conduct in the Federal Court. It is the first time, since the
criminal cartel conduct provisions were introduced on 24 July 2009,
that criminal charges have been deployed in Australia - and, as
Australia's competition regulator indicated following
yesterday's hearing, it is unlikely to be the last:
"We have 10 to 12 detailed investigations under
way and we're trying to lay the platform for a continuing
stream of criminal cartels."
On 14 July 2016, the Commonwealth Director of Public
Prosecutions (DPP) (equivalent to the Crown
Prosecution Service in the United Kingdom) filed criminal
proceedings against NYK on a reference from the ACCC.
It is alleged that NYK participated in cartel conduct with other
global shipping companies in connection with the transportation of
vehicles, including cars, trucks, and buses, from Japan to
Australia between 24 July 2009 and 6 September 2012.
It does not appear that any individuals will be charged as part
of the case against NYK.
NYK's guilty plea obviates the necessity for any liability
phase. The matter has therefore been listed for further directions
on 12 September 2016 and at that time is likely to be set down for
sentencing, which we expect will occur by calendar year's
Under Australian criminal sentencing principles, it is not open
to the prosecutor to reach any agreement with the defendant as to
the appropriate fine and nor can any joint submission be made to
the court as to what that fine may be or the range of fines that
would be appropriate. The court will therefore impose the first
criminal fine by reference to general sentencing principles.
Since NYK and the DPP appear to be in broad agreement on facts
and evidence, we expect that the only substantive issue for debate
on 12 September 2016 will be the question of quantum.
For corporations, the maximum fine for each criminal cartel
offence will be the greater of:
three times the total benefits that have been obtained and are
reasonably attributable to the commission of the offence;
if the total value of the benefits cannot be determined,10% of
the corporation's annual turnover connected with
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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This is the first charge against a corporation under the criminal cartel provisions of the Competition and Consumer Act.
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