The recent U.S. extradition and conviction of a foreign national
in connection with his participation in the worldwide marine hose
criminal anti-trust cartel serves as a reminder to all that
national borders may not insulate offenders from the international
reach of competition/antitrust laws.
Indictment, Extradition and Sentence
On April 3, 2014, Romano Pisciotti, an Italian national and
former executive of marine hose manufacturer Parker ITR S.r.l., was
extradited from Germany to the U.S. on a charge of participating in
a conspiracy to suppress and eliminate competition for marine hose
sold in the U.S. and elsewhere. Marine hose is used to transfer oil
between tankers and storage facilities. The U.S. Department of
Justice ("DOJ") secured guilty pleas from five companies,
including Parker ITR S.r.l., and nine other individuals in its
ongoing investigation into the marine hose conspiracy.
The indictment against Pisciotti alleged that, from at least
1999 to November 2006, Pisciotti and his co-conspirators, among
attended meetings and engaged in discussions in the U.S. and
elsewhere regarding the sale of marine hose;
agreed to allocate market shares among the conspirators during
the meetings and discussions;
agreed to a price list for marine hose during the meetings and
agreed, during the meetings and discussions, not to compete for
one another's customers; and
shared and received information regarding marine hose projects
and prices through a co-conspirator who served as a
"clearinghouse" for information.
Following his extradition, on April 24, 2014, Pisciotti pleaded
guilty and was sentenced by a U.S. District Court in Florida to
serve a two-year prison sentence, with credit for time served upon
his initial arrest in Germany, and a $50,000 fine.
Implications for International Companies
This case marks the first successfully litigated extradition by
the U.S. in a competition/antitrust matter1 and may have
significant ramifications for international companies and their
executives. Price fixing and bid rigging offences carry serious
penalties around the world, including in Canada and the U.S. Of
particular note to Canadian executives is the Extradition Treaty
Between the United States of America and Canada (the
"Treaty") that allows for extradition of persons charged
or convicted of a number of offences including involvement in
conspiracy or bid rigging offences. The Extradition Act governs the
process for extraditing a person in Canada under one of the
extradition agreements to which Canada is a party. Article 2(1) of
the Treaty provides that:
Extradition shall be granted for conduct which constitutes an
offense punishable by the laws of both Contracting Parties by
imprisonment or other form of detention for a term exceeding one
year or any greater punishment.2
Under the Canadian Competition Act, an individual found guilty
of a conspiracy offence is liable to imprisonment for a maximum
term of 14 years or a fine of up to $25 million or both. The bid
rigging offence carries a maximum sentence of 14 years'
imprisonment, a fine amount at the discretion of the court, or
both. Under the Sherman Act, these offences carry a maximum
sentence of 10 years' imprisonment, or a $1 million fine, or
Within this case, and the earlier extradition in the Morgan
Crucible case, the U.S. DOJ has shown itself willing to go through
the legal hoops necessary to extradite foreign executives. The
DOJ's pursuit of extradition may embolden other jurisdictions
to do the same. In Canada, the Competition Bureau has secured a
number of guilty pleas from foreign nationals in connection with
their roles in international conspiracies, but, to date, it has not
sought prison sentences or extradition of any foreign nationals.
Whether this will change with DOJ's increased activity remains
to be seen.
1 As part of the DOJ's investigation into price
fixing in the carbon products industry, Ian Norris, a citizen of
the United Kingdom and former CEO of The Morgan Crucible Company
plc, was also successfully extradited to the U.S. in 2010. However,
Norris was extradited on obstruction charges. For more information,
2 Extradition Treaty Between the United States of
America and Canada, United States and Canada, 3 December 1971, CTS
1976 No 3 (entered into force 22 March 1976), amended by Protocol
Amending the Extradition Treaty with Canada, United States and
Canada, 11 January 1988, CTS 1991 No 37 (entered into force 26
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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