23.01.2020

Increased Risk of Extradition in the Event of Antitrust Violations

On 10th January 2020, the Dutch national, Maria Christina Ullings, was extradited by Italian authorities to the US. She is accused of having participated in worldwide price fixing in air freight charges between January 2001 and February 2006 in her former capacity as a senior executive of Martinair Holland NV (airfreight cartel). In the USA, she now faces a prison sentence of up to ten years and a maximum fine of USD 1 million. The US Department of Justice (DoJ) has therefore once again succeeded in obtaining extradition based solely on conduct that violates antitrust law. This case shows that the risk of being extradited to third countries (in particular the United States) is still very high even many years after an initial indictment. The risk of extradition within the European Union is equally as high. Maria Ullings had already been indicted by the US District Court in Atlanta in 2010 for her involvement in price fixing, but was not arrested by the authorities until almost 10 years later – during a visit to Sicily.

Background

Legal Consequences of Violating Antitrust Law

Violations of the ban on cartels (Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and Sec.1 of the German Competition Act (“GWB”)) can have significant financial consequences for the companies involved, with administrative fines of up to 10% of the worldwide group turnover.

Moreover, in numerous jurisdictions, administrative fines can also be imposed on natural persons, or in some cases, antitrust violations can even constitute crimes which are punishable by imprisonment.

Cartel participants are therefore not only exposed to increased financial risks (administrative fines, claims for damages from employers and parties injured by a cartel), but must also expect consequences under criminal law.

As the airfreight cartel case shows, even after several years there is still a concrete threat of physical transfer to countries such as the United States where antitrust violations are criminal offences (the participants in the cartel were also sentenced to administrative fines totalling USD 1.8 billion in the United States. In addition, the European Commission also imposed administrative fines of EUR 800 million in 2010. These were subsequently reduced. A final decision on the fine is still pending.)

Requests for Extradition Are Becoming Increasingly More Successful

In as early as 2014, the italian businessman Romano Pisciotti, who was accused of involvement in the marine hoses cartel, was extradited from Germany to the USA. The legality of the extradition was confirmed by the European Court of Justice in 2018 (ECJ, decision of 10 April 2018, case no. C-191/16).

In addition, there was a whole series of further extraditions where the persons concerned were accused of antitrust violations in addition to criminal offences.

Requirements for Extradition

In principle, a country is not expected to extradite its own citizens. However, extradition can be expected in constellations where the party involved is abroad. This is shown by the Pisciotti case, where the ECJ could also not find any violation by German authorities of the ban on discrimination in the extradition of an Italian citizen.

In Germany, the requirements for extradition to foreign countries are determined by the German Act on International Cooperation in Criminal Matters ("IRG"). It is required, amongst others, that the act that the suspect is being accused of must constitute a criminal act under German law (Sec. 3 German Act on International Cooperation in Criminal Matters).

The extradition of Romano Pisciotti by the German authorities, for example, was only able to be carried out at that time because he was accused by the US authorities of an act which fell under Sec. 298 of the German Criminal Code ("StGB") – collusive tendering (bid rigging).

Consequences

The recent extradition in the air freight cartel case shows (as did the extradition in the marine hoses case) that antitrust violations are being vigorously pursued by the prosecuting authorities, particularly in the United States. All participants must be aware that cartel agreements do not only have national repercussions and that the risk of worldwide prosecution is considerable. In particular, also European nationals can and will be extradited. Therefore, it is likely that in the future the prosecution of natural persons accused of being involved in antitrust violations will even increase.

This development alone should be reason enough for companies to implement an effective compliance program in order to protect themselves and their employees.

 

Further background information on the extradition of Mr Pisciotti can be found here Luther-Newsroom.

The (English) press release issued by the DoJ can be found here.

If you have any queries please contact Dr Sebastian Janka and Roland Schiller.

Author