The New Zealand Commerce Commission (NZCC) has been busy on the criminal enforcement front. Weeks after it successfully completed its first criminal prosecution under the New Zealand Crimes Act (see our previous post), the NZCC has published new Criminal Prosecution Guidelines which provide greater public guidance on the circumstances in which it will initiate criminal proceedings and the principles and practices that will apply.
The new guidelines, published on 1 October 2013, foreshadow the enactment of the Commerce (Cartels and Other Matters) Amendment Bill, which is expected to be passed later this year and will criminalise cartel conduct. Cartel conduct was criminalised in Australia in July 2009 so the enactment of this Bill will bring New Zealand in line with Australia.
The guidelines make clear that the NZCC will only commence a criminal prosecution in circumstances where:
- the evidence provides a “reasonable prospect of conviction”; and
- the prosecution is in the public interest.
This is the same test that applies for other criminal prosecutions in New Zealand, set out in the Solicitor-General of New Zealand’s Prosecution Guidelines. Where the test is not satisfied, the NZCC may still have the option to commence civil proceedings for a penalty, compensation, declaration or other remedy.
In making an overall assessment of the public interest, the guidelines state that the NZCC will consider the seriousness of the offence and any likely penalty or sentence, weighed against the cost of the proceedings (including the NZCC’s resources and funding).
Although criminal penalties for cartel conduct are still a fair way off in New Zealand, as the relevant provisions will not come into force until two years after the proposed Bill is passed, the new guidelines apply immediately to NZCC criminal prosecutions under other Acts including the New Zealand Fair Trading Act and the Crimes Act.
Publication of these guidelines is another step towards a greater potential for criminal liability for directors and executives involved in business in New Zealand. We will continue to monitor developments.