On Friday, Commerce Minister Craig Foss released a Supplementary Order Paper ("SOP") in the House providing a number of final amendments to the Commerce (Cartels and Other Matters) Amendment Bill ("Bill"). The most significant amendment is the information that for procedural purposes, Cartel Conduct will be treated as a Category Four offence, the most serious possible and the same category as Murder, Treason and Terrorism.
The result is that trials for criminal Cartel Conduct will occur in the High Court, with the defendant able to elect trial by judge-alone or jury, although the Judge will retain the discretion to order a judge-alone trial where the trial will be long and complex on the basis that the trial is likely to be longer than 20 sitting days and the jurors will not be able to perform their duties effectively. Given the potentially complex requirements of a cartel trial we anticipate that the exercise of this discretion may be common, particularly in cases involving a number of defendants and a string of alleged offending.1 Warrants for arrest can be issued if the defendant does not appear for trial.2
The classification, and the addition of a further penalty of a fine of up to $500,000 again evidences the seriousness with which Parliament regards cartel conduct, and suggests a desire to align with the sanctions imposed by New Zealand's major trading partners.
As well as classifying cartel conduct as a Category Four offence, the SOP also makes a number of minor changes including:
- clarifying the sections dealing with overseas acquisitions that affect a market in New Zealand and giving the High Court the ability to declare that an overseas acquisition has given a person effective control over a New Zealand body corporate;
- making minor amendments to the wording of the collaborative activities and vertical supply contracts exemptions;
- clarifying that reliance on the collaborative activities honest belief defence must be notified within 20 working days of pleading not-guilty; and
- giving the Commission a discretionary ability to refund fees paid for clearances (currently this can only occur for authorisations).
Likely passage of the Bill
The introduction of the SOP emphasises that the Bill is now in its very final stages before Parliament. As stated in previous alerts, we anticipate that the Bill will be passed in early 2014, although there is a nine month grace period on civil enforcement and criminal penalties do not come into force for a further two years. The Commission has indicated that further detail about the use of the Criminal provisions will follow during this period.