The United States Department of Justice has announced “its first-ever successfully litigated extradition of a foreign citizen to the United States in a federal criminal antitrust case” – the extradition to the US from Germany of an Italian citizen, indicted in the so-called marine hose cartel, and his subsequent conviction in federal court.
The accused, who had been indicted in 2010, was arrested in 2013 at a stopover in Frankfurt while he was en route home from Nigeria. In April 2014, he was flown to Miami, where he appeared in court. Two weeks later, on 24 April 2014, he pleaded guilty and was sentenced to pay a fine of US$50,000 and to serve two years in prison (less the “time served” credit for the nine months he was held in German custody during his extradition challenge). His sentence and fine could have been worse: under 15 US Code §1, the maximum penalty is 10 years in prison and the maximum fine is US$1 million.
THE LEGAL ISSUES SURROUNDING EXTRADITION
The DOJ has long made it clear that it would seek the conviction of foreign nationals participating in violations of US antitrust law. But up until this case, it had not been able to extradite any defendants – primarily because it is very difficult to meet the legal requirements around such extraditions. One of the main obstacles is the principle of dual criminality that the alleged behaviour must also constitute a criminal offence in the country extraditing an accused individual. However, in many jurisdictions, anticompetitive behaviour only constitutes an administrative offence, which is not sufficient grounds for extradition (for Germany see sec. 3 para. 1 and 2 of the Act on International Cooperation in Criminal Matters).
The DOJ’s difficulties are aggravated by the prohibition of ex post facto laws, which is why an extradition on account of a breach of the Sherman Act was not possible in the case of Mr. Ian Norris in 2008 (although it was subsequently approved by reason of an obstruction of justice in 2010). However, since more and more jurisdictions are adopting criminal laws against hardcore cartel activities, the highest hurdle for the DOJ is the fact that many countries do not extradite their own citizens (in Germany, this is pursuant to Article 16 of the German Constitution).
WHY DID THIS EXTRADITION SUCCEED?
In the current case, the German courts were able to approve the extradition of the defendant because he was accused of participating in bid rigging, which is not only a breach of German competition law but also a criminal offence pursuant to § 298 of the German penal code. There were also no problems arising from the prohibition of ex post facto laws, since the provision has been in existence since 1997. Moreover, the former executive is neither a German citizen nor was he able to establish that his extradition constituted discrimination on grounds of nationality (i.e., a breach of Article 18 of the Treaty on the Functioning of the European Union).
WHAT THIS MEANS FOR THOSE POTENTIALLY FACING INDICTMENT
The business world now sees that the US DOJ can succeed in extraditing and convicting a US-indicted foreign national in an antitrust case. This outcome offers several key points to consider.
Most of all, this case shows that the DOJ is taking a more vigorous, and effective, approach to prosecuting criminal offences in antitrust matters. This vigorous approach, and the appetite for its potential outcome, is not going to go away.
A more immediate consequence is already being faced by US-indicted executives, who may find that the most ordinary international business travel has become a minefield. It is no longer enough never to enter US territory. Indicted executives may find themselves plotting ornate routes to avoid being detained.
Next, the DOJ could also use the outcome of this case as leverage against other indicted individuals – for instance, to encourage them to divulge information.
Finally, as it becomes easier – or more thinkable – for prosecutors to extradite those indicted in antitrust cases, defense lawyers may find it more difficult to plea bargain for their clients. Those caught in the net could find themselves not only extradited and convicted, but receiving higher fines and longer sentences.
Thus, although it is still not clear whether the DOJ will be able to, or intends to, litigate extraditions on a regular basis, it would be imprudent to ignore the recent events when considering a defence strategy regarding violations of US antitrust law.