On April 4, 2014, the U.S. Department of Justice announced the successful extradition from Germany of Italian Romano Pisciotti under Section 1 of the Sherman Antitrust Act, arising from his alleged role in the global conspiracy to rig bids, fix prices and share out markets for marine hoses sold in the United States.
Bill Baer, Assistant Attorney General in charge of the Department of Justice's Antitrust Division, announced that this was the first extradition of its kind on antitrust charges. According to the Department of Justice Press release, in August 2010, the Department filed a one-count felony charge against Pisciotti, a former executive with Parker ITR Srl, in the Southern District of Florida. Prosecutors say that from 1999 to 2006, Pisciotti passed information from U.S. customers to co-conspirators about upcoming projects installing marine hoses, which are rubber parts used to transfer oil between tankers and storage facilities. Prices for hundreds of millions of dollars in sales of marine hose and related products were allegedly affected during the period of the conspiracy. Pisciotti was arrested in Germany in June 2013 and arrived in Miami on April 3, 2014. If found guilty of violating the Sherman Act, Pisciotti faces a maximum of 10 years in prison and a criminal fine of US$1 million. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The Antitrust Division has long expressed its intention to pursue foreign executives for antitrust crimes in the United States, but until now, those efforts have often been hindered by provisions in the U.S.'s bilateral extradition treaties, requiring that the alleged conduct be considered a crime, as opposed to a civil violation, in both the U.S. and the foreign country in order for a sovereign nation to allow extradition of an individual to the U.S. to face criminal charges. This principle of "dual criminality" has in the past prevented the U.S. from extraditing alleged price fixers from countries without criminal antitrust laws.
Perhaps the most high profile prior attempt by the U.S. at extraditing an individual on an antitrust charge was the 2004 request for UK national, Ian Norris, the former Morgan Crucible Chief Executive. The U.S. alleged that Norris was involved in fixing prices of certain carbon products during the 1990s. In 2008, the House of Lords ruled that the alleged conduct did not amount to a criminal offence in the UK at the time of the conduct, since the UK did not introduce a criminal cartel offence until 2003. Accordingly, the requirement of dual criminality was not satisfied. The U.S. was able to extradite and prosecute Norris, but only by relying on a separate charge of obstruction of justice, which was a crime in both jurisdictions.
While the Department of Justice did not specify in its April 4 press release the grounds for Pisciotti's extradition, Germany and the U.S. have a bilateral extradition treaty that provides (like most extradition treaties) that Germany will extradite individuals to the U.S. only if its own laws also criminalize an "offense committed in similar circumstances." The principle of dual criminality was likely satisfied here based on the fact that German law criminalizes bid-rigging.
The barriers to extradition are evidently shrinking in light of the increasing criminalization of cartels around the globe, as other countries adopt criminal antitrust regimes similar to that in the U.S. In addition, foreign authorities may be taking a more liberal approach to the enforcement of dual criminality provisions in extradition treaties such as that between the U.S. and Germany. This successful extradition is indicative of the U.S. government's increasingly aggressive pursuit of foreign nationals who violate U.S. antitrust laws. "This marks a significant step forward in our ongoing efforts to work with our international antitrust colleagues to ensure that those who seek to subvert U.S. law are brought to justice," said Baer.