Commerce (Criminalisation of Cartels) Amendment Bill

  • enacted

Part 1 Criminalisation of cartels

4 New sections 82B and 82C to 82E inserted

After section 82A, insert:

82B Offence relating to cartel prohibition

(1)

A person commits an offence if—

(a)

the person,—

(i)

in contravention of section 30(1)(a), enters into a contract or arrangement, or arrives at an understanding, that contains a cartel provision; and

(ii)

intends, at that time, to engage in price fixing, restricting output, or market allocating; or

(b)

the person,—

(i)

in contravention of section 30(1)(b), gives effect to a cartel provision; and

(ii)

intends, at the time the cartel provision is given effect to, to engage in price fixing, restricting output, or market allocating.

(2)

A defendant that wishes to claim that an exception in section 31, 32, 33, 44A(4) or (5), or 44B applies, or to rely on a defence in section 82C, must

(a)

notify the prosecution of that fact within 20 working days after the defendant pleads not guilty (or at any later time with the leave of the court); and

(b)

at the same time, provide sufficient details about the application of the relevant section to fully and fairly inform the prosecution of the manner in which the exception or defence is claimed to apply.

(3)

An individual who commits an offence against this section is liable on conviction to imprisonment for a term not exceeding 7 years or a fine not exceeding $500,000, or both.

(4)

A person other than an individual that commits an offence against this section is liable on conviction to a fine not exceeding the greater of the following:

(a)

$10 million:

(b)

either,—

(i)

if it can be readily ascertained and if the court is satisfied that the offence occurred in the course of producing a commercial gain, 3 times the value of any commercial gain resulting from the contravention; or

(ii)

if the commercial gain cannot be readily ascertained, 10% of the turnover of the person and all its interconnected bodies corporate (if any) in each accounting period in which the contravention occurred.

(5)

See the exceptions set out in Part 2, which relate to conduct that would otherwise contravene section 30(1)(a) or (b).

82C Defences in prosecution under section 82B
Defences in relation to collaborative activity

(1)

In a prosecution under section 82B(1)(a), it is a defence if, at the time of entering into the contract or arrangement, or arriving at the understanding, containing a cartel provision,

(a)

the defendant and 1 or more other parties to the contract, arrangement, or understanding were involved in a collaborative activity; and

(b)

the defendant believed that the cartel provision was reasonably necessary for the purposes of the collaborative activity.

(2)

In a prosecution under section 82B(1)(b), it is a defence if, at the time of giving effect to the cartel provision,

(a)

the defendant and 1 or more other parties to the contract, arrangement, or understanding that contains the cartel provision were involved in a collaborative activity; and

(b)

the defendant believed that the cartel provision was reasonably necessary for the purposes of the collaborative activity.

(3)

In a prosecution under section 82B(1)(b), it is a defence if

(a)

the relevant cartel provision constitutes a restraint of trade; and

(b)

the defendant and 1 or more other parties to the contract, arrangement, or understanding were involved in a collaborative activity that ended before the defendant gave effect to the provision; and

(c)

at the time of giving effect to the provision, the defendant believed that the cartel provision was reasonably necessary for the purpose of the collaborative activity; and

(d)

the collaborative activity did not end because the lessening of competition between any 2 or more parties became its dominant purpose.

Defences in relation to international liner shipping service

(4)

In a prosecution under section 82B(1)(a), it is a defence if

(a)

the cartel provision relates to restricting output or market allocating; and

(b)

at the time the defendant entered into the contract or arrangement, or arrived at the understanding, containing the provision, the circumstances in subsection (6) applied.

(5)

In a prosecution under section 82B(1)(b), it is a defence if

(a)

the cartel provision relates to restricting output or market allocating; and

(b)

at the time the defendant gave effect to the cartel provision, the circumstances in subsection (6) applied.

(6)

The circumstances are that

(a)

the defendant and all other parties to the contract, arrangement, or understanding that contains the cartel provision were supplying an international liner shipping service in co-operation with each other; and

(b)

the co-operation improved the service supplied to owners or consignors of goods carried at sea; and

(c)

the cartel provision related to an activity ancillary to a specified activity (as defined in section 44A(8)); and

(d)

the defendant believed that the ancillary activity was reasonably necessary for the purposes of the co-operation.

(7)

For the purposes of subsection (6)(a), parties to the contract, arrangement, or understanding excludes persons who are parties only because section 30B(a) applies.

82C Defence relating to exceptions to cartel prohibition

(1)

In a prosecution under section 82B, it is a defence if, at the time of the alleged contravention, the defendant believed on reasonable grounds that 1 or more of the exceptions set out in Part 2 applied in relation to the conduct that constituted the alleged contravention.

(2)

However, the defence does not apply if the defendant’s belief is based on ignorance, or mistake, of any matter of law.

82D Disclosure by defendant in cartel prosecution

(1)

A defendant that wishes to claim that an exception set out in Part 2 applied in relation to the conduct that constituted the alleged contravention, or to rely on the defence in section 82C, must

(a)

notify the prosecution of that fact within 20 working days after the defendant pleads not guilty (or at any later time with the leave of the court); and

(b)

at the same time, provide sufficient details about the application of the relevant section to inform the prosecution about how the exception is claimed to have applied or how the defence will be relied on.

(2)

The court or the Registrar of the court must give written notice of the requirements in subsection (1) to a defendant who pleads not guilty.

82E Consequences of failure to disclose under section 82D

(1)

This section applies if, at the hearing or trial of a defendant, the court is satisfied that

(a)

evidence sought to be adduced by the defendant is, or is based on, information that should have been disclosed to the prosecution under section 82D; and

(b)

that information was not disclosed.

(2)

The court may

(a)

exclude the evidence; or

(b)

with or without requiring the evidence to be disclosed, adjourn the hearing or trial; or

(c)

admit the evidence if it is in the interests of justice to do so; or

(d)

exercise its powers under any other enactment or rule of law that deals with the failure of a party to comply with the directions of the court.

(3)

However, if it appears to the court that the defendant was not given notice in accordance with section 82D(2), the court

(a)

must not order the exclusion of evidence under subsection (2)(a); but

(b)

must adjourn the hearing or trial if the prosecution requests an adjournment.

Compare: 2008 No 38 s 34