Government Bill
22—2
As reported from the committee of the whole House
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Hon Kris Faafoi
The Parliament of New Zealand enacts as follows:
This Act is the Commerce (Criminalisation of Cartels) Amendment Act 2018.
This Act comes into force on the second anniversary of the date of Royal assent.
This Act amends the Commerce Act 1986 (the principal Act).
After section 82A, insert:
(1)
A person commits an offence if—
the person,—
in contravention of section 30(1)(a), enters into a contract or arrangement, or arrives at an understanding, that contains a cartel provision; and
intends, at that time, to engage in price fixing, restricting output, or market allocating; or
in contravention of section 30(1)(b), gives effect to a cartel provision; and
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—
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
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:
$10 million:
either,—
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
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).
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,—
the defendant and 1 or more other parties to the contract, arrangement, or understanding were involved in a collaborative activity; and
the defendant believed that the cartel provision was reasonably necessary for the purposes of the collaborative activity.
In a prosecution under section 82B(1)(b), it is a defence if, at the time of giving effect to the cartel provision,—
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
In a prosecution under section 82B(1)(b), it is a defence if—
the relevant cartel provision constitutes a restraint of trade; and
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
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
the collaborative activity did not end because the lessening of competition between any 2 or more parties became its dominant purpose.
In a prosecution under section 82B(1)(a), it is a defence if—
the cartel provision relates to restricting output or market allocating; and
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.
at the time the defendant gave effect to the cartel provision, the circumstances in subsection (6) applied.
(6)
The circumstances are that—
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
the co-operation improved the service supplied to owners or consignors of goods carried at sea; and
the cartel provision related to an activity ancillary to a specified activity (as defined in section 44A(8)); and
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.
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.
However, the defence does not apply if the defendant’s belief is based on ignorance, or mistake, of any matter of law.
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—
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.
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.
This section applies if, at the hearing or trial of a defendant, the court is satisfied that—
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
that information was not disclosed.
The court may—
exclude the evidence; or
with or without requiring the evidence to be disclosed, adjourn the hearing or trial; or
admit the evidence if it is in the interests of justice to do so; or
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.
However, if it appears to the court that the defendant was not given notice in accordance with section 82D(2), the court—
must not order the exclusion of evidence under subsection (2)(a); but
must adjourn the hearing or trial if the prosecution requests an adjournment.
Compare: 2008 No 38 s 34
In section 30, insert as subsection (2):
See section 80 for liability to a pecuniary penalty, and section 82B for criminal liability, for contravention of this section.
In section 31(1), replace “section 30(a)” with “section 30(1)(a)”.
“section 30(a)”
“section 30(1)(a)”
In section 31(2), replace “section 30(b)” with “section 30(1)(b)”.
“section 30(b)”
“section 30(1)(b)”
In section 31(3), replace “section 30(b)” with “section 30(1)(b)”.
In section 44A(4), replace “section 30(a)” with “section 30(1)(a)”.
In section 44A(5), replace “section 30(b)” with “section 30(1)(b)”.
In section 44B(1), replace “section 30(a)” with “section 30(1)(a)”.
In section 44B(2), replace “section 30(b)” with “section 30(1)(b)”.
After section 75(1)(a)(iii), insert:
proceedings for offences against section 82B:
In section 79B(1), replace “section 86B or 87B” with “section 82B, 86B, or 87B”.
“section 86B or 87B”
“section 82B, 86B, or 87B”
In section 79B(2), replace “section 86B or 87B” with “section 82B, 86B, or 87B”.
In section 80A(1)(b), after “imposed”, insert “; or”.
“imposed”
“; or”
After section 80A(1)(b), insert:
any penalty imposed on person A by the court following the conviction of person A under section 82B; or
any costs incurred by person A in defending any criminal proceedings in which person A is convicted under section 82B.
After section 82A(2), insert:
The court may not order a person to pay exemplary damages in relation to conduct for which the person has been convicted of an offence under section 82B.
After section 106A, insert:
The Solicitor-General must appoint a cartel prosecutors panel for the purpose of enabling prosecutions under section 82B to be taken speedily.
The Solicitor-General must consult with the chairperson before appointing the panel.
The panel must consist of those lawyers that the Solicitor-General considers appropriate.
Only members of the panel may conduct prosecutions under section 82B on behalf of the Crown.
In this section, lawyer has the meaning given in section 6 of the Lawyers and Conveyancers Act 2006.
In Schedule 1AA, clause 2(1), replace “Section 30(a)” with “Section 30(1)(a)”.
“Section 30(a)”
“Section 30(1)(a)”
In Schedule 1AA, clause 2(2), replace “Section 30(b)” with “Section 30(1)(b)”.
“Section 30(b)”
“Section 30(1)(b)”
In Schedule 1AA, clause 2(4), replace “section 30(b)” with “section 30(1)(b)”.
This section amends the Criminal Procedure Act 2011.
In Schedule 1, Part 2, insert in its appropriate alphabetical order:
15 February 2018
Introduction (Bill 22–1)
20 February 2018
First reading and referral to Economic Development, Science and Innovation Committee
17 August 2018
Reported from Economic Development, Science and Innovation Committee
25 October 2018
Second reading
13 March 2019
Committee of the whole House (Bill 22–2)
Third reading