Managers and executives can be punished personally for cartel infringements committed under their watch. In the Netherlands, the preferred penalty is imposing a fine of up to EUR 450,000. In other countries, however, managers and executives can face jail-time. A recent press release by the U.S. Department of Justice serves as a reminder that legal counsel are to advise their board and subordinates of the personal risks involved in running a cartel.
This week, the U.S. Department of Justice announced a third executive pleaded guilty and was sentenced to 15 months in a U.S. prison, in addition to a USD 20,000 criminal fine. The charges concerned his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo (e.g. cars and trucks).
This time, it concerned an employee from Nippon Yusen Kabushiki Kaisha (NYK). Previously in the same cartel, two executives from another company were imprisoned, Kawasaki Kisen Kaisha (K-Line). One was put away for 18 months, in addition to a USD 20,000 criminal fine; the other faces a 14 months jail-time, also in addition to a USD 20,000 criminal fine.
Under the Sherman Act, which stipulates the main U.S. antitrust rules, individual managers and executives face a maximum sentence of 10 years in prison and a USD 1 million criminal fine. It is important to note not only (statutory) directors are subject to such scrutiny. In these cases, for example, the (former) employees were at various times assistant managers, team leaders and general managers.
The U.S. Department of Justice makes clear that the U.S. is committed to seeking out cartels – and punishing the persons involved:
“For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division. “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable".
Aside from these individual plea agreements, this cartel investigation features three corporations that have agreed to plead guilty and to pay criminal fines totaling more than USD 136 million.
All plea agreements are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs.