Arrest warrant may see cartels in dock

Date: 25/03/04

By Peter Chapman

EUROPE'S arrest warrant, together with a new UK-US extradition treaty, could land cartel ringleaders in jail in the European Union or in the US - no matter where they try to hide.

That is the stark warning from international lawyers advising big firms and their managers on how to stay on the good side of Mario Monti, the European competition commissioner, and national competition watchdogs.

Ten EU governments have already implemented the arrest warrant into their national law and the remaining five are expected to do so before June.

The ten new member states joining the European Union on 1 May are expected to follow suit.

Once adopted, the experts say, the arrest warrant will allow countries to ask authorities elsewhere in the Union to arrest criminals that are passing through or residing in their territory.

Before the advent of the warrant, law enforcement agencies could not extradite people for crimes if they were not criminal offences in the country where the perpetrator was situated.

That meant cartel ringleaders could rest easy if they resided in countries where price-fixing was not a criminal offence - even if it was punished with jail sentences in other countries.

Michael Sanders, a lawyer with Linklaters, points out that cartels do not appear in a list of 32 areas in which the so-called double criminality rule is scrapped for the purposes of the arrest warrant, agreed by EU leaders two years ago.

However, he said that, in practice, law enforcement agencies suspecting a cartel could still cite fraud - which is explicitly covered by the rules.

“It is a difficult one, but there is a possibility that an enterprising prosecutor could say it is no more than fraud,” said Sanders.

Mike Pullen, a partner with DLA, said the issue is even more clear-cut.

His reading of the warrant rules is that they would clearly enable the UK and France - which allow judges to hand out prison sentences for price fixing - to seek out and arrest perpetrators anywhere in the Union.

But he said any argument is effectively “academic”, because it can be argued that almost all cartels include elements of conspiracy to commit fraud or money laundering.

If the arrest warrant rules are still open to interpretation, the experts agree on the risks to cartel ringmasters posed by a UK-US extradition treaty, coupled with a new fast-track procedure for extradition, about to be approved by the British government.

This could mean Europe-based bosses whose activities have an impact in the United States may swiftly find themselves destined for a rendezvous with US investigators - even if they landed briefly at London's Heathrow airport in transit to, say, Asia or Latin America.

In practice, EU and US cartel watchdogs are beginning to track the same cases involving everything from vitamins to industrial aggregates.

In these instances, authorities in the US have been instigating criminal proceedings at the same time as the European Commission has been levying millions of euro in fines.

The upshot is that avoiding the US is no longer an option for bosses such as Sir Anthony Tennant, former chairman of auction house Christie's and once a pillar of the British business establishment.

Tennant refused to travel to the US to face charges about his company's cartel with rival Sotheby's.

“Traditionally people have been concerned about travelling through the US,” said Linklaters' Sanders.

“They should now add the UK to their list.”