[140813.EN.SEA] New Zealand To Criminalize Cartels With Big Fines And Seven Years

NEW ZEALAND's Parliament is expected to criminalise cartel behaviour by the end of this year or early next year, outlawing activities such as price-fixing whereby companies collude to control prices of goods and services, as well as restricting output to limit production or supply of goods and services.

A third outlawed activity will be market allocating to prevent companies within the same industry from dividing up particular classes of customers or geographic areas between themselves.

The new bill coming before Parliament, called the Commerce (Cartels and Other Matters) Amendment Bill, will turn anti-competitive activity into a "serious white collar crime" with jail sentences of up to seven years for individuals participating in a cartel and civil penalties of NZ$500,000 (US$400,000). Companies found to have engaged in cartel activity can be fined up to NZ$10 million, reports New Zealand Herald.

The change in the law comes after Air New Zealand paid out NZ$8 million In June for participating in an air cargo price-fixing cartel with other airlines.

"People need to get their head around that this is going to be serious white collar crime. It's going to be like insider trading, like the cases against the finance company directors [involving Crimes Act charges]," Simpson Grierson partner Anne Callinan said.

The report said there will be a two-year window from the passing of the bill to when an individual can go to prison after being found guilty of cartel behaviour by the Commerce Commission.

According to Ms Callinan, companies involved in joint ventures that have positive impacts on competition and the economy will be exempt from what is called "collaborative activity."

Companies can also check if certain activities would breach the law through a clearance register that is to be established.

Source : HKSG.