For the first time, the US Department of Justice has succeeded in extraditing an EU citizen on antitrust charges.
Competition practitioners in Europe remember the six-year-long battle to extradite British subject Ian Norris, former head of Morgan Crucible, who was being prosecuted in the US in connection with price-fixing among coal producers. The Americans succeeded in extraditing him, and in 2010 he was sentenced to 18 months in prison. Then the basis for extradition was the alleged obstruction of justice, in the form of destruction of documents which were evidence of the existence and operation of the cartel. Extradition of Norris purely on the basis of antitrust charges was impossible was price-fixing was not punishable as a criminal offence in the UK.
From Germany to Florida
This time, according to a statement by DOJ on 4 April 2014, a citizen of the EU has for the first time been extradited to the US to face charges for participation in a conspiracy to restrict competition. In this case, Romano Pisciotti, an Italian national, was turned over by Germany to face charges in the federal court in Miami.
In 2010, Pisciotti, a one-time manager of Parker ITR Srl, a producer of marine hose, was accused of participation in agreements involving bid-rigging, price-fixing and division of the market for marine hoses in the United States. The marine hose cartel was active on a worldwide scale. In a companion case in the EU, COMP/39406 Marine Hoses, the European Commission imposed a fine of EUR 131 million on six producers. Pisciotti was arrested in Germany in June 2013.
The extradition was made possible by the nature of the cartel in which Pisciotti allegedly participated. According to DOJ, in 1999–2006 Pisciotti carried out the conspiracy by agreeing during meetings, conversations and communications to allocate shares of the marine hose market, to use a price list for marine hose to implement the conspiracy, and not to compete for customers with other marine hose sellers in bidding for installation of marine hose. Pisciotti allegedly provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to a co-conspirator who served as the coordinator of the conspiracy. Part of the conspiracy involved bid-rigging in Germany, from which the defendant was extradited, where bid-rigging is a crime (as it also is in Poland).
DOJ reports that Pisciotti faces up to 10 years in prison and USD 1 million in fines.
The successful effort by the US Department of Justice marks a new trend in international cooperation in combating cartels. Similar such cases should be expected in the future. Thus anyone in Europe considering participation in anti-competitive practices affecting the US market should also consider the danger—minimal until now—of facing criminal charges on the other side of the Atlantic.
Not the end of the story
After he was extradited, Pisciotti filed a complaint with the European Court of Human Rights. The nature of the complaint has not been disclosed. A similar step was taken by Ian Norris in the earlier case mentioned above, but was rejected by the court in Strasbourg. Pisciotti’s claim is expected to meet a similar fate, particularly since he has already been extradited. And American lawyers say that a case in Strasbourg would have no effect on the proceedings in Florida, except perhaps as a delaying tactic.
Marcin Kulesza, Competition Law Practice, Wardyński & Partners