OFT brings first criminal cartel charges against individuals

On 19 December 2007 the Office of Fair Trading (OFT) announced that three UK businessmen have been charged with criminal cartel offences under the Enterprise Act 2002. This is the first time that such charges have been brought since the introduction of the criminal cartel offence in 2003. The maximum penalty for the criminal cartel offence is five years prison term and/or an unlimited fine.

The charges concern an alleged cartel for marine hose, which is used by the oil and defence industries for transporting oil between tankers and storage facilities.

The individuals, together with nationals from other countries, were arrested in Houston USA while attending an industry conference. They pleaded guilty to violations of US antitrust law. The individuals were allowed to return to the UK to face charges as part of a plea bargain agreement with the US Department of Justice (DoJ). They were arrested on arrival in the UK and have been released on bail to appear before magistrates early in 2008.

These charges follow an investigation which saw the OFT working closely with competition authorities around the world, most notably the DoJ and the European Commission. The European Commission continues its separate investigation under Article 81 into the activities of the companies concerned.

The OFT has characterised this development as “highly significant … in both the UK’s own competition regime and in international cooperation against cartels” and noted this sends a clear message to business that the OFT takes its enforcement responsibilities seriously.

As this involves the first ever UK criminal cartel prosecution it will be followed closely and will shape the development of UK competition law.