Day 2 Breakout Session 1 Criminal, civil and administrative regimes

1. Day 2Breakout Session 1Criminal, civil and administrative regimes Monique van Oers, NMa and Toshiko Igarashi, JFTC

2. Hypothetical Case Global Crop Protection Chemical Market CropPro （HQ in US) AgForce （HQ in Australia) RuralPro (HQ in France) CropProPlus (off patent in 2008) AgForcePlus (off patent in July 2006) RuralProPlus (off patent in May 2012) 60% Market Share Cartel Agreement including price fixing, market sharing and output restrictions to prevent emergence of low cost generics

3. How do different jurisdictions approach the hypothetical case ? CropPro sought a marker in Canada, the European Union, Japan, and the United States, and intends to seek a marker in a number of other jurisdictions. CropPro, AgForce and RuralPro have manufacturing facilities around the world and each has a sales office in the capital city of all countries with ICN membership. How is the hypothetical case investigated and decided in the jurisdictions where a marker is sought? How does it work in other countries?

4. Difference of competition regimes around the world Reference: Case Resolution Chapter, ICN Cartel Working Group Anti Cartel Enforcement Manual (http://internationalcompetitionnetwork.org/uploads/library/doc834.pdf)

5. Japan’s example “DOKKIN” JFTC’s official character • Hybrid system of both administrative and criminal procedures. (The victims of the cartels can also claim for private damages at the civil court.) • The JFTC has the discretion to initiate either criminal or administrative proceeding based on the evidence initially available as well as the gravity and viciousness of the violation. • Criminal : When the JFTC decides to seek a criminal case after its compulsory investigation, the JFTC files an accusation with the Prosecutor General. • Administrative (most of the cases): The JFTC issues a cease and desist order and a surcharge payment order after its administrative investigationand necessary procedures.

6. Criminal, Administrative, and Civil procedures in Japan Public Enforcement Criminal Private Enforcement (Civil) Administrative JFTC (compulsory investigation for criminal cases) JFTC (administrative investigation) (Draft Written Order& Opportunity to present opinion and evidence) Victim of the cartel Initialproceedings Accusation Public Prosecutor’s Office File for a damage claim Investigation Indictment District Criminal Court District Civil Court ・cease and desist order ・ surcharge payment order When orders become final Enforcement & sanctions ・payment for damages (based on AMA/Civil Law) ・ criminal charges (fines and imprisonment) Hearing by the JFTC (Administrative Appeal) Judicial appeal (High Court) Judicial Appeal Appeal Judicial Appeal (Tokyo High Court)

7. When CropPro applies for a marker in Japan…. “DOKKIN” JFTC’s official character • A total of 5 violators before and after the JFTC’s investigation will be permitted to file leniency applications. (Up to 3 applicants after the investigation start date.) • If CropPro is the first leniency applicant before the initiation of the JFTC’s investigation, it will be exempted from surcharges. • If AgForce and/or RuralPro apply for leniency, they may also be permitted. • If the JFTC decides to initiate the administrative proceeding based on the evidence submitted by Crop Pro: • The JFTC will send the draft cease and desist order and surcharge payment order to the expected respondents after the investigation. • The expected respondents are provided with an opportunity to present their arguments and evidence to the JFTC before the orders become final.

8. How the hypo case can be treated in your jurisdiction? Can CropPro apply for leniency in your jurisdiction? How about AgForce and RuralPro? By which institution and how the hypo case is investigated in your jurisdiction? Which institution decide on the hypo case and whether/how the decision is claimed?

9. Leniency programs of the jurisdictions where CropPro applies for a marker

10. Procedures for a cartel case in the US Public Enforcement Private Enforcement (Civil) Criminal US Department of Justice (preliminary inquiry) Direct Victim of the cartel Initialproceedings Information/Recommendation for indictment FBI US District Court (Grand Jury Investigation) Investigation Search Warrant File for a damage claim Information/Indictment US District Court Negotiated Plea Agreement Enforcement & sanctions Judgement ・ criminal charges (fines and imprisonment) (Settlement) ・payment for damages (treble damageｓ) US Court of Appeals Appeal US Supreme Court

11. Procedures for a cartel case in the EU (DG Comp) Public Enforcement Private Enforcement (Civil) Administrative/Civil DG Comp (Preliminary Inquiry) (Formal Inquiry) (Statement of Objections) (Access to file, Reply to SO, Oral hearing, etc,) Victim of the cartel Initialproceedings Investigation File for a damage claim National Civil Court Decision ・order ・ Fines (Settlement) Enforcement & sanctions ・payment for damages Court of First Instance Appeal Judicial Appeal European Court of Justice

12. Procedures for a cartel case in Canada Public Enforcement Private Enforcement (Civil) Criminal Competition Bureau Victim of the cartel Initialproceedings Reference Attorney General (Canada/Province) Investigation File for a damage claim prosecution Criminal Court (Federal/Superior court of province) Federal Court Enforcement & sanctions ・payment for damages ・ criminal charges (fines and imprisonment) Appeal Judicial Appeal Judicial Appeal

13. A closer look at the differences across different procedures /regimes investigative tools role of the agency use of leniency instruments position of a leniency applicant burden of proof and use of evidence possible sanctions possibility of settlement cooperation with other agencies

14. Statements for Discussion (To be updated further) A reliable leniency program is determining the success of an enforcement system

15. Evidence based on statements of leniency applicants will trigger the need of cross examinations. This makes criminal systems more apt for the enforcement of competition rules .

16. For competition authorities, settlements are a safe way out.

17. Cartel enforcement is benefited by the exchange of evidence between competition authorities. Understanding eachother’s enforcement system is crucial – it is, however, the direct contact (network) between case handlers that makes cooperation work.

18. Competition authorities could make more use of each others’ successes in enforcement actions.

19. Thank you very muchfor your participation in the discussion! Disclaimer: the views expressed in this presentation are those of the moderators and do not necessarily reflect those of the organizations that the moderators belong to.