On April 4, 2014, the U.S. Department of Justice (DOJ) announced its first-ever successfully litigated extradition of a foreign citizen to the United States in a federal criminal antitrust case. This was an inevitable next step in the decades-long internationalization of federal criminal antitrust enforcement.
Before this development, foreign citizens had long been prosecuted under U.S. antitrust laws when found here after indictment. So too, foreign nationals abroad have sometimes chosen to submit to U.S. jurisdiction. The recent prosecutions in the DOJ’s global auto parts and LCD investigations, for example, have yielded several cases of Japanese and Korean citizens who chose this course, even though the prospect of their compelled extradition to the United States was uncertain.
For years, federal prosecutors have been hampered by the inability to successfully litigate extraditions of foreign citizens to the United States for antitrust violations. Extradition treaties require that the charged conduct be serious crimes under the laws of both the requesting and requested countries. Even today, in many countries, antitrust violations are not crimes, and therefore cannot be the subject of extradition. Some countries have classified antitrust violations as crimes, but have not provided sufficient punishment to bring them within the extradition treaties.
A notable example of this was Great Britain until 2003, when its criminal anti-competition law was stiffened. No antitrust crime committed before that date could provide grounds for extradition to the United States, as shown in the notorious case of United States of America v. Ian P. Norris.1 In Norris, the government could only extradite the defendant for obstruction of the antitrust investigation and not for the antitrust offenses themselves. The DOJ was ultimately able to manage that obstruction prosecution successfully, and Mr. Norris wound up with a sentence of 33 months in a U.S. jail anyway.
In any event, adequate criminalization, for extradition, of anti-competition offenses has been sweeping right across the globe in the last decade. The April 4 announcement of the extradition of Romano Pisciotti, an Italian national, from Germany to the United States on a federal antitrust indictment reveals the sea change.
Mr. Pisciotti was indicted in 2010 – though the indictment was not unsealed until 2013 – for conspiring to restrain trade in violation of the Sherman Act (15 U.S.C. § 1), as part of the DOJ’s long-running marine hose antitrust investigation. So far, five companies and nine individuals have pled guilty in connection with the conspiracy, which centered on the market for flexible hose that the petroleum industry uses to transfer oil between tankers and storage facilities.
The one-count felony indictment alleges that Mr. Pisciotti, an executive of Italian marine hose manufacturer Parker ITR S.r.l., participated in a price-fixing conspiracy. The alleged conspiracy was to allocate the marine hose market among Parker ITR and its competitors. U.S. jurisdiction appears to be based on allegations that (i) some of the products were sold in the United States at inflated prices, and (ii) there were U.S. communications by the defendant via telephone, faxes and e-mail in furtherance of the conspiracy.
To be sure, the chances for extradition of foreign nationals to the United States on antitrust charges will remain dependent on requested countries’ own laws and political circumstances. Though modern extradition treaties often contemplate extradition of the requested country’s own citizens, this matter involved a German extradition of an Italian (and not a German) citizen. Even so, the clear message of this case to the international business community is that the United States intends to persist in its efforts to be a global enforcer of its own trade laws.
As for this first successfully litigated extradition, it was a long time coming and it will be a long time gone.2
1 See Pepper Hamilton LLP Antitrust Client Alerts, Lessons on How to Avoid Making a Bad Situation Even Worse – The Antitrust Investigation of Morgan Crucible and the Obstruction of Justice Conviction of its Former Chief Executive Officer (July 29, 2010) and The Sentencing of Morgan Crucible’s Ian Norris (Dec. 16, 2010).
2 From Long Time Gone, Crosby, Stills & Nash.
Jeremy D. Frey and William Gibson