Tagged: double criminality

Some further reflections on Pisciotti – questioning the deterrence logic of cartel enforcement

By Christopher Harding

Thinking about the whole legal saga arising from Romano Pisciotti’s involvement in the Marine Hose Cartel, discussed recently on this blog by J. Przerwa, triggers some thoughts about how much depends on circumstance and happenstance. This is relevant to the claims often made by enforcers and lawyers regarding the deterrent effect of severe sanctions (in particular the ‘inferno’ of prison terms in the US), of dedicated enforcement efforts (in particular on the part of the US Department of Justice), and of the possibility of extradition to the US (as in Pisciotti’s case). ‘From Hollywood to Hong Kong – criminal antitrust enforcement is coming to a city near you,’ warned Scott D Hammond of the DoJ in 2002. Maybe so. But aficionados of deterrence theory should remember that in this world much depends on circumstance and happenstance.

For instance, there is the happenstance of double criminality as a basis for extradition, and that still varies among European jurisdictions in relation to the criminality of cartel offending. If Pisciotti had changed flights at Amsterdam Schiphol Airport rather than Frankfurt Airport, there would have been a crucial criminal law difference – no possibility of extradition. Moreover, Pisciotti was unaware that he was at risk, having been indicted in the US ‘under seal,’ so that he blithely disembarked at Frankfurt Airport. Then there is the happenstance of court jurisdictions, the Landgericht in Berlin seemingly more willing to raise questions with the European Court of Justice than the Bundesverfassungsgericht. And then there is the circumstance that Pisciotti’s state of nationality, Italy, appeared disinterested or unwilling to take over the legal process and possibly save its national from the ‘inferno’ of an American correctional institution.

In sum, many elements along the road may remain unpredictable or variable, while arguably there are still arguments to be played out at the EU legal level that the variability of legal position across the EU may fall foul of non-discrimination and free movement rules. Even if Pisciotti brings no further claims, this may not be the end of the legal saga, especially in the circumstance of determinedly litigious cartelists such as Romano Pisciotti or Ian Norris, a former UK executive of Morgan Crucible who underwent a somewhat similar fate: his extradition to the US was first refused by the House of Lords on grounds of price-fixing but the DoJ eventually succeeded on the basis of obstruction of justice charges (see for instance here). Let’s hope this case law will also stimulate some further reflection on the underlying deterrence logic of cartel enforcement and the long road ahead to make detection, prosecution and enforcement of sentences more predictable across Europe.

For a fuller discussion of some of these issues, there is a page on the Christopher Harding web site: www.Christopher-Harding.info.