1. Non-Discretionary Administrative Sanctions under the AMA in Japan
Takujiro Kono
Senior Investigator, Investigation Bureau
Japan Fair Trade Commission
ICN CWG SG1
3rd call series
Tuesday, 10 February

2. Public Prosecutors Office
Dual Sanctioning System under the AMA
Hardcore Cartel
Administrative procedure or
Criminal procedure ?
･Indirect compulsory investigation
･Aiming at administrative measures(cease and desist order & surcharge payment order)
Criminal procedure
･Compulsory investigation with court permit
･Aiming at criminal accusation
<Policy Statement>
The JFTC will actively accuse･･･
･　Vicious and serious cases which have a significant adverse impact on the public
･　Repeat offenders
But the first leniency applicant　would not be accused.
Worthy of Accusation
After criminal Accusation
Criminal　
Accusation
Administrative Measures
・Surcharge payment order
・Cease and desist order
-PPO can’t indict without JFTC’s accusation
-Consultation between JFTC and PPO
・Criminal penalty
Companies
Indictment
Public Prosecutors Office
(PPO)
Individuals

3. Characteristics of Non-Discretionary Administrative Sanctions
Non-Discretionary Administrative Surcharges (by JFTC)
Criminal Fines
(by Court)
JFTC’s Surcharge Payment Order (to companies only)
JFTC MUST order: except for (1) The 1st leniency applicant, (2)Small amounts (3)Statute of limitation (5 years).
Automatically calculated: AFFECTED SALES(*) during the period multiplied by FIXED RATE(**)
(*) Affected Sales must be calculated exactly (Accumulation of historical sales data during the period of Max 3 years)
(**) Basic Rate:10%
Recidivism, Leading Role:15%
Early termination:8%
Retail Business:3%
Wholesale Business:2%, etc.
(***) Half of criminal fines is deducted
Court’s Criminal Judgment (to companies and individuals)
DISCRETIONARY FACTORS:
Accusation Phase(JFTC’s discretion under policy statement (see previous page))
Indictment Phase(PPO’s discretion)
Judgment Phase(the court’s discretion(*))
(*)Elements considered in past judgments
Size of the company
Organized violation
Impact on the public
Leading role
Amount of unfair/private profit
Degree of cooperation with investigation
Social sanction
Reason for involvement in violation
Statement of self-review
Having a criminal record etc.

4. Administrative Cease and Desist Order (by JFTC)
JFTC’s Cease and Desist Order (to companies only)
JFTC MAY order to
Cease and desist the conducts, and/or
Take any OTHER MEASURES NECESSARY to eliminate cartel
DISCRETIONARY FACTORS:
Whether or not to order
To which companies
Elements considered in past administrative cases (JFTC can order to past violation, if necessary, within 5 years of statute of limitations.)
Long history of cartel offence
Cartel ended not because of their own decision but because merely of being investigated by competition authorities
Other elements concerning possibility of repeating the violation
Contents of order
For Example,
Make employees thoroughly informed about guidelines on compliance with the AMA
Resolution of Board of Directors on confirmation that cartel had been terminated
Personnel changes (Specific individuals transferred from certain sales functions) etc.

5. Comparison of Administrative Surcharges and Criminal Fines in Real Cases
Administrative Surcharges (approx.)
Criminal Penalties (fines and imprisonment)
Industrial and Automotive Bearings (Cartel: 2012)
Two companies:
509 million to 7.2 billion in Japanese Yen
Corporate fines:
JPY 180 million to 380 million
Imprisonments: 1year to 1year and 2months (suspended sentence)
*as of Oct. 2014, one company and two individuals in trial
Galvanized Steel Sheets (Cartel: 2009)
Three companies:
JPY 3.7 billion to 6.3 billion
JPY 160 million to 180 million
Imprisonments: 10months to 1year (suspended sentence)
Steel Bridge Construction (Bid Rigging: )
44 companies:
JPY 4 million to 854 million
JPY 160 million to 640 million
Imprisonments: 1year to 2year and 6months (suspended sentence)
Since surcharges are calculated automatically, the amount of surcharges can be far larger than that of fines.

6. No Discretion in JFTC Surcharge
Q: Is it possible to abstain from Imposing surcharges? A: JFTC has no discretion to abstain from impose surcharges. Q: What is the basis for the calculation? Are indirect sales counted/considered to prevent under-deterrence? A: Surcharges are calculated from the cartelized sales amounts during the period of violation (Max 3 years) multiplied by calculation rates. Indirect sales are out of the basis of the calculation. Q: Is it possible to reduce surcharges, depending on the degree of cooperation? A: JFTC has no discretion to take into account the degree of cooperation of company in setting surcharges. Under the leniency program, fixed rate reduction is available for leniency applicants who meet the conditions of the program; but JFTC has no discretion to evaluate the degree of cooperation and the value of evidence submitted in the leniency program. Q: Is it possible to reduce surcharges, depending on sanctions already imposed by another agency to prevent over-deterrence? A: JFTC is not allowed to take into account sanctions imposed by another agency, except for corporate criminal fines imposed by domestic court decisions.

7. Thank you for your attention !