1. Day 2 Breakout Session 1 Criminal, civil and administrative regimes
Monique van Oers, NMa
and
Toshiko Igarashi, JFTC
Self introduction
Explain the format of the session (TBD between moderators)
10 minutes (max) : introduction to the topic
15-20 minutes : differences and similarities among different jurisdictions (Ask participants about their competition regimes and leniency programs & get comments from participants)
25-30 minutes : discussion on the statements
(4) 5 minutes : summary

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
This slide shows a brief overview of the hypothetical case.
CropPro, AgForce, and RuralPro together occupy 60% market share of the global crop protection chemical market. Their main products, CropProPlus, AgForcePlus and RuralProPlus, one by one come off patent, and to prevent the emergence of cheap generic competitors, they grant each other to produce generic products and conclude a cartel agreement to keep their generic products at 60% of the brand products.
They also exchanged the schedule of maintenance to jointly adjust excess capacity to prevent the entry of new generic competitors.
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?
In the hypothetical case, CropPro, AgForce and RuralPro have a number of manufacturing facilities around the world and sales offices in the capital city of all countries with ICN membership. Among them, 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.
So, think about how is this case investigated and decided in the jurisdictions where a marker is sought and in other jurisdictions.

4. Difference of competition regimes around the world
Criminal
Administrative
Civil
Investigation
Competition agency, Prosecutor’s office, Police, etc.
(Generally) Competition agency (sometimes initiate the prosecution)
Decision
Approved and imposed by the court
Generally decided and imposed by the competition agency
Sanction
Criminal sanctions on companies (fines) and /or individuals (both fines and imprisonment)
Administrative/Civil sanctions on companies and/or individuals (cease and desist order, disqualification order, financial penalties, etc.)
In considering how the hypothetical case is investigated and decided, difference of competition regimes may matter.
Roughly speaking, there are criminal, administrative, civil or the hybrids of these procedures to seek a cartel case and/or compensate cartel damages.
It is difficult to categorize the types of regimes, but, based on some studies, competition regimes are different by which institution (1) detects cartel behavior, (2) investigates potential violation of competition law, (3) prosecutes the suspected cartelists (companies and/or individuals), and (4) ultimately enforces decisions & imposes sanctions, etc.
In some jurisdictions, competition agency that investigates the case takes enforcement decisions. In other jurisdictions, decisions are left to the courts or administrative tribunals.
Reference: Case Resolution Chapter, ICN Cartel Working Group Anti Cartel Enforcement Manual (

5. Japan’s example
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 investigation and necessary procedures.
To show an example of how the hypothetical case is investigated and decided, I will explain Japan’s system.
Japan has both administrative and criminal procedures. In this sense, it adopts a hybrid of criminal and administrative system. However, based on the evidence available, the JFTC decides whether to seek the case as either criminal or administrative case. The JFTC published guidelines on seeking criminal accusation, and it focuses on only serious and vicious cases which have large impact on the national economy. As a result, most of the cases are sought as administrative cases. If the JFTC decides to seek the case as criminal, it files criminal accusation to the Prosecutor General. Only the JFTC has the right to accuse to the Prosecutor’s General.
When the JFTC decides to seek a case administratively, at the end of the investigation, the JFTC issues a cease and desist order and a surcharge payment order. The draft orders are sent to the respondents and opportunities to provide comments and evidence are given to them before the final orders are issued. Also the respondents can choose to claim on the decision and seek hearing procedure which is the administrative appeal and further to the court appeal.
“DOKKIN”
JFTC’s official character

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
Initial proceedings
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)
This is the image of the criminal and administrative procedures in Japan.
I also have put private enforcement, that is, civil procedure for claiming damages for your reference.
・ 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….
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.
As for the leniency, a total of 5 violators before and after the JFTC’s investigation will be permitted to file leniency applications and up to 3 applicants after the investigation start date. The first leniency applicant before the initiation of the JFTC’s investigation will be exempted from surcharges and the others are permitted 50% or 30% reduction of the surcharges.
So if the CropPro applies for a marker in Japan before the start of the JFTC’s investigation, it will be immune from surcharges.
“DOKKIN”
JFTC’s official character

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?
So, how the hypothetical 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?
(Note: Possible quick survey on participants about criminal, administrative/civil, and hybrid regimes, whether they have leniency programs, etc. to determine which statements we can focus on.)

9. Leniency programs of the jurisdictions where CropPro applies for a markerUS
Only the first applicant for leniency is not prosecuted and fined. EU
The first applicant before or after the inspection can get full immunity from fines.
Even if the applicant does not satisfy the conditions for full immunity, the first undertaking to provide significant added value to the Commission’s evidence can get % reduction of fines. The second undertaking can get % reduction and the subsequent undertakings can get a reduction of up to 20 %.
Canada
The first applicant for leniency before or after the inspection will get the recommendation of dropping the charges to the Attorney General.
To help you to see the differences among jurisdictions, these are the snapshots of the leniency programs and the procedures of the other jurisdictions that the CropPro applies for the marker for your reference. But, these may not be accurate and the participants from those jurisdictions may know better than us.

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
Initial proceedings
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)
In the US, cartels are basically sought as a criminal offence.
(Settlement)
・payment for damages
(treble damageｓ)
US Court of Appeals
Appeal
US Supreme Court

11. Administrative/Civil
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
Initial proceedings
Investigation
File for a damage claim
National Civil Court
Decision
・order
・ Fines
(Settlement)
Enforcement
& sanctions
In the EU, cartel offence is basically sought by administrative or civil procedure.
・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
Initial proceedings
Reference
Attorney General (Canada/Province)
Investigation
File for a damage claim
prosecution
Criminal Court (Federal/Superior court of province)
Federal Court
Enforcement
& sanctions
In Canada, also sought as criminal.
・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
We may focus on the difference across different procedures, or regimes in terms of investigative tools, role of the agency, etc.
-- What’s the difference of the investigative tools? (e.g. dawn raid, interrogation, document submission, etc. with or without search warrants)
--What is the role of competition agency? What are the relationship between competition agency and other institutions (e.g. prosecutor, police, court)
--Are there differences in the use of leniency instruments and the position of a leniency applicant?
--Are there differences in the burden of proof and use of evidence?
--Are there differences in possible sanctions? (e.g. monetary sanction, imprisonment, etc.)
--Is the settlement procedure available?
--Are there differences in the possibility of cooperation with other agencies? (formal and informal cooperation)

14. Statements for Discussion
(To be updated further)
A reliable leniency program is determining the success of an enforcement system
After sharing the differences and the similarities across different procedures, we can discuss the pros and cons on the following statements.

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 much for 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.