OFT brings criminal charges in international bid rigging, price fixing and market allocation cartel

OFFICE OF FAIR TRADING News Release (177/07) issued by The Government News Network on 19 December 2007

Three UK businessmen were charged last night with cartel offences under the Enterprise Act. This is the first time that charges have been brought for the cartel offence which came into force in 2003.

The businessmen have been charged with dishonestly participating in a cartel to allocate markets and customers, restrict supplies, fix prices and rig bids for the supply of marine hose and ancillary equipment in the UK. The charges relate to the period from 20 June 2003 when the cartel offence came into force, to 2 May 2007.

Today's announcement follows an eleven month investigation by the OFT, one of a number of investigations being carried out by competition authorities around the world, including the European Commission and the United States Department of Justice.

The businessmen together with five nationals from other countries, were arrested by the United States authorities in May this year for suspected breaches of US anti-trust law. The arrests took place in Houston, Texas where they were attending an industry conference, and were timed to coincide with searches carried out by the OFT at locations in the UK, as well as on-site inspections by the European Commission.

The businessmen were allowed to return to the UK and face charges as part of plea bargain agreements with the US Department of Justice. They were arrested by the Metropolitan Police on their arrival at Heathrow airport yesterday morning and were interviewed by OFT officials before being charged. They have been released on bail to appear before a magistrates court in the New Year.

Marine hose is used by the oil and defence industries for transporting oil between tankers and storage facilities.

The businessmen charged are:

- Bryan Allison of Cleethorpes, Lincolnshire, who at the time of the arrest was Managing Director of Dunlop Oil and Marine Limited

- David Brammar of Humberston, Lincolnshire, who at the time of the arrest was Sales and Marketing Director of Dunlop Oil and Marine Limited

- Peter Owen Whittle of Louth, Lincolnshire, who at the time of the arrest was an independent consultant and director of PW Consulting International Limited and of PW Consulting (Oil and Marine) Limited.

Simon Williams, OFT Director of Cartels said:

'These charges follow an OFT investigation that has been closely co-ordinated with other overseas agencies. Although no presumption should be made as to the guilt of the businessmen arrested and charged today, this illustrates our willingness to use our criminal powers to investigate suspected domestic and international cartel activity.'

OFT Chairman, Philip Collins, added:

'These charges are a highly significant development in both the UK's own competition regime and in international co-operation against cartels. They demonstrate the OFT's determination to act decisively and innovatively when investigating suspected cartel activity, and in appropriate cases, to bring charges before the UK criminal courts. Our willingness in this respect should send a clear message to business, that the OFT takes its enforcement responsibilities seriously'

NOTES

1. The charges have been brought under the Enterprise Act 2002. Under section 188 of the Act it is an offence for individuals dishonestly to agree that businesses will engage in certain types of cartel activity, namely price-fixing, limiting supply or production, market-sharing and bid-rigging.

2. The OFT carried out on-site searches at two addresses in the UK in May 2007 (see OFT Press release 70/07) and has since carried out a number of interviews, including with the three UK defendants.

3. The UK defendants have not been extradited, but are returning to the UK voluntarily having been released by the US authorities pursuant to a plea agreement voluntarily entered into with the US Department of Justice.

4. Under the terms of the US plea agreement, the Defendants have pleaded guilty to violations of US antitrust law. The US plea agreement applies only to the proceedings in the US and does not affect the rights of the defendants under UK law. In particular, they are entitled to the normal presumption of innocence until proven guilty and will be free to decide whether they wish to plead guilty to the UK offence or not. All three defendants have had the benefit of independent advice by US and UK lawyers.

5. A separate investigation is being carried out by the European Commission under Article 81 of the EC Treaty, which is directed at the companies concerned. Article 81 prohibits anti-competitive agreements between undertakings.

6. Individuals convicted of the cartel offence under the Enterprise Act may be sentenced to up to five years' imprisonment and/ or an unlimited fine. Companies found to have infringed Article 81 of the EC Treaty may be fined up to ten per cent of their annual world wide turnover.

7. Anyone with information concerning bid rigging or other cartel conduct is encouraged to contact the OFT's Director of Cartel Investigations. The OFT operates a leniency programme for companies and other individuals who wish to confess to cartel conduct. For further information please see http://www.oft.gov.uk/advice_and_resources/resource_base/cartels/confess

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