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Criminalisation of cartel conduct imminent

Home Insights Criminalisation of cartel conduct imminent

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Contributed by: Troy Pilkington and Bradley Aburn

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Published on: March 14, 2019


Competition Alert – March 2019

After a decade of gestation, cartel conduct looks set to become a criminal offence in New Zealand after the Cartel (Criminalisation of Cartels) Amendment Bill passed the Committee of the whole House stage yesterday and is set to have its third reading in the next sitting week (which commences on 19 March).

A Supplementary Order Paper (SOP) did, however, make some last minute changes to the Bill. 

Most notably, the Government has taken on board Russell McVeagh's submission that defendants who reasonably believed that any of the relevant exceptions to cartel conduct applied should not be criminally liable. This is significant as it extends the scope of the defence to defendants who reasonably believed that the vertical supply contracts exception or joint buying and promotion exception applied. However, the amendment has also made it clear that the defence will not apply "if the defendant's belief is based on ignorance, or mistake, of any matter of law".

The SOP also made a few procedural changes to the criminal regime including:

  • Requiring the Court to inform defendants who plead not guilty, that if they intend to rely on the defence mentioned above, they must inform the prosecution of their intention within 20 working days of their not guilty plea and provide sufficient details about how the defence applies;
  • Requiring the Solicitor-General to establish a prosecutors panel of those lawyers the Solicitor-General considers appropriate to prosecute cartels; and
  • Changing the nature of the criminal cartel offence from a "category 4 offence" to a "category 3 offence", with the effect being that proceedings may now be heard in either the District Court or the High Court, depending on the circumstances of the case.

The Cartel (Criminalisation of Cartels) Amendment Bill is set to have its third reading in the next sitting week. If passed, the Bill will come into force two years after it receives Royal Assent.

If you have any questions as to how this proposed law change may impact your business, please contact one of the authors below.  

This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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