Tuesday 13th Nov, 2018

NYK convicted and fined $25 million

Image: Shutterstock
Image: Shutterstock

JAPANESE shipping company Nippon Yusen Kabushiki Kaisha has been convicted of criminal cartel conduct and fined $25million.

This is the second-highest fine imposed in the history of regulatory body, the Australian Competition and Consumer Commission.

The judgment was the first successful prosecution under the criminal cartel provisions of the Competition and Consumer Act 2010 (CCA).

The Commonwealth Director of Public Prosecutions charged NYK with giving effect to cartel provisions in an arrangement or understanding with other shipping lines relating to the transportation of motor vehicles to Australia between 2009 and 2012.

This followed an investigation by the ACCC.

According to an ACCC statement, the cartel operated from at least February 1997 and affected vehicles transported to Australia by NYK and other shipping lines from locations in Asia, the USA and Europe on behalf of major car manufacturers including Nissan, Suzuki, Honda, Toyota and Mazda.

ACCC chairman Rod Sims has welcomed the Federal Court decision.

“The Australian community relies heavily on imported vehicles, so a longstanding cartel in relation to the transportation of those vehicles to Australia was of significant concern,” Mr Sims said.

“The NYK fine is also the second largest ever imposed under the Competition and Consumer Act, and incorporated a significant discount for NYK’s plea and cooperation.”

Justice Wigney has been quoted as saying the fine “incorporates a global discount of 50% for NYK’s early plea of guilty and past and future assistance and cooperation, together with the contrition inherent in the early plea and cooperation: meaning that but for the early plea and past and future cooperation, the fine would have been $50 million”.

In this case, the maximum penalty was calculated on the basis of 10% of NYK’s annual turnover in connection with Australia, in the 12 months before the start of the offence.

“The sentence imposed on NYK by the Federal Court today sends a strong warning to the industry and the business community at large,” Mr Sims said.

“The CDPP and ACCC can and will criminally prosecute cartel conduct.  It also highlights that parties who engage early and cooperate with the authorities may be shown leniency.”

In his judgement Justice Wigney said “cartel conduct of the sort engaged in by NYK warrants denunciation and condign punishment” because “it is ultimately detrimental to, or at least likely to be detrimental to, Australian businesses and consumers”.

“The penalty imposed on NYK should send a powerful message to multinational corporations that conduct business in Australia that anti-competitive conduct will not be tolerated and will be dealt with harshly,” Justice Wigney stated.

NYK entered a guilty plea on July 18, last year and has cooperated throughout the investigation, according to the ACCC.

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