In a surprise announcement, Minister of Commerce and Consumer Affairs Paul Goldsmith has confirmed that criminal sanctions for cartel conduct will be dropped from the Commerce (Cartels and Other Matters) Amendment Bill (Cartels Bill), which has been making its way through the parliamentary process for over 4 years.
Before the Minister’s announcement, under the Cartels Bill individuals who engaged in cartel conduct could have faced up to 7 years in prison and/or a fine of up to NZ$500,000. Criminalising cartel conduct would have harmonised our cartel laws with many other countries including Australia, Canada, Japan, Korea, the UK & the US. The criminal sanctions would have accompanied the existing civil regime.
The Minister stated in his media release that “The criminalisation of cartels has remained an issue of major contention with the Bill. I have re-examined the case for criminalisation, and on balance I have recommended that the criminalisation provisions be removed […] In weighing up the benefits of criminalising cartel activity, the Government had to consider the significant risk that cartel criminalisation would have a chilling effect on pro-competitive behaviour between companies.”
The media release makes no mention of the proposed removal of the “shipping exemption” from the Commerce Act, which was generally understood to be a factor in the holdup of the passing of the Cartels Bill.
The Minister will be introducing a Supplementary Order Paper shortly to effect the changes.
The Minister’s media release is available here.