On January 13, 2020, the Antitrust Division of the U.S. Department of Justice announced that a former senior vice president of cargo sales and marketing for Martinair N.V. (Martinair Cargo) and a Dutch national, had been extradited from Italy to the United States to face price-fixing charges. She was indicted in September 2010 in the U.S. District Court for the Northern District of Georgia in Atlanta for participating in a long-running worldwide conspiracy to fix prices of air cargo since at least as early as January 2001 until at least February 2006. Then, after being a fugitive for almost 10 years, the manager was apprehended by Italian authorities in July 2019 while visiting Sicily. She initially contested extradition in the Italian courts, but she waived her appeal when the Court of Appeals of Palermo ruled in favor of extradition. This is the second case of extradition of a foreign executive based solely on an antitrust charge. In early April 2014, an Italian former manager of Parker ITR Srl’s oil and gas business unit was extradited from Germany on a charge of violating the Sherman Act. He was sentenced to pay a $50,000 criminal fine and serve two years in prison with credit for the time he was held in the custody of the German government.
This new case could establish a precedent for Italian courts when called upon to decide on extradition from Italy to the U.S. for antitrust violations. The Court of Appeals of Palermo stated that the dual-criminality requirement had been met since the circumstances that led to the conspiracy indictment under U.S. law amounted to a case of associazione per delinquere (criminal association) aimed at committing truffa (fraud) and aggiotaggio (insider trading), sanctioned under Section 416 of the Italian Penal Code. Additionally, extradition was granted because the same conduct was punishable as a criminal offense in both countries, i.e., as conspiracy in the U.S. and as associazione per delinquere in Italy, regardless of the titles and sanctions.
Once back in the U.S., after an initial appearance before the U.S. District Court, the manager pleaded guilty to conspiring to suppress and eliminate competition by fixing and coordinating certain surcharges, including fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments. She was sentenced to 14 months in prison with credit for the time she was held in the custody of the Italian government pending her extradition. She was also sentenced to pay a $20,000 criminal fine. Assistant attorney general Makan Delrahim of the Antitrust Division stated, “Today’s guilty plea demonstrates the Antitrust Division’s commitment to bringing those who violate the antitrust laws—wherever located—to justice.”
This case could set a new standard, paving the way for new decisions in this regard. In particular, it draws focus to the previously theorized possibility that Italian authorities may not only grant extradition for an alleged violation of the Sherman Act on the basis of specific criminal offenses punished under Italian law (such as criminal association, fraud, and insider trading), but may also indict people, including Italian nationals, for the same criminal offenses when they voluntarily enter into cartel agreements with competitors, even in cases where Italian antitrust law provides only administrative sanctions. The novel, wide-ranging interpretation of such criminal offenses offered by the Court of Appeals of Palermo is such that virtually any cartel offense might fall under the definition of criminal association aimed at committing fraud or conducting insider trading.
However, since such criminal provisions had never been applied to cartels before and antitrust infringements are by definition expressly sanctioned only as administrative offenses under Italian law, this ruling will certainly generate extensive legal debate. In any case, it is bound to impact compliance advice across the EU considerably as it inevitably changes the risk perspective for businesses and their executives entering into cartel agreements.
