Trends In International Litigation : International Business Lawyer & Attorney : Ed Joffe : Joffe & Joffe Law Firm : Miami, Florida Global Customs & Trade Issues

 An Italian subsidiary of  Parker  has agreed to plead guilty and to pay a $2.29 million criminal fine for participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose sold in the United States and elsewhere, the Department of Justice announced today.

A one-count felony charge was filed today in U.S. District Court in Houston, against Parker ITR S.r.l., a manufacturer of marine hose, headquartered in Veniano, Italy. Under the terms of the plea agreement, which is subject to court approval, Parker ITR has agreed to pay a criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation. Parker ITR is the fourth company to be charged in the investigation. To date, nine individuals have been convicted for their involvement in the marine hose conspiracy.

Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. The victims of this conspiracy included companies involved in the off-shore extraction and/or transportation of petroleum products, as well as the U.S. Department of Defense. During the conspiracy, the cartel affected prices for hundreds of millions of dollars worth of marine hose and related products sold worldwide.

Parker ITR is charged with participating in the conspiracy from as early as 1999 until as late as May 2, 2007. According to the charge, Parker ITR and its co-conspirators agreed to allocate shares of the marine hose market and to use a price list for marine hose in order to implement the conspiracy. Parker ITR and its co-conspirators agreed not to compete for one another’s customers either by not submitting prices or bids, or by submitting intentionally high prices or bids, to certain customers. As part of the conspiracy, Parker ITR and its co-conspirators provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to a co-conspirator who served as the coordinator of the conspiracy. Parker ITR received marine hose prices for customers in the United States and elsewhere from the coordinator of the conspiracy and then sold the marine hose to those customers at collusive and noncompetitive prices and then concealed the conspiracy through various means, including code names, private email accounts and telephone numbers.

Parker ITR is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is an example of the department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.

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Will Waters of International Freighting Weekly ( IFW) has reported that twenty freight forwarding companies and national forwarding association Fedespedi are being investigated by Italy’s competition commission over allegations of colluding on road freight pricing.They are accused of exchanging sensitive information "and co-ordination of business strategies" from at least the end of 2002 until September 2007.

The commission alleged that illicit agreements had taken place place during "numerous and regular encounters" at Fedespedi - in particular its overland shippers section - covering road freight services to and from Italy.It claimed the aim had been to "agree the realisation of price increases for services rendered to customers", particularly over fuel surcharges, road tolls and administrative costs.

The companies standing accused are: Agility, Albinos & Pitigliani, Brigl, Cargo North, DHL, Ferrari, Francisco Parisi, Gefco, Geodis, I-Dika, Italmondo, Italsempione, ITK, ITX Cargo, Rhenus, Saima, Schenker, Sittam, Transervice and Villanova.

Fedespedi told IFW it was "intensively co-operating with the authority" in order to clarify whether any of the actions or agreements by the association or any of its members were liable to punishment.DHL confirmed that the competition authority had opened investigations into two of its offices in Milan, and said it was also co-operating fully with the investigating authorities.
DB Schenker said it was giving its full support to the authorities "in order to clarify the matter as soon as possible", adding: "Such investigations do not mean that the companies are guilty of anti-competitive behavior; nor do they prejudge the outcome of the investigation itself."
 

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Purchasers of marine products may have claims have antitrust violations. Earlier this year two subsidiaries of the Swedish company Trelleborg AB, one based in Virginia and the other in France, agreed to plead guilty and pay a total of $11 million in criminal fines for their participation in separate conspiracies affecting the sales of marine products sold in the United States and elsewhere.
A two-count felony charge was filed in U.S. District Court in Norfolk, Va., against Virginia Harbor Services Inc., formerly known as Trelleborg Engineered Products Inc. (VHS/TEPI), a manufacturer of foam-filled marine fenders, buoys and plastic marine pilings headquartered in Clearbrook, Va.
According to the charges, VHS/TEPI participated in a conspiracy between December 2002 and August 2005 to allocate customers and rig bids for contracts to sell foam-filled marine fenders and buoys, and also participated in a separate conspiracy between December 2002 and May 2003 to allocate customers and rig bids for contracts to sell plastic marine pilings. Under the terms of the plea agreement, which is subject to court approval, VHS/TEPI has agreed to pay a $7.5 million criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation.

Foam-filled marine fenders are used as a cushion between ships and either fixed structures, such as docks or piers, or floating structures, such as other ships. Foam-filled buoys are used in a variety of applications, including as channel markers and navigational aids. Plastic marine pilings are substitutes for traditional wood timber pilings and are often used in port and pier construction projects in conjunction with foam-filled fenders.
 

In addition, a one-count felony charge was filed earlier this year against Trelleborg Industrie S.A.S. (TISAS), a manufacturer of marine hose headquartered in Clermont-Ferrand, France. TISAS is charged with participating in a conspiracy from at least as early as 1999 and continuing until as late as May 2, 2007, to allocate market shares, fix prices and rig bids for contracts to sell marine hose to purchasers in the United States and elsewhere. Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. Under the terms of the plea agreement, TISAS agreed to pay a $3.5 million criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation.
“Price fixing and bid rigging are serious crimes that drain resources from the Department of Defense and the American taxpayer. The Defense Criminal Investigative Service takes very seriously all violations of U.S. antitrust laws that affect products and services procured for our soldiers, sailors, airmen and Marines. DCIS aggressively investigates those who seek to cheat the DOD and the public by conspiring to suppress competition,” said Sharon Woods, Director, DCIS. 
 

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