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Clifford Chance

Regulatory Investigations and Financial Crime Insights

Australian antitrust regulator joins forces with the FBI to combat anti-competitive behaviour globally

In a new Memorandum of Cooperation (MOC), the Australian Competition and Consumer Commission (ACCC) and the United States Federal Bureau of Investigations (FBI) have agreed to several impactful measures aimed at deepening investigative cooperation.

The cooperation measures between the ACCC and the FBI will include exchanging expertise and staff to facilitate the common goal of detecting, investigating and prosecuting cartel offences in the US and Australia, according to the ACCC media release dated 15 April 2019 (the MOC itself has not been publicly released at the date of this post).

The MOC will put a formal framework around the pre-existing relationship between the two agencies.  It will also likely complement and build upon existing antitrust related intergovernmental treaties agreed between the US and Australia in 1982 and 1999, and will go some way to addressing at a practical level concerns expressed by Section Chief J.J. Jimenez of the FBI’s Criminal Investigative Division that those treaties do not deliver the "vigorous investigative cooperation" which he considers "vital" to detecting and preventing antitrust behaviour.

By deepening its relationship with the FBI, the ACCC may be seeking to develop its investigation skill set, including by drawing upon the FBI's experience and investigative techniques, with a view potentially to reducing its heavy reliance on immunity deals to uncover and prosecute cartel conduct.  Since 2009 (when cartel conduct was criminalised in Australia), most prosecutions have relied on evidence given by witnesses in return for immunity, rather than evidence collected organically by the ACCC.

In the US, the FBI uses covert measures such as informants, wiretaps, consensual monitoring, and undercover agents to investigate suspected cartel participants.  In the 1990's, the FBI covertly gathered evidence of price fixing in the lysine industry in what was later dubbed the "best documented corporate crime in American history".  That prosecution ended with three executives sentenced to 30-months or more imprisonment, and six entities (including four foreign corporations) fined over USD100 million.  The FBI has helped the Antitrust Division of the US Department of Justice obtain jurisdiction over, and prosecute, foreign nationals.  Since the first foreign antitrust defendant served time in a US prison in 1999, almost one hundred foreign defendants have served time in US prisons for participating in, or for obstructing investigations of, international antitrust cartels.

The MOC will likely provide for much greater assistance between the two agencies and bolster the international agency-level cooperation in relation to cartel offences.  It is also expected that other Australian regulatory bodies (such as ASIC, APRA and AUSTRAC) will seek to reach (or to refresh existing) agency-level agreements with key international partners in the wake of Australia's Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, and the implementation of recommendations from ASIC's Enforcement Review Taskforce.  In this connection, ASIC earlier this month announced two additional agency-level agreements with the UK's Financial Conduct Authority covering trade repositories and alternative investment funds.