Government puts cartel criminalisation back on the table

Bell Gully | View firm profile

The Minister of Commerce and Consumer Affairs, Kris Faafoi, has today tabled the Commerce (Criminalisation of Cartels) Amendment Bill (the Bill) in the House.

The Bill reintroduces a proposal to criminalise cartel conduct that had been scrapped by the previous government. The Bill proposes a penalty of imprisonment for up to seven years for individuals that intentionally enter into or give effect to a cartel provision (which includes price fixing, restricting output, or market allocating). The Bill provides for a two-year transitional period before the criminal offence provisions would come into effect.

The government's rationale for criminalisation is to bring our regime into line with key trading partners such as Australia, the US and the UK (all of which have criminal regimes) and to promote deterrence and detection. While the US has had criminal sanctions in place for some time, Australia and the UK criminal regimes are comparatively recent and it is still too early to tell whether criminalisation has indeed had the desired effect.

The proposal is a surprising development following the abandonment of such an idea in 2015 by the then National Government where, following a strong majority of submissions opposing criminalisation, Paul Goldsmith (the Minister of Commerce and Consumer Affairs at the time) formed the view that the arguments in favour of criminalisation were outweighed by those against it. While a range of other major amendments to the Commerce Act were finally passed in August last year, criminalisation was not amongst them.

Bell Gully will continue to monitor the progress of the Bill through the House and if you would like to know more about the other changes to be made by the Bill, please contact your usual Bell Gully adviser.​

More from Bell Gully