On Friday, April 4, 2014, the Antitrust Division of the United States Department of Justice (DOJ) announced that Romano Pisciotti, an Italian national, was extradited from Germany for his alleged role in a marine hose bid-rigging conspiracy. It was reported that Mr. Pisciotti was returning to Italy from Nigeria and was arrested during a layover at Frankfurt Airport. This is the first successful extradition by the DOJ on antitrust charges.
While the DOJ has had the extradition process to pursue certain foreign nationals (or fugitives) for some time, the agency has not actively used the process in the past. This may be because it has not had to use extradition (as many foreign nationals decide it may be in their best interest to resolve the matter in the United States), but either way, the extradition of Mr. Pisciotti suggests that the DOJ is aggressively pursuing any means necessary to prosecute foreign nationals that have allegedly engaged in antitrust conspiracies.
Requirements for Extradition
Extradition is the formal surrender of a person by a country to another country for prosecution or sentencing. There are several requirements for extradition to or from the United States. First, the U.S. must have an extradition treaty with the affected country, i.e., the country in which the individual is located. If the United States has no extradition treaty with the country where the individual is located, extradition is generally not available. The U.S. has extradition treaties with most countries, although there are several notable exceptions, including Russia, China, and the United Arab Emirates.
Second, under the principle of “dual criminality,” the conduct must be criminal or punishable as a felony in both the country requesting extradition and the country to which the request is made. Thus, extradition to the U.S. for an alleged violation of the Sherman Act satisfies the dual criminality requirement only when the requested country also criminalizes such conduct as a felony.
Third, even if the requirement of dual criminality is satisfied, many countries do not require, or even prohibit, extradition of their own citizens. Thus, the viability of extradition depends on the specifics of the extradition treaty between the U.S. and the other country.
Extradition of Romano Pisciotti
Mr. Pisciotti is a former executive with Parker ITR Srl, an Italian manufacturer of flexible rubber hose used to transfer oil and petroleum products between tankers and storage facilities. Mr. Pisciotti and Parker ITR are alleged to have engaged in a cartel with at least four other companies and nine individuals to eliminate competition in the supply of marine hose (all of these companies and individuals have pleaded guilty). The DOJ has alleged that the cartel affected prices for hundreds of millions of dollars in sales of marine hose and related products sold worldwide. Mr. Pisciotti was charged with violating the Sherman Act for rigging bids, fixing prices, and allocating market shares for sales of marine hose sold in the U.S. and elsewhere.
Mr. Pisciotti was detained in Germany, reportedly during a stopover between Italy and Africa. Germany has an extradition treaty with the U.S. that relies on the principle of dual criminality. In Germany, bid-rigging is subject to criminal sanctions of up to five years imprisonment for individuals, thus satisfying the dual criminality requirements. In addition, Mr. Pisciotti, as an Italian national, could not avail himself of any protections afforded to German nationals in similar extradition circumstances.
Mr. Pisciotti made his initial appearance in the U.S. District Court for the Southern District of Florida on April 4, 2014. The DOJ asked that Mr. Pisciotti remain in custody pending his trial and the court agreed to detention to secure his presence at future proceedings. Meanwhile, in Europe, his legal counsel is challenging the extradition, claiming that Germany infringed his basic freedoms under EU law.
Implications of This Case
This case demonstrates that the U.S. will be aggressive in using extradition to pursue foreign nationals. This is true even when their presence in those jurisdictions is brief, as it was for Mr. Pisciotti. Indeed, the DOJ has recently stated that “[t]he [Antitrust] Division remains committed to ensuring that culpable foreign nationals, just like U.S. co-conspirators, serve prison sentences for violating the U.S. antitrust laws and to using all appropriate tools to find and arrest or extradite international fugitives.”
While extradition continues to require dual criminality and the number of jurisdictions that have criminalized antitrust violations remains relatively small, criminalization of the antitrust violations is increasing. We also believe it is just a matter of time before the DOJ pursues additional extraditions from countries that have dual criminality, such as the United Kingdom and Japan. It is therefore important for foreign nationals and their counsel to recognize the high risk of extradition while travelling to jurisdictions with dual criminality for antitrust violations.