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August 3, 2017

Australian court convicts NYK Line of criminal cartel conduct

Australia's federal court has convicted Japanese shipping line Nippon Yusen Kabushiki Kaisha (NYK Line) of operating as a cartel to import cars into the country, and imposed a fine of A$25m ($20m) on the company.

Australia's federal court has convicted Japanese shipping line Nippon Yusen Kabushiki Kaisha (NYK Line) of operating as a cartel to import cars into the country, and imposed a fine of A$25m ($20m) on the company.

The penalty is the second largest ever imposed under the Competition and Consumer Act 2010. The ruling is also the first successful prosecution under the Act's criminal cartel provisions.

The Commonwealth Director of Public Prosecutions accused NYK of striking deals with other carriers to ensure that they do not wrest each other’s business, following a probe by AAAC.

NYK had been operating in the cartel since 1997, and Australian law criminalised cartel conduct in 2009. The charges levelled against NYK relate to the import of cars between 2009 and 2012.

The cartel imported vehicles from locations in Asia, the US and Europe on behalf of major car manufacturers such as Nissan, Suzuki, Honda, Toyota and Mazda.

In his judgement, Australia federal court justice Michael Wigney said: “Cartel conduct of the sort engaged in by NYK warrants denunciation and condign punishment.

"The Australian community relies heavily on imported vehicles, so a longstanding cartel in relation to the transportation of those vehicles to Australia was of significant concern."

“It is ultimately detrimental to, or at least likely to be detrimental to, Australian businesses and consumers.”

Justice Wigney further added that the fine “incorporates a global discount of 50% for NYK’s early plea of guilty and past and future assistance and cooperation, together with the contrition inherent in the early plea and cooperation: meaning that but for the early plea and past and future cooperation, the fine would have been $50 million”.

NYK Line entered a guilty plea in the federal court and cooperated during the ACCC investigation on 18 July last year.

Welcoming the verdict, ACCC chairman Rod Sims said: “The Australian community relies heavily on imported vehicles, so a longstanding cartel in relation to the transportation of those vehicles to Australia was of significant concern.”

CDPP also levelled charges against another member of the cartel, Japan-based Kawasaki Kisen Kaisha (K-Line), in November.

ACCC is still investigating the other cartel members.

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