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      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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D. Trends in Extradition and Leniency

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  1. Extradition of Individuals

(a) One of the important issues involved with any attempt to successfully prosecute non-US citizens is the ability to extradite such individuals. 

(b) In one case, DOJ has been attempting to extradite a British citizen on charges of being involved in a conspiracy to fix the prices of carbon products from 1989-2000.  This past year, the House of Lords blocked his extradition because price fixing was not a criminal offence in the United Kingdom.  The House of Lords remanded to case to the lower court for further proceedings on whether he maybe extradited on other charges.  A lower court then found that the individual could be extradited for obstruction of justice.  This decision is now being appealed. 

  1. Leniency and Amnesty

(a) In November, 2008, DOJ released new Model Conditional Leniency Letters ("Model Letters") for those seeking amnesty for antitrust violations and also issued "Frequently Asked Questions Regarding the Antitrust Division's Leniency Program" ("Leniency FAQ") which clarified a number of policy issues related to the amnesty program.  The noteworthy features of the Model Letters and the Leniency FAQ include:

(i) An extensive discussion of the marker system under which a potential applicant may hold its position in line for leniency until counsel gathers sufficient information to support the application.  In order to obtain a marker, the corporation must state, among other things, that it has uncovered some information or evidence suggesting it may have engaged in a criminal violation; 

(ii) To actually obtain a conditional leniency letter, an amnesty applicant must now admit to actually committing a criminal antitrust violation before receiving a conditional leniency letter.  Under the prior model leniency letter, a company could begin the process by only reporting "possible" violations.

(iii) The Model Corporation Conditional Leniency Letter now covers not only the antitrust activity but also any offense a corporation may have committed "in connection with" the anticompetitive activity.  But, the Model Corporation Conditional Leniency Letter only binds the Antitrust Division of the DOJ, not other prosecuting agencies which could prosecute for other offenses (although this has not yet happened). 

(iv) The DOJ will not require any waiver of attorney-client or work product privileges, but the DOJ notes that some companies have found that voluntary disclosure of any such documents may be in the "best interest of the corporation".   

(v) The leniency program generally has required an applicant to take "prompt and effective" action to terminate participation in the antitrust violation upon discovery of the violation.  The DOJ has clarified that the "the fact that top executives, board members, or owners participated in the conspiracy does not necessarily bar the corporation from eligibility for leniency."  The DOJ generally "considers the corporation to have discovered the illegal activity at the earliest date on which either the board of directors or counsel for the corporation (either inside or outside) was first informed of the conduct at issue."

(vi) The DOJ clarifies that in considering whether a corporation has taken "prompt and effective" steps to terminate participation, the DOJ will take into consideration many case specific factors but a "primary consideration" will be the steps taken by management in response to the discovery of the anticompetitive activity.  Thus, a company should not "use managers or executives who were in involved in the activity" to formulate the response or determine disciplinary action.  

(vii) The DOJ explains that the requirement to make restitution to injured parties (a) ceases if the DOJ's investigation reveals no criminal conduct; and (b) does not cease if the DOJ conditionally grants the leniency application or concludes that the applicant has not engaged in criminal activity but nonetheless closes the investigation without charging any other entity.  In the latter case, the company remains obligated to make restitution unless it withdraws its leniency application.

(viii) The DOJ explains that it will provide notice to counsel for a recipient of conditional leniency concerning any recommendation to revoke the applicant's conditional leniency and will provide counsel an opportunity to meet with the DOJ concerning any such revocation.

(ix) The Model Corporation Conditional Leniency Letter now has the applicant acknowledge and agree that it will not seek judicial review of any decision to revoke a conditional leniency unless and until the applicant has been charged.

(x)  If there is a substantial gap between the date of discovery of the illegal activity and the date the activity is reported to the Division, then DOJ reserves the right to grant conditional leniency only up to the date the applicant says that it terminated the activity. 

(xi) In accordance with F. Hoffman-La Roche Ltd. V. Empagran S.A., 542 U.S. 155 (2004), the Model Corporation Conditional Leniency Letter now states that the applicant is not required to pay restitution for injuries independent of any effects on US domestic commerce.

(b) The UK Office of Fair Trading also recently released a revised Leniency Guidance for businesses and individuals wishing to disclose information about their role in a cartel.  The OFT reports that the guidance is intended to give "maximum predictability and transparency" for leniency applicants and their advisers.

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