In two interesting notes yesterday and today (see: here and here) Bloomberg has reported that the Competition Bureau is seeking to overturn an earlier interim stay obtained by RBS in relation to a court order to produce records related to the Bureau’s ongoing LIBOR price-fixing investigation involving Deutsche Bank AG, HSBC, Citigroup Inc., ICAP Plc and RP Martin Holdings Ltd.
According to Bloomberg, the Bureau sought and obtained court orders for the compulsory production of documents (section 11 orders) requiring the firms being investigated to produce documents including lists of individuals responsible for making Yen LIBOR submissions and internal communications. Also according to Bloomberg, the Bureau has taken the position that its [section 11 orders] “may be the only tool available to the Commissioner to obtain evidence of an international cartel formed by foreign-based persons impacting the Canadian economy but where records are held in a foreign jurisdiction …”
One expert described in the Bloomberg reports also points to the Bureau’s position that it has the power to assert enforcement jurisdiction under the criminal provisions of the Competition Act where there are anti-competitive effects in Canada (Canada is an effects based jurisdiction, although the boundaries of many jurisdictional related issues remain unclear and untested).
Among such uncertainties, subsection 11(2) of the Competition Act allows a court to order Canadian corporations to produce affiliates’ records, regardless of whether an affiliate is located in Canada or not, where the court is satisfied that the affiliate possesses records relevant to the inquiry. The Bureau has also taken the position that it has jurisdiction in Canada for indirect sales into Canada – for example in the Bureau’s Leniency Program – FAQs:
“Indirect sales into Canada occur when a cartelized product is used as an input into an intermediate or final product manufactured abroad that is subsequently sold to a purchaser in Canada. In those circumstances where the applicant or the Bureau has evidence of indirect sales into Canada, the Bureau expects or may request, as applicable, that a leniency applicant provide information in its possession in order to assess the applicant’s potential liability for such sales. The Bureau will, where necessary, work with a leniency applicant to develop a feasible methodology to estimate the affected volume of commerce associated with its indirect sales into Canada. For the purpose of a fine recommendation, indirect sales into Canada will be treated in the same way as direct sales.
Where cartel members are penalized in another jurisdiction for the direct sales that led to the indirect sales into Canada, the Bureau may consider, on a case-by-case basis, whether the penalties imposed in the foreign jurisdiction are adequate to address the economic harm in Canada from the indirect sales.”
____________________
For more information about our regulatory law services contact: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
