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Inventory of Domestic Laws and Regulations Relating to
Competition Policy in the Western Hemisphere

Submitted by the OAS Trade Unit to the FTAA Working Group on Competition Policies


XII. Administrative or Judicial Sanctions

Argentina

When a commitment were not presented in the manner foreseen in article 24, the proposal is rejected or the commitment were not observed, the Secretary of State for Commerce and International Economic Negotiations after adopting the measures deemed necessary to better provide for that situation, via a grounded resolution may decide: a) Not to introduce any changes into the existing situation; b) To order the accused behavior to be discontinued or abstained; c) To impose a fine from five hundred thousand pesos ($ 500.000) to 1.5 billion pesos, which may be increased up to a twenty percent (20%) above the profit unlawfully obtained; d) To request the dissolution or liquidation of the company from the National Judge for Criminal and Economic matters of the Capital Federal or from the Federal Judges from the interior of the country, according to the domicile of the company. (Article 26).

Acts or behaviors comprised in article 41 will be punished with the following penalties, which may be enforced jointly or separately.

1. When the event has been carried out by physical persons: a) Prison from one (1) to six (6) years; b) Fine of one million five hundred thousand pesos up to three billion ($3,000,000,000) pesos, which may be increased up to twice as much the profit unlawfully obtained.
2. When the event was committed by directors, legal representatives, agents, managers, trustees, or members of the supervisory Commission of persons of an ideal existence, with the means or resources made available by that person or obtained from that person for that purpose, in such a manner that the event is commited on behalf of, with the help of or for the benefit of the ideal person, the following will be imposed: a) A fine of one million five hundred thousand pesos ($1,500,000) to three billion pesos ($3,000,000,000) which may be raised to twice as much the profit unlawfully obtained, which will become solidary effective over the assets of the ideal person and over the private assets of directors, legal representatives, agents, managers, trustees or members of the Supervisory Council involved in the Commission of the punishable event; b) Prison from one (1) to six (6) years, will be applied to directors, legal representatives, agents, managers, trustees or members of the Supervisory Council involved in the Commission of the punishable crime.
A complementary penalty that may be imposed is a three (3) to ten (10) year disqualification to trade, which will be extended to directors, legal representatives, agents, managers, trustees or members of the supervisory council involved in the Commission of the crime, disqualifying them too, to act in the mentioned positions or functions for the same term.
In cases of fine penalties, the applied one will have to be calculated in accordance with article 26, paragraph c). (Article 42).

Bolivia


Brazil

In Brazilian legislation the sanctions for infraction of the economic order are monetary, and also imply obligations to act or to refrain from acting.

Among the penalties imposed by Law No. 8,884/94 is the fine imposed on companies and on managers.

Without prejudice to pecuniary sanction, the following penalties may also be imposed, alone or cumulatively:
- publication in the press of a synopsis of the decision imposing liability;
- prohibition on contracting with public organs for five years;
- non-concession of the dividing up taxes;
- canceling tax incentives or public subsidies;
- granting of obligatory license for patents owned by the infractor;
- break-up of the company, sale of assets, partial cessation of activities, or transfer of corporate control;
- entry of the infractor in the National Register for Consumer Defense.
Whether imposing a fine or an obligation to act, the decision of the plenary of the CADE constitutes prima facie evidence; implementation of the respective decision of the plenary can be compelled by judicial action.
Where the sole purpose of execution is to charge a monetary fine, execution will be in the terms of Law 6,830 of September 22, 1980, which governs the judicial collection of debts outstanding to the public treasury.
Where implementation has as its purpose fulfillment of an obligation to act or refrain from acting, the judge will grant a specific order to ensure the obligation is executed or will determine the measures to be adopted for the payment of the obligation, and may also, where it is impossible to obtain the practical results sought, substitute compensation for the judicial judgment to act or not act, without prejudice to the fine applied.
Judicial execution of the decision of the CADE may go as far as intervention in the company, based on a judicial decree, in cases in which such a measure is necessary to make possible specific execution.
The criminal sanction, for imposing a monetary fine and detention, is limited to the scope of application of the Attorney General's Office in the cases under the criminal laws and to the Code of Criminal Procedure.

Canada

Alternative case resolution instruments (administrative sanctions).
In dealing with possible contraventions to the Act, the Director may file an application with the Competition Tribunal (non-criminal reviewable matters) or refer a case to the Attorney General who may prosecute before the courts (criminal matters). However, the Director may also respond to certain anti-competitive activities through administrative action which applies one of the alternative case resolution instruments available to him. Indeed, it has been the Director=s general policy over the last few years to make greater use of alternative case resolution instruments wherever appropriate as some matters may be resolved quickly and easily without a full inquiry or judicial proceedings. As discussed above, this is part of a more compliance-oriented approach adopted by the Director.
Examples of alternative case resolution instruments include:
- investigative visits: at any stage of an inquiry the Director may contact a person alleged to be involved in anticompetitive conduct in order to obtain information. If the information obtained indicates that further inquiry is not justified, the Director will discontinue the inquiry.
- undertakings: the Director may, in certain circumstances, accept written undertakings which obviate the need to make an application to the Competition Tribunal or refer a matter to the Attorney General.
- in respect of mergers, the Director may suggest a restructuring of the transaction (before closing) which would alleviate his competition concerns.

Colombia

The Superintendent may order violators to modify or cease any behavior violating the provisions on promotion of competition and on restrictive business practices and may impose fines of up to 2,000 times the current monthly minimum wage and up to 300 times the current monthly minimum wage upon board members, directors, legal representatives and financial auditors who authorize, engage in or tolerate such conduct. In order to impose sanctions upon violators and issue injunctions, the Superintendent must obtain a priori opinion from the Advisory Council for matters related to the promotion of competition. (Article 24 of Decree 2153/92).

Impose pecuniary sanctions of up to the equivalent of two thousand (2,000) minimum legal monthly wages effective when imposing the sanction for violation of the standards on the promotion of competition and restrictive business practices which are the subject matter of this decree.
Impose fines upon managers, directors, legal representatives, auditors, fiscal supervisors and other natural persons authorizing, executing or tolerating infringement behaviors of the standards on the promotion of competition and restrictive business practices this decree refers to, of up to three hundred (300) minimum legal monthly wages effective at the time the sanction is imposed. (Article 4 of Decree 2153/92).

Costa Rica

Article 25 of the Law for Promotion of Competition empowers the Commission to impose monetary and corrective penalties, on the basis of a written finding taking into account the financial capacity of the violator of the provisions of Chapter III:
a) suspension, correction, or elimination of the practice or concentration concerned;
b) total or partial breakup of any illegal arrangements, without prejudice to payment of the corresponding fine;
c) payment of a fine of up to 65 times the value of the minimum monthly wage for having given false testimony or false information to the Commission, aside from other penalties that may be incurred;
d) payment of a fine of up to 50 times the minimum monthly wage for failing to submit information requested by the Commission in a timely manner;
e) payment of a fine of up to 680 times the minimum monthly wage for engaging in a total monopolistic practice;
f) payment of a fine of up to 410 times the minimum monthly wage for having engaged in a partial monopolistic practice;
g) payment of a fine of up to 75 times the minimum monthly wage for persons who were directly involved in the prohibited monopolistic practices or concentration, acting on behalf of the companies or entities and on their account and direction.

If any of the infractions listed in the last three points are particularly serious, the Commission may impose a fine of 10 percent of the annual sales of the violator during the previous fiscal year, or 10 percent of the violator's assets, whichever is greater. In applying penalties, the Commission shall respect the principles of due process, informal hearings, disclosure, impartiality, and publicity. In the case of fines, the Commission shall take into account the following factors: a) the severity of the infraction; b) the threat or damage caused; c) indications of intent; d) the violator's share of the market; e) the size of the market affected; f) the duration of the practice; g) recurrence of the offense; and h) the violator's ability to pay. If the violator refuses to pay the fine established by the Commission, the amount owing shall be certified as a legally enforceable claim which may be submitted for judicial enforcement proceedings pursuant to the Code of Civil Procedures (Article 25).

The minimum monthly wage is that rate of remuneration established as such by decree of the Executive Power, on the recommendation of the National Wages and Salaries Council of the Ministry of Labor and Social Security, or by the competent authority. (Article 2).

Failure to provide information, and provision of false, imprecise, or incomplete information in the documents required from the economic agents shall be punished by the Commission as a serious offense. If such failure arises with respect to a request issued by the Ministry of Economy, Industry and Trade, the Ministry shall submit those documents to the Commission for appropriate action, where the subject matter relates to the Commission=s area of authority, i.e. information requested concerning the committing of any of the conducts specified in Chapter III of the Law. In this case, the formal certification submitted by the respective office shall serve as the formal complaint. (Article 64)

Although the Law does not specify any form of conduct as a serious offense, in practice the provisions of paragraphs c) and d) of Article 25 of the Law are applied. The procedure to be followed by the Commission is that established in Article 64 of the Regulations, This Article provides that those cases shall be dealt with by summary administrative procedure, as established in the LGAP [the General Law on Public Administration], whereby the certification referred to is accepted and a hearing is held directly, pursuant to Article 324 of the LGAP. If the Commission deems the violation to be proven, the final decision must order the violator to comply with the original requirement, within time limit to be stated, which in any case shall not be less than eight days. If the violator fails to comply, the provisions of Article 65 of the Law shall apply.

Criminal penalties
Failure to observe or comply with decisions or orders issued by the Commission in its areas of competence, within the time limits determined by it, shall be deemed a criminal offense under Article 305 of the Criminal Code, which provides as follows:
Disobedience. Whoever disobeys an order issued by a public official in the exercise of his duties shall be liable to imprisonment of from fifteen days to one year

In such cases, the Commission shall proceed to take evidence in order to support an appropriate complaint to the Public Prosecutor. (Article 65 of the Law).

Chile

The Resolutory Commission is the only antitrust organ in Chile with authority to impose sanctions and measures. The Law provides the following civil and administrative measures: 1. to nullify any act, contract, system, agreement, or accord that it considers detrimental to free competition; 2. to cancel the license of any corporation or order the dissolution of any legally constituted association; 3. to exclude persons involved in these cases from holding any labor or professional office for a term of from one to five years; 4. to impose fines up to 10,000 Tax Units (about US$540,000); 5. to order criminal proceedings so that the regular courts can investigate and punish attempts to restrict free trade. (Article 17).

The regular courts shall apply short prison terms of any length (61 days to five years), cumulative if the case involves essential articles or services, such as food, clothing, housing, medicine, or health. (Article 1).

Dominican Republic

1. Prison terms of 15 days to three months, and a fine of from 10 to 100 pesos; 2. Sentences of one month to two years in a correctional prison and fines of 25 to 500 pesos; 3. When the fraud involves subsistence and other articles of basic necessity, the indicated penalties are doubled. (Criminal Code).

Correctional prison of six days to two years, and/or a fine of 25 to 10,000 pesos; 2. confiscation of articles in the case of hoarding, adulteration, false weights and measures, or tying. (Law No. 13).

Guatemala

There are no administrative penalties. Judicial sanctions range from issuing cease-and-desist orders, in civil cases, to imposing fines, varying between two hundred and ten thousand quetzales (US$ 33.00 to US$ 1,626.50) or imprisonment, from six months to five years, in criminal cases.

Jamaica

Judicial Sanctions:
Any person who, in any manner, impedes, prevents or obstructs any investigation by the Commission under this Act or any authorized officer in the execution of his duties under this Act is guilty of an offence and liable on convic-tion in a Circuit Court to a fine or to imprisonment for a term not exceeding five years or to both such fine and im-prisonment. (Section 42).

Every person who of records: (a) refuses to produce any document, record or thing, or to supply any information, when required to do so by the Commission under this Act; or (b) destroys or alters or causes to be destroyed or al-tered, any document, record or thing required to be so produced or in respect of which a warrant is issued under this Act, is guilty of an offence and liable on conviction in a Circuit Court to a fine or to imprisonment for a term not exceed-ing five years or to both such fine and imprisonment. (Section 43).

Any person who gives to the Commission or an authorized officer any information which he knows to be false or misleading is guilty of an offence and liable on con-viction in a Circuit Court to a fine or to imprisonment for term not exceeding five years or to both such fine and imprisonment. (Section 44).

Any person who: (a) refuses or fails to comply with a requirement of the Commission under this Act; (b) having been required to appear before the Commission: (i) without reasonable excuse refuses or fails so to appear and give evidence; (ii) refuses to take an oath or make an affirmation as a witness; (iii) refuses to answer any question put to him, is guilty of an offence and liable on conviction before a Resident Magistrate to a fine not exceeding twenty thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment. (Section 45).

(1) Pursuant to section 46 the Court may: (a) order the offending person to pay to the Crown such pecuniary penalty not exceeding 1 million dollars in the case of an individual and not exceed-ing 5 million dollars in the case of a person other than an individual; (b) grant an injunction restraining the offending person from engaging in conduct described in para-graph (a) or (b) of section 45, in respect of each contravention or failure referred to in section 45.

(2) In exercising its powers under this section the Court shall have regard to: (a) the nature and extent of the default; (b) the nature and extent of any loss suffered by any person as a result of the default; (c) the circumstances of the default; (d) any previous [determination] against the offending person.
(3) The standard of proof in proceedings under this section and section 47 shall be the standard of proof applicable in civil proceedings. (Section 47).

(1) Every person who engages in conduct which constitutes: (a) a contravention of any of the obligations or pro-hibitions imposed in Parts III, IV, VI or VII; (b) aiding, abetting, counseling or procuring the con-travention of any such provision; (c) inducing by threats, promises or otherwise the con-travention of any such provision; (d) being knowingly conceived in or party to any such contravention; or (e) conspiring with any other person to contravene any such provision, is liable in damages for any loss caused to any other person by such conduct.
(2) An action under subsection (1) may be com-menced at any time within three years from the time when the cause of action arose. (Section 48).

Mexico

Administrative Sanctions:
Infractions shall be penalized in the following manner: 1. Absolute monopolistic practices, a fine of twenty-five thousand balboas (B/.25,000.00) to one hundred thousand balboas (B/.100,000.00); 2. Prohibited relative monopolistic practices, a fine of five thousand balboas (B/.5,000.00) to fifty thousand balboas (B/.50,000.00); 3. Trade practices in violation of consumer protection provisions, a fine of one hundred balboas (B/.100.00) to ten thousand balboas (B/.10,000.00); 4. Violations for which no specific penalty has been established, a fine of fifty balboas (B/.50.00) to five thousand balboas (B/.5,000.00). To determine the amount of the fine to be imposed in each case, the seriousness of the offense, the size of the enterprise, whether the offense is a repeat offense and other such factors shall be taken into account. Penalties for monopolistic practices shall be imposed only when, in a final decision, it has been established that the corresponding provisions have been violated. The proceeds of these fines shall be deposited in the National Treasury. (Article 112).

Judicial Sanctions:
Those economic agents that demonstrates during the Commission's proceedings that they have suffered damage or loss attributable to the anticompetitive practice or unlawful concentration may bring a judicial action against the violator, and may obtain compensation of up to double the amount of such damage or loss. To this end, the courts may accept the assessment of damages made by the Commission.
Except as specified herein, no judicial or administrative action may be initiated based on this Act. (Article 38).

Panama

Administrative Sanctions:
Infractions shall be penalized in the following manner:
1. Absolute monopolistic practices, a fine of twenty-five thousand balboas (B/.25,000.00) to one hundred thousand balboas (B/.100,000.00);
2. Prohibited relative monopolistic practices, a fine of five thousand balboas (B/.5,000.00) to fifty thousand balboas (B/.50,000.00);
3. Trade practices in violation of consumer protection provisions, a fine of one hundred balboas (B/.100.00) to ten thousand balboas (B/.10,000.00);
4. Violations for which no specific penalty has been established, a fine of fifty balboas (B/.50.00) to five thousand balboas (B/.5,000.00).

To determine the amount of the fine to be imposed in each case, the seriousness of the offense, the size of the enterprise, whether the offense is a repeat offense and other such factors shall be taken into account.
Penalties for monopolistic practices shall be imposed only when, in a final decision, it has been established that the corresponding provisions have been violated. The proceeds of these fines shall be deposited in the National Treasury. (Article 112).

Judicial Sanctions:
In all cases in which prohibitions have been violated, the courts, through civil actions filed by the injured party, shall, for the benefit of the latter or those concerned, impose a penalty on the economic agent equal to three (3) times the amount of the damages caused as a result of the illicit act, in addition to any costs incurred.

However, the court that hears the case may limit the amount of the penalty to the amount of damages caused, or reduce it to two times the amount of such damages, in both cases ordering the payment of costs when it can be shown that the economic agent so penalized did not act in bad faith or with the intent to cause harm. (Article 27).

Peru

The Commission on Free Competition may impose the following fines on violators of this law: a) if the violation is determined to be light or serious, a fine of up to one thousand (1000) UITs, provided it does not exceed 10 percent of the gross sales or income of the violator in the period immediately preceding the Commission's decision; b) if the violation is determined to be very serious, a fine greater than 1,000 UITs, provided it does not exceed 10 percent of the gross sales or income of the violator in the period immediately preceding the Commission's decision.
If the entity or person being punished does not engage in economic, industrial, or commercial activity, or has begun it since January 1 of the preceding year, the fine shall in no case exceed 1,000 UITs. In addition to the penalty that the Commission may decide to apply to a firm or entity in violation, each of its legal representatives or directors may be fined up to one hundred (100) UITs to the extend they are found liable for the violations committed.
In defining the degree of severity of the violation and corresponding fine, the Commission shall use the following criteria: a) the nature and effect of the anticompetitive practice; b) the size of the market involved; c) the market share of the firm; d) the effect of the anticompetitive practice on current and potential competitors, other parties in the economic process, and users and consumers; e) the duration of the restraint on trade; f) recurrence of the prohibited behavior. (Article 23).

United States

Criminal penalties: criminal violations of the Sherman Act are punishable by fines of up to $10 million for corporate defendants and $350,000 for other defendants. Fines may also be set at double the gross amount gained from violation of the law or lost by the victim. Criminal violations of the Sherman Act are also punishable by up to three years' imprisonment.
Injunctive relief: federal courts have the power to order a party to do or refrain from doing a particular act, which can include prohibiting repetition of past violations. Such orders may be entered either after a contested proceeding or by consent of the parties. The DOJ can obtain injunctive relief only through the courts; the FTC can issue cease and desist orders, following either the respondent's consent to the FTC's finding of facts or after an administrative trial on the merits, enforceable by court-imposed civil penalties.
Damages: the private cause of action for violations of the antitrust laws is a critical component of the U.S. antitrust system, and is independent of any government action. If a private suit follows a government action under the Sherman or Clayton Acts in which the defendant has been found liable, however, the plaintiff may use the earlier judgment as prima facie evidence of a violation. Private parties can obtain injunctive relief and are generally entitled to treble damage relief for violations of the antitrust laws, as well as recovery of reasonable attorney's fees. The U.S. Government can also sue for treble damages to recover for injury to its business or property resulting from an antitrust violation.
Other relief: courts can order the restoration of competitive conditions, including divestiture of assets and rescission of contracts. Courts have broad power to order injunctive relief barring prospective or ongoing violations of the antitrust laws. Specific financial penalties, imposed by the courts, exist for failure to comply with premerger notification rules. The FTC has broad discretion in fashioning remedial cease and desist orders, enforceable by court imposed civil penalties for noncompliance. Remedies available under the state antitrust laws vary, but are generally similar to federal antitrust law provisions; in addition, many states provide for criminal penalties for violations of their antitrust laws.

Venezuela

The administrative penalties referred to under this Title shall be imposed by the Superintendency in the final decision that terminates the proceeding. (Article 43).

The penalties provided for in this Title shall be applied without prejudice to the penalties established in other laws. (Article 44).

The authors, co-authors, accomplices, and instigators of acts in violation of this Law shall be responsible personally for the infractions they committed. (Article 45).

Persons involved in the prohibited practices and conduct indicated in Sections I, II, and III of Chapter II of Title II of this Law, may be punished by the Superintendency with a fine of up to ten percent (10%) of the value of the violator=s sales, this quantity can be raised up to twenty percent (20%). In case of repeat offenders, the fine will be raised to forty percent (40%). The relevant sales figures to be used in this calculation will be based on data obtained before the resolution of the fine. (Article 49).

The amount of the penalty referred to in the preceding article shall be established in keeping with the seriousness of the violation, for which purpose the following shall be taken into account: 1. The form and scope of the restriction on free competition; 2. The size of the market affected; 3. The market share of the corresponding person subject to this Law; 4. The impact of the restriction of competition on other actual or potential competitors, on other parts of the economic process, and on consumers and users; 5. The duration of the restriction on free competition; and 6. The frequency of repeat offenses. (Article 50).

The Superintendency may impose, independently of the penalties referred to in Article 49, fines up to one million Bolivars (Bs. 1.000.000,oo), on those persons who do not comply with the orders contained in the decisions issued by the Superintendency in conformity with Articles 35 and 38. These fines may be raised by fifty percent (50%) of the original amount for non-payment. (Article 51).

Without prejudice to what is indicated in the Single Paragraph of this Article, persons affected by the prohibited practices may turn to the competent courts to seek indemnification for damages that occurred, once the decision of the Superintendency is final. (Article 55).

In case provisions of Section III of Chapter II of Title II of this Law are violated, persons affected may turn directly to competent courts without need to exhaust administrative appeals. However, if the persons affected decide to initiate the respective administrative proceeding in conformity with the provisions of Chapter I of Title IV of this Law, they may not demand redress for any damages they may have suffered as a consequence of the prohibited practices until after the decision of the Superintendency becomes final. (Single Paragraph, Article 55).

 
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