Global Cartel Fines Dip Before Libor, Car-Parts Penalties

Global criminal cartel fines dipped during the first part of the year in a pause before hefty penalties are likely to be imposed in probes of Libor and car parts, law firm Allen & Overy LLP said.

The penalties so far this year have totaled $677 million, less than a fifth of the more than $5 billion levied during 2012, Allen & Overy said in a report today. The drop-off was most pronounced at the two biggest antitrust regulators, the U.S. and European Union.

Allen & Overy partner John Terzaken said the EU is likely to levy large fines later this year in probes of car parts and the London interbank offered rate, where it lags behind its U.S. colleagues. The U.S. and U.K. have already fined three banks about $2.5 billion in the Libor probes and almost $1 billion in fines have been issued in the U.S. and Japan in the investigation of auto-parts makers.

“There will be some judgments by the end of the year,” said Terzaken, a former director of criminal enforcement at the U.S. Department of Justice’s antitrust division. “They want to show some momentum and keep the cases moving along.”

U.S. criminal antitrust fines in the first six months of the year were $192 million, compared with $1.1 billion in all of 2012. The EU fines so far this year totalled $72 million, compared with $2.3 billion in 2012, according to London-based Allen & Overy.

While the U.S. and EU fines have slowed, regulators in China, Australia, Brazil and South Africa are “coming into their own,” Terzaken said. The South African regulator this week issued a 1.46 billion rand ($146 million) penalty against 15 construction companies and China prosecuted an international cartel for the first time, leading to a 353 million yuan ($57.4 million) fine against makers of liquid-crystal display panels.

“The antitrust practice has been global for a long time, but it has become more global as the years have gone by,” Terzaken said.

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