Newsroom

OFT launches criminal investigation into alleged international bid rigging, price fixing and market allocation cartel

70/07    3 May 2007

The OFT is carrying out a number of on-site searches as part of a criminal investigation into suspected cartel conduct in relation to the market for marine hoses used to transfer oil.

Searches are being carried out at two addresses in the UK, one of which is a home address. This is the first time that the OFT has carried out a search at a home address as part of a cartel investigation.

The allegations under investigation relate to a possible worldwide conspiracy between executives of a number of companies to rig bids, fix prices and allocate markets in the supply of marine hoses. Marine hoses are typically used by customers in the oil and defence industries to transport oil between tankers and storage facilities. The suspected cartel may have affected contracts worth hundreds of millions of pounds.

The OFT's criminal investigation has been coordinated with investigations by the US Department of Justice and the European Commission. The OFT's investigation is being carried out under the Enterprise Act. The OFT has also assisted the European Commission in connection with its investigation under Article 81 of the EC Treaty.

John Fingleton, OFT Chief Executive, said:

'The OFT is committed to making full use of our criminal enforcement powers to investigate allegations of serious cartel conduct. Cartels are not limited to national boundaries, and our coordinated work with the European Commission and the US Department of Justice illustrates our determination to investigate international and national cartels alike.'

The OFT does not normally comment on searches or criminal enforcement unless the matter is otherwise in the public domain, in this instance, US court proceedings have put the matter in the public domain. No assumption should be made at this stage that any criminal offences have been committed under the Enterprise Act. The OFT will not be in a position to determine its view on this until it has completed its investigation and assessed the available evidence.

NOTES

1. The OFT's criminal investigation is being carried out under the Enterprise Act 2002 and is directed at the conduct of individuals. Under section 188 of the Act it is an offence for individuals dishonestly to agree that businesses will engage in certain types of cartel activity, namely price-fixing, limiting supply or production, market-sharing and bid-rigging.

2. The OFT's investigation is separate from the Commission's, which is being carried out under Article 81 of the EC Treaty and is directed at the companies concerned. Article 81 prohibits anti-competitive agreements between undertakings.

3. Individuals convicted of the cartel offence under the Enterprise Act may be sentenced to up to five years' imprisonment and/ or an unlimited fine. Companies found to have infringed Article 81 of the EC Treaty may be fined up to ten per cent of their annual world wide turnover.

4. Anyone with information concerning bid rigging or other cartel conduct is encouraged to contact the OFT's Director of Cartel Investigations. The OFT operates a leniency programme for companies and other individuals who wish to confess to cartel conduct. For further information about this, please see the cartels area of this website or telephone 08457 22 44 99

Back to:Press releases