a tripartite report - Unctad

12 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
be enforced. Its existence may nonetheless have a
negative effect on investment, scaring foreign investors
and keeping them out of the country. Even
much more effective.
The law in the three jurisdictions should allow for
competition Authority or for not providing all the
information available. For example in the Euro-
Commission an incorrect, incomplete or misleading
information may go up to 1 per cent of the
total turnover in the preceding business year.
should be pecuniary or criminal, it has to be acknowledged
that many jurisdictions around the
participated in a cartel, the most serious antitrust
violation. While there are good reasons to introduce
criminal sanctions for cartels, there are also
good reasons for not to do so. The good reason
is that very often it is the individual employee that
sets up a cartel, while the company board is unaware
of it (for example when cartels are set up at
the local level by local managers of competing
companies). If this is the case criminal sanctions
just punish the individual responsible for the crime,
not the unaware corporation and the even more
unaware shareholder. A second good reason is that
criminal sanctions deter individuals that otherwise
be levied against the corporation. A third good
reason is that the deterrent level of a pecuniary
would ever decide it. The negative reason is that
the burden of proof for criminal sanction is much
of proof being beyond any reasonable doubt versus
the balance of probability), so that the actual
level of deterrence may not be as high as originally
thought. Furthermore, in many jurisdictions white
collar crimes are not considered very serious and
judges tend to give lenient punishments for such
offenses, further weakening the deterrent function
of imprisonment. Finally, since the individual
is responsible for the violation, corporations may
respond by not caring whether their employees
participate in a cartel, since they would not be
liable as a corporation. With criminal sanction, it
may well be that the legal provision against cartels
are less, not more respected.
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that are particularly troublesome are the fact
that many petty violations are subject to criminal
for the possibility of imprisonment of the manager
ity,
including not notifying a merger. Similarly in
Zambia imprisonment can be imposed to anyone
who delays or obstructs the Authority’s investigation
or gives the Commission false or misleading
information. This extension of the criminal nature
of sanctions is clearly not advisable because judges
are not likely to condemn anybody to serve a
prison term for not being cooperative enough in
the course of the investigations. As a result the
threat of imprisonment may not be taken seriously
and, to the contrary may lead to regulatory
capture (between the companies and competition
authority). As a result the threat of imprisonment
may deter foreign direct investment, hardly a ben-
Among the three countries only the United Republic
of Tanzania does not have criminal sanctions. It
is suggested that also Zambia and Zimbabwe im-
oblige imposing of criminal sanctions. In the case
of lack of cooperation with the Authority, a proper
easier to administer and to decide.
As for pecuniary sanctions for the punishment of
the violations of the substantive parts of the law,
the offending enterprise annual turnover, is in line
with international best practices. On the other
fact that antitrust violations are not subject to any
thority
itself but by a different body that does not
have a precise representation of the seriousness of
antitrust offenses. The best solution in Zambia and
in Zimbabwe would be to change the law, eliminating
the possibility of imprisonment for petty
violations. In alternative the Authority could well
issue a statement on when criminal sanction will
be used, strictly limiting the possibility of impris-