[Federal Register Volume 62, Number 148 (Friday, August 1, 1997)]
[Notices]
[Pages 41414-41420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20209]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. AIG Trading Corp.; BP Exploration & Oil, Inc.; 
and Cargill International, S.A., Civil No. 97CIV5260, (S.D.N.Y., Filed 
July 18, 1997)

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16 (b)-(h), that a Stipulation and Order 
(``proposed Order'') and Competitive Impact Statement have been filed 
with the United States District Court for the Southern District of New 
York in the above-captioned case.
    On July 18, 1997, the United States filed a complaint to enjoin and 
restrain the defendants from violating Section 1 of the Sherman Act, 15 
U.S.C. 1, as amended. The complaint alleges that the defendants and 
others conspired to exchange current and prospective brokerage 
commission information with the purpose and effect of lowering 
brokerage commissions paid to brokers in the United States for 
arranging certain types of transactions, namely the purchase and sale 
of Brent spread contracts and contracts for differences (``CFDs''), 
involving Brent blend crude oil, a crude oil produced in the North Sea. 
Specifically, the complaint alleges that, in furtherance of this 
conspiracy, the defendants and others communicated with each other 
concerning current and prospective brokerage commission information on 
Brent spread contracts and CFDs and reduced such commissions. As a 
result of the conspiracy, the brokerage commissions paid to brokers on 
the purchase and sale of Brent spread contracts and CFDs were reduced.
    If entered by the Court, the proposed Order will prohibit each 
defendant from agreeing with any other trader, unrelated to such 
defendant, to (1) fix, lower, raise, stabilize or maintain any 
brokerage commission for Brent spread contracts and CFDs or (2) 
exchange any information for that purpose. The proposed Order will also 
prohibit each defendant from requesting or advising any other trader, 
unrelated to such defendant, to lower, raise or change any brokerage 
commission for Brent spread contracts and CFDs.
    If entered, the proposed Order will require each defendant firm to 
designate an antitrust compliance officer to instruct traders and 
company officials about the requirements of the proposed Order.
    Public comment is invited within the statutory 60-day period. Such 
comments will be published in the Federal

[[Page 41415]]

Register and filed with the Court. Comments should be addressed to 
Ralph T. Giordano, Chief, New York Office, U.S. Department of Justice, 
Antitrust Division, 26 Federal Plaza, Room 3630, New York, New York 
10278 (telephone: (212) 264-0390).
Rebecca P. Dick,
Deputy Director of Operations, Antitrust Division.

United States District Court for the Southern District of New York

    United States of America, Plaintiff, v. AIG Trading Corporation; 
BP Exploration & Oil Inc.; and Cargill International, S.A. 
Defendants.

Stipulation and Order

    Whereas, plaintiff, United States of America, having filed its 
complaint on July 18, 1997, and plaintiff and AIG Trading Corporation, 
BP Exploration & Oil, Inc. and Cargill International, S.A. 
(``defendants''), by their respective attorneys, having agreed to the 
entry of this stipulation and order without trial or adjudication of 
any issue of fact or law herein and without this stipulation and order 
constituting any evidence against or an admission by any party with 
respect to any such issue;
    Now, Therefore, before the taking of any testimony and without 
trial or adjudication of any issue of fact or law herein,
    Plaintiff and defendants hereby agree as follows:

I Jurisdiction and Venue

    This Court has jurisdiction over the subject matter of this action 
and over each of the parties consenting hereto. Venue is proper in the 
Southern District of New York.

II Definitions

    As used in this stipulation and order:
    A. Brent contract means a commercial transaction (i) calling for 
the delivery FOB at Sullom Voe, United Kingdom, of Brent blend crude 
oil, a crude oil produced in the North Sea, in cargo lots of 500,000 
barrels (plus or minus a 5% operational tolerance at the buyer's 
option) on an unspecified day in a given month forward; (ii) where the 
seller is obligated to give notice, by 1700 hours London time, not less 
than fifteen (15) days prior to the first loading day, of a three day 
loading range within which the buyer must take delivery; (iii) at a 
price fixed at the time of that contract; (iv) with payment within 
thirty (30) days of the bill of lading date; and (v) the contract is 
governed by English law, with jurisdiction over disputes in the English 
courts, or should any of these terms be changed or amended, any 
successor contract for a future purchase of Brent blend crude oil.
    B. Brent spread contract means a commercial transaction in which 
there is simultaneous: (i) Purchase of a Brent contract for a given 
month forward; and (ii) sale of a Brent contract for a different month 
forward.
    C. CFD means a commercial transaction involving the purchase of an 
instrument (a ``Contract for Differences'') the price of which is 
determined by the difference between: (i) The published price of a 
cargo of Brent blend crude oil already loaded or available to be loaded 
on a specified day (``dated Brent'') and, (ii) the published price of a 
cargo of Brent blend crude oil available to be loaded on an unspecified 
day of the first month forward. The ``published prices'' referred to 
are those reported presently in Platt's Oilgram Price Report.
    D. Broker means any person, other than a trader, who is regularly 
engaged in the business of providing, for remuneration, the service of 
locating buyers for prospective sellers, or sellers for prospective 
buyers, of Brent spread contracts or CFDs.
    E. Brokerage commission means the amount of remuneration paid to a 
broker for arranging the purchase and sale of Brent spread contracts or 
CFDs by other persons.
    F. Person means any individual, corporation, partnership, company, 
sole proprietorship, firm or other legal entity.
    G. Trader means any person who, in the ordinary course of its 
business, purchases or sells Brent spread contracts or CFDs.
    H. Any means one or more.
    I. Or means and/or.

III Applicability

    This stipulation and order applies to each defendant; to each of 
its executive officers, directors, successors and assigns, during the 
respective periods that they serve as such; and to any agents and 
employees assigned to purchase or sell any Brent spread contracts or 
CFDs or assigned to supervise the purchases and sale of such contracts.

IV Prohibited Conduct

    Each defendant shall not, directly or indirectly:
    (A) Agree with any other trader unrelated to such defendant to (1) 
fix, lower, raise, stabilize or maintain any brokerage commission for 
Brent spread contracts and CFDs or (2) exchange any information for 
that purpose; and
    (B) Request or advise any other trader unrelated to such defendant 
to lower, raise or change any brokerage commission for Brent spread 
contracts and CFDs to be paid by it.

V Limiting Conditions

    A. Notwithstanding the provisions of Section IV, any defendant 
shall be entitled to:
    (1) Engage in any communication or other contract with any trader 
when such action is taken: (a) To propose, negotiate, agree to, modify, 
execute or cancel a purchase of sale of a Brent spread contract and CFD 
with such trader as counter party or co-venturer; or (b) to allocate 
between the defendant and such trader responsibility for payment or 
negotiation of brokerage commissions relating to such purchase or sale.
    (2) Engage in any communication or other contact with a broker when 
such action is taken: (a) To propose, negotiate, agree to, modify, 
execute or cancel a purchase or a sale of a Brent spread contract(s) or 
CFD(s) concerning which such broker may or will receive a brokerage 
commission; or (b) propose, negotiate, agree to, or modify a brokerage 
commission or commissions.
    (3) Engage in any activity concerning the payment of a brokerage 
commission that is required or authorized by the constitution, bylaws, 
rules, regulations, resolutions or laws governing any market, whether 
now existing or hereafter established, which is or may become subject 
to the jurisdiction of either: (a) The Commodity Futures Trading 
Commission; or (b) any government agency or self regulatory 
organization whose responsibilities, pursuant to the laws of the United 
States of America, include authority with respect to the purchase and 
sale of Brent contracts, Brent spread contracts, or CFDs.
    (4) Engage in any activity concerning the payment of a brokerage 
commission to any broker located in a foreign country that is required 
or authorized by the constitution, bylaws, rules, regulations, 
resolutions or laws governing any market, whether now existing or 
heretofore established, subject to the jurisdiction of either: (a) The 
International Petroleum Exchange or (b) any government agency or self 
regulatory organization whose responsibilities, pursuant to the laws of 
any foreign country, include authority with respect to the purchase or 
sale of Brent contracts, Brent spread contracts, or CFDs.
    (5) Engage in any activity concerning the payment of a brokerage 
commission to any broker located in the United States that is required 
or authorized by the constitution, bylaws, rules,

[[Page 41416]]

regulations or laws governing any market, whether now or hereafter 
established, subject to the jurisdiction of either (a) the 
International Petroleum Exchange or (b) any government agency or self-
regulatory organization whose responsibilities pursuant to the laws of 
any foreign country include authority with respect to the purchase or 
sale of Brent contracts, Brent spread contracts or CFDs, provided that, 
if the activity is otherwise prohibited by Section IV, the plaintiff 
has not objected to such proposed activity within sixty (60) days 
following written notice to the New York Office of the Antitrust 
Division of the United States Department of Justice by a defendant of 
an intention to engage in such activity.
    B. Nothing in this stipulation and order shall prohibit defendants 
from engaging in any activity lawful under the Foreign Trade Antitrust 
Improvements Act, 15 U.S.C. Sec. 6a.
    C. No finding of any violation of this stipulation and order may be 
made based solely on parallel conduct.

VI Compliance Program

    In order to ensure compliance with the provisions of Section IV of 
the stipulation and order:
    (A) Each defendant shall maintain an antitrust compliance program 
which shall include designating, within sixty (60) days of entry of 
this stipulation and order, an Antitrust Compliance Officer with 
responsibility for implementing the antitrust compliance program and 
achieving full compliance with this stipulation and order. The 
Antitrust Compliance Officer shall, on a continuing basis, supervise 
the review of the current and proposed activities of his or her 
defendant company to ensure that it complies with this stipulation and 
order.
    (B) The Antitrust Compliance Officer shall, on a continuing basis, 
be responsible for the following:
    (1) Distributing, within thirty (30) days from the effective date 
hereof, a copy of this stipulation and order to each of the officers 
and employees of the defendant whose duties or responsibilities include 
determining, changing, proposing, approving, disapproving or 
implementing any brokerage commission.
    (2) Distributing in a timely manner a copy of this stipulation and 
order to any officer or employee who succeeds to a position described 
in Section VI(B)(1).
    (3) Briefing annually those persons who shall then have the duties 
identified in Section VI(B)(1) or (2) on the meaning and requirements 
of this stipulation and order and of the antitrust laws, and advising 
them that the defendant's legal advisors are available to confer with 
them regarding compliance with both the stipulation and order and the 
antitrust laws.
    (4) Obtaining from each person who shall then have the duties 
identified in Section VI (1) or (2), an annual written certification 
that he or she: (i) Has read, understands, and agrees to abide by the 
terms of this stipulation and order; (ii) is not aware of any violation 
of this stipulation and order that has not been reported to the 
Antitrust Compliance Officer; and (iii) has been advised and 
understands that his or her failure to comply with this stipulation and 
order may result in an enforcement action for civil or criminal 
contempt of court against the defendant or any other person who 
violates this stipulation and order.
    (5) Maintaining (i) a record of all certifications received 
pursuant to Section VI(B)(4); (ii) a file of all documents in existence 
at the commencement of and related to any investigation by the 
Antitrust Compliance Officer of any alleged violation of this 
stipulation and order; and (iii) a record of all non-privileged 
communications generated after the commencement of any such 
investigation and related to any such alleged violation, which shall 
identify the date and place of the communication, the persons involved, 
the subject matter of the communication, and the results of any related 
investigation.
    (C) If a defendant's Antitrust Compliance Officer learns of any 
violations of any of the terms and conditions contained in this 
stipulation and order that defendant shall immediately take appropriate 
action to terminate or modify the activity so as to comply with this 
stipulation and order.

VII Certification

    A. Within seventy-five (75) days after the entry of this 
stipulation and order, each defendant shall certify to the plaintiff 
whether it has designated an Antitrust Compliance Officer and has 
distributed the stipulation and order in accordance with Section VI(B) 
above.
    B. For five (5) years after the entry of this stipulation and 
order, on or before its anniversary date, each defendant shall file 
with the plaintiff an annual statement as to the fact and manner of its 
compliance with the provisions of Section VI.

VIII Plaintiff Access

    A. For the sole purpose of determining or securing compliance with 
this stipulation and order, and subject to any legally recognized 
privilege or work product protection, from time to time duly authorized 
representatives of the Department of Justice shall, upon written 
request of the Attorney General or of the Assistant Attorney General in 
charge of the Antitrust Division, and on reasonable notice to any 
defendant at its principal office, be permitted:
    (1) Access during office hours of such defendant, which may have 
counsel present, to inspect and copy (or to require the defendants to 
produce copies of) all records, documents, and tape recordings in the 
possession or under the control of such defendant, and which relate to 
compliance with this stipulation and order; and
    (2) Subject to the reasonable convenience of such defendant and 
without restraint or interference from the defendant, to interview 
officers, employees, or agents of such defendant, each of whom may have 
counsel present, regarding compliance with this stipulation and order.
    B. Upon the written request of the Attorney General or the 
Assistant Attorney General in charge of the Antitrust Division made to 
any defendant, such defendant shall prepare and submit such written 
reports, under oath if requested, relating to defendant's compliance 
with this stipulation and order as may be requested.
    C. No information, tape recordings, or documents obtained by the 
means provided in Sections VI, VII, and VIII shall be divulged by 
plaintiff to any person other than a duly authorized representative of 
the Executive Branch of the United States, except in the course of 
legal proceedings to which the United States is a party, or for the 
purpose of securing compliance with this stipulation and order, or as 
otherwise required by law.
    D. If at the time information, tape recordings, or documents are 
furnished by any defendant to plaintiff, such defendant represents and 
identifies in writing the material in any such information or documents 
to which a claim of protection may be asserted under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure and said defendant marks each page 
of such material, ``Subject to Claims of Protection under Rule 26(c)(7) 
of the Federal Rules of Civil Procedure,'' then plaintiff shall give 
ten (10) business days notice to such defendant at its Office of 
General Counsel prior to divulging such material in any legal 
proceeding (other than a grand jury proceeding) to which that defendant 
is not a party.

[[Page 41417]]

IX Rescission by Plaintiff

    The parties agree that the Court may enter this stipulation and 
order, upon motion of any party or upon the Court's own motion, at any 
time after compliance with the requirements of the Antitrust Procedures 
and Penalties Act, 15 U.S.C. Sec. 16, and without further notice to any 
party or other proceedings, provided that the plaintiff has not 
notified the parties and the Court that it wishes to rescind its 
agreement to entry of the stipulation and order. Plaintiff may rescind 
its agreement to entry of the stipulation and order at any time before 
entry of the stipulation and order by the Court by serving notice 
thereof on the defendants and by filing that notice with the Court. In 
the event plaintiff rescinds its agreement to entry of the stipulation 
and order, the stipulation and order shall be of no effect whatever, 
and the agreement among the parties shall be without prejudice to any 
party in this or any other proceeding.

X Jurisdiction Retained

    Jurisdiction shall be retained by the Court to enable any of the 
parties to this stipulation and order to apply at any time for such 
further orders and directions as may be necessary or appropriate for 
the construction or implementation of this stipulation and order, for 
the enforcement or modification of any of its provisions, or for 
punishment by contempt.

XI Expiration of Stipulation and Order

    This stipulation and order shall expire ten (10) years from its 
date of entry by the Court.

    For Plaintiff United States of America:
Joel I. Klein (JK-3481),
Acting Assistant Attorney General.
A. Douglas Melamed (AM-4601),
Principal Deputy Assistant Attorney General.
Rebecca P. Dick (RD-5481),
Deputy Director of Operations.
Ralph T. Giordano (RG-0114),
Chief, New York Office.
Philip F. Cody (PC-3521)
John J. Greene (JG-8281)
Edward Friedman (EF-0245)
John W. McReynolds (JM-0441)
Attorneys, U.S. Department of Justice, Antitrust Division, 26 Federal 
Plaza, Room 3630, New York, New York 10278, (212) 264-0390.

    For Defendants.
Paul, Weiss, Rifkind, Wharton & Garrison,
Daniel J. Beller (DB-7312),
1285 Avenue of the Americas, New York, New York 10019-6064, Tel: (212) 
373-3000.
Attorneys for AIG Trading Corporation,
Sullivan & Cromwell,
Garrard R. Beeney (GB-1345),
125 Broad Street, New York, New York 10004-2498, Tel: (212) 558-4000,
Attorneys for BP Exploration & Oil Inc.
Howrey & Simon
Margaret H. Fitzsimmons (MF-3327)
1299 Pennsylvania Avenue, N.W., Washington, D.C. 20004, Tel: (202) 783-
0800,
Attorneys for Cargill International, S.A.

Order of the Court

    The Court having reviewed the Complaint and other filings by the 
United States, having found that this Court has jurisdiction over the 
parties to this stipulation and order, having heard and considered the 
respective positions of the United States and the defendants [at a 
hearing on __________] and having concluded that entry of this 
stipulation and order is in the public interest, it is hereby Ordered:
    That the parties comply with the terms of this stipulation and 
order;
    That the Complaint of the United States is dismissed with 
prejudice;
    That the Court retains jurisdiction to enable any of the parties to 
this stipulation and order to apply to the Court at any time for such 
further orders and directions as may be necessary or appropriate for 
the construction or implementation of this stipulation and order, for 
the enforcement or modification of any of its provisions, or for 
punishment by contempt.

    So ordered this ______ day of __________, 1997.

----------------------------------------------------------------------
United States District Court Judge.

United States District Court for the Southern District of New York

    United States of America, Plaintiff, v. AIG Trading Corporation; 
BP Exploration & Oil Inc.; and Cargill International, S.A. 
Defendants.

Competitive Impact Statement

    The United States of America, pursuant to Section 2 of the 
Antitrust Procedures and Penalties Act (APPA), 15 U.S.C. Sec. 16(b), 
submits this Competitive Impact Statement in connection with the 
proposed Stipulation and Order submitted for entry with the consent of 
defendants in this civil antitrust proceeding.

I Nature and Purpose of the Proceedings

    On July 18, 1997 the United States filed a civil antitrust 
complaint under Section 4 of the Sherman Act, as amended, 15 U.S.C. 
Sec. 4, alleging that the defendants engaged in a combination and 
conspiracy, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1, 
to exchange current and prospective brokerage commission information 
with the purpose and effect of lowering commissions paid to brokers 
located in the United States for arranging certain types of 
transactions, namely the purchase and sale of Brent spread contracts 
and contracts for differences (CFDs), involving Brent blend crude oil, 
a crude oil produced in the North Sea. Specifically, the complaint 
alleges that, in furtherance of this conspiracy, the defendants and 
others:
    (a) Communicated with each other regarding current and prospective 
brokerage commissions; and
    (b) Reduced brokerage commissions.
    On July 18, 1997, the United States and the defendants also filed a 
proposed Stipulation and Order (``proposed Order'') to resolve the 
allegations in the complaint. The proposed Order will prevent each of 
the defendants from agreeing with other traders to (1) fix, lower, 
raise, stabilize or maintain any commission to be paid to a broker for 
arranging the purchase and sale of Brent time spreads or CFDs or (2) 
exchange any information for that purpose, and from requesting or 
urging any other trader to lower, raise or change any such commission 
to be paid by it.
    The United States and the defendants have agreed that the Court may 
enter the proposed Order after compliance with the APPA, unless the 
United States withdraws its consent (Section IX of the proposed Order). 
The proposed Order provides (as is standard in the Department's 
settlements) that it shall not constitute evidence against or an

[[Page 41418]]

admission by any party with respect to any issue of fact or law.
    Entry of the proposed Order will terminate this civil action as to 
the defendants, except that the Court will retain jurisdiction for 
further proceedings that may be required to enforce or modify the order 
entered, or to punish violations of any of its provisions by contempt.

II Description of Practices Giving Rise to the Alleged Violation of the 
Antitrust Laws

    Each of the defendants acted as a trader of Brent spread contracts 
and CFDs. Traders, including the defendants, regularly employed the 
services of brokers in connection with the purchase and sale of Brent 
spread contracts and CFDs. The brokerage commission paid by traders to 
brokers in connection with such purchases and sales is usually 
expressed in terms of an amount per barrel purchased and sold. In 
connection with Brent spread contracts and CFDs, a broker was usually 
paid a full brokerage commission by each party to the transaction.
    Beginning at least as early as July 1992, representatives of the 
defendants agreed with one another and other traders during various 
telephone conversations and in person in Europe and the United States 
to exchange current and prospective brokerage commission information on 
commissions paid to brokers, including brokers located in the United 
States, for arranging the purchase and sale of Brent spreads and CFDs. 
The purpose of these exchanges was to facilitate a reduction in the 
amount of commissions paid, and as a direct result of this agreement, 
defendants and other traders were able to reduce such commissions in 
July and August 1992.

III Explanation of the Proposed Stipulation and Order

    Format. The settlement of this civil action is in the form of a 
Stipulation and Order rather than a Final Judgment to ameliorate the 
likelihood that the settlement of this action will trigger (1) the 
institution of regulatory proceedings involving or (2) the imposition 
of regulatory sanctions against defendant AIG Trading Corporation (AIG 
Trading), its corporate parent and subsidiaries of the corporate parent 
in connection with various regulated businesses unrelated to the 
subject matter of this action.
    Defendant AIG Trading is a subsidiary of AIG Trading Group Inc. 
(Trading Group) which is a subsidiary of American International Group, 
Inc. (AIG). AIG and it subsidiaries comprise a large, diversified 
financial service organization operating in 130 countries and 
jurisdictions. They are engaged in the businesses of insurance, money 
management, financial risk management, mutual fund advisory services 
and operation, and trading in the foreign exchange, interest rate, 
precious and base metals and crude oil and natural gas markets. In 
1994, AIG and its consolidated subsidiaries generated revenues of over 
$22 billion.
    Because of their involvement in the highly regulated insurance and 
investment businesses, AIG and its subsidiaries are subject to 
supervision and review by the state departments of insurance in all 
fifty states, more than one hundred foreign insurance and bank 
regulatory agencies, the Securities and Exchange Commission (SEC) and 
securities regulators in the United States and various foreign 
countries as well as by various self regulatory organizations, which 
typically regulate both membership and the conduct of its members and 
their affiliates.
    During the period covered by the Complaint in this action, energy 
trading represented about seven percent of Trading Group's profit and 
the purchase and sale of Brent spread contracts and CFDs, the subject 
matter of the Complaint, represented only a very small part of all 
energy-related revenues and profits. In the case of the parent 
corporation, AIG, the purchase and sale of Brent spread contracts and 
CFDs by defendant AIG Trading generated only a minuscule portion of 
total AIG revenues.
    The entry of a Final Judgment against defendant AIG Trading in this 
case could, and in some instances would, trigger further inquiry and 
investigation by a host of regulatory entities, both in the United 
States and abroad, to determine whether AIG and its subsidiaries will 
be permitted to continue to engage in various regulated businesses as 
they have done in the past, or whether sanctions are appropriate.
    The triggering of such regulatory inquiries and investigations and 
the imposition of any such sanctions in connection with their 
businesses unrelated to the purchase and sale of Brent spread contracts 
and CFDs, would be burdensome to AIG and its subsidiaries. In light of 
the limited scope of the violation, this result is unwarranted.
    In view of the practices of various regulatory authorities and the 
provisions of certain applicable regulatory laws and rules, it is 
believed that settlement of this action in the form of a stipulation 
and order will likely expose AIG and its subsidiaries to fewer 
regulatory inquiries, investigations and possible sanctions in 
connection with businesses unrelated to the subject matter of this 
action than would entry of a Final Judgment containing identical 
relief. Accordingly, the proposed Order in settlement of this action is 
in the form of a stipulation and order.
    Section X of the proposed Order provides that its violation may be 
punished by contempt.
    Prohibited Conduct. The proposed Order will deter the recurrence of 
conduct that violates Section 1 of the Sherman Act. Specifically, 
Section IV of the proposed Order bars each of the defendants, unless 
otherwise specifically permitted, in connection with the purchase and 
sale of Brent spread contracts or CFDs, from:
    (A) Agreeing with any other trader to (1) fix, lower, raise, 
stabilize or maintain any brokerage commission or (2) exchange any 
information for that purpose; and
    (B) Requesting or urging any other trader to lower, raise or change 
any brokerage commission to be paid by it.
    Section V of the proposed Order contains certain limiting 
provisions that clarify the scope of the prohibitions in Section IV. 
Section V identifies specific activities that are not barred by the 
proposed Order. Specifically, Section V (A) provides that each of the 
defendants may (1) engage in contacts with any trader to (a) propose, 
negotiate or cancel a purchase or sale of a Brent spread contract or 
CFD with such trader as a counter party or co-venturer or (b) to 
allocate between themselves the responsibility for payment or 
negotiation of brokerage commissions relating to such a purchase or 
sale; (2) engage in contracts with a broker in connection with the 
purchase or sale of a Brent spread contact or CFD; (3) engage in 
brokerage commission activity required or authorized by any markets 
subject to the jurisdiction of either the Commodity Futures Trading 
Commission or any governmental or self regulatory organization whose 
responsibilities under United States law includes authority over the 
purchase and sale of Brent contracts, Brent spread contracts or CFDs; 
or (4) engage in activity concerning the payment of brokerage 
commissions to any broker located in a foreign country that is required 
or authorized by any market subject to the jurisdiction of either the 
International Petroleum Exchange or any governmental or self regulatory 
organization whose responsibilities under foreign law include authority 
over the purchase or sale of Brent contracts, Brent spread contracts or

[[Page 41419]]

CFDs; and (5) engage in activity concerning the payment of brokerage 
commissions to any broker located in the United States that is required 
or authorized by either the International Petroleum Exchange or any 
governmental or self regulatory organization whose responsibilities 
under foreign law include authority over the purchase or sale of Brent 
contracts, Brent spread contracts or CFDs, provided that, if the 
activity is otherwise prohibited by Section IV of the Stipulation and 
Order, the United States has not objected within sixty (60) days 
written notice by a defendant of an intention to engage in such 
activity.
    Section V(B) provides that nothing in the Stipulation and Order 
shall prohibit the defendants from engaging in activity lawful under 
the Foreign Trade Antitrust Improvements Act, 15 U.S.C. Sec. 6a.
    Section V(C) provides that no finding of any violation of the 
proposed Order may be made based solely on parallel conduct.
    Sections VI and VII require each defendant to maintain an antitrust 
compliance program to assure compliance with the proposed Order and 
with the federal antitrust laws. Under the compliance program, an 
antitrust compliance officer, to be appointed by each defendant is 
required to distribute copies of the proposed Order to each of its 
officers and employees with duties or responsibilities that include 
determining, changing, proposing, approving disapproving or 
implementing any brokerage commission paid to a broker for arranging 
the purchase or sale of Brent spread contracts or CFDs; to brief such 
personnel annually on the meaning and requirements of both the 
antitrust laws and the proposed Order; and to obtain from such 
personnel certifications that they have read and agree to abide by the 
terms of the proposed Order, and that they have been advised and 
understand that a violation of the proposed Order by them may result in 
their being found in civil or criminal contempt of court.
    In addition, the proposed Order provides a method for determining 
and securing the defendants' compliance with its terms. Section VIII 
provides that, upon the request of the Department of Justice, a 
defendant shall submit written reports, under oath, relating to the 
defendant's compliance with the proposed Order. The Department of 
Justice also is permitted to inspect and copy all books and records, 
and to interview officers, employees and agents of the defendants.
    Section XI makes the proposed Order effective for ten years from 
the date of its entry.
    The proposed order contains a proposed finding that entry of the 
proposed Order is in the public interest. Under the provisions of the 
APPA, entry of the proposed Order is conditional upon a determination 
by the Court that the proposed Order is in the public interest.
    The United States believes that the proposed Order is fully 
adequate to prevent the recurrence of the violation of Section 1 of the 
Sherman Act alleged in the Complaint, and that the disposition of this 
proceeding without further litigation is appropriate and in the public 
interest.

IV Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages suffered, as well as costs and reasonable attorneys' fees. 
Entry of the proposed Order will neither impair nor assist the bringing 
of such actions. Under the provisions of Section 5(a) of the Clayton 
Act, 15 U.S.C. 16(a), the proposed Order has no prima facie effect in 
any subsequent lawsuits that may be brought against the defendants in 
this case.

V Procedures Available for Modification of the Proposed Order

    As provided by the APPA, any person believing that the proposed 
Order should be modified may submit written comments to Ralph T. 
Giordano, Chief, New York Office, U.S. Department of Justice, Antitrust 
Division, 26 Federal Plaza, Room 3630, New York, New York 10278, within 
the sixty (60) days period provided in the Act. These comments, and the 
Department's responses will be filed with the Court and published in 
the Federal Register. All comments will be given due consideration by 
the Department, which remains free to rescind its agreement to entry of 
the proposed Order at any time prior to actual entry by the Court. The 
proposed Order provides that the Court retains jurisdiction over this 
action, and the parties may apply to the Court for any order necessary 
or appropriate for modification, interpretation, or enforcement of the 
Order, or for punishment of any violation thereof by contempt.

VI Alternative Forms of Relief Considered

    The only alternative to the proposed Order considered by the United 
States was a full trial on the merits and on relief. Such litigation 
would involve substantial cost to the United States and is not 
warranted because the proposed Order provides appropriate relief 
against the violations alleged in the Complaint.

VII Determinative Materials and Documents

    No materials or documents of the type described in Section 2(b) of 
the APPA, 15 U.S.C. 16(b), were considered by the United States in 
formulating the proposed Order. However, a letter, dated June 20, 1997, 
from plaintiff's counsel to counsel for defendant Cargill 
International, S.A. acknowledging Cargill International's right under 
current law to seek relief from the compliance provisions of Section 
VIII in the event it believes a conflict has arisen between any request 
for information or documents under those provisions and foreign law, 
was considered determinative by Cargill International in agreeing to 
the proposed Order and is attached hereto as Exhibit A.

    Dated: July 18, 1997.

    Respectfully submitted,
Philip F. Cody,
John J. Greene,
Edward Friedman,
John W. McReynolds,
Attorneys, Antitrust Division, United States Department of Justice, 26 
Federal Plaza, Room 3630, New York, New York 10278, (212) 264-0395.
    July 14, 1997.
Margaret H. Fitzsimmons, Esq. Howrey & Simon,
1299 Pennsylvania Ave. NW., Washington, DC 20004-2402.

 Re: Cargill International, S.A.
    Dear Ms. Fitzsimmons: During our negotiations of a civil 
settlement in this case, you suggested the possibility that a 
conflict could arise between the plaintiff access provisions in 
Section VIII of the proposed stipulation and order, which authorizes 
the Assistant Attorney General to inspect documents or conduct 
interviews and to request written reports, and the law or orders of 
foreign governments, which may appear to prohibit compliance with 
such provisions. Of course, we would attempt to work with Cargill 
International, S.A. to avoid any such conflict in exercising our 
rights under Section VIII. In the event we could not reach 
agreement, Cargill International would be free to seek relief from 
the U.S. order court from its obligations to comply with any Section 
VIII request.

[[Page 41420]]

          Sincerely yours,
Philip F. Cody,
Assistant Chief.
[FR Doc. 97-20209 Filed 7-31-97; 8:45 am]
BILLING CODE 4410-11-M