When Treaty Is Expired, Better Late Than Never

(CN) - Two members of a steel beams cartel must pay $18.5 in fines, Europe's high court ruled, finding that the European Commission can enforce expired treaties for events that happened while the treaties were still in effect.

The European Commission imposed a $14 million penalty on Luxembourg-based ArcelorMittal in 1994 for participating in the cartel from 1988 to 1991. In 1998, the commission fined German steel company ThyssenKrupp $4.5 million for its role in the scheme.

European courts annulled the fines, finding the companies lacked proper defense in the proceedings.

In 2006, the commission brought fresh challenges against both, applying the substance of a European steel treaty that had expired in 2002 and procedural rules on competition laid out in a new treaty.

The General Court annulled the commission's decisions against subsidiaries of ArcelorMittal and ThyssenKrupp as time barred, but upheld the penalties against the parent corporations.

Upon appeal, the Court of Justice said treaties would be meaningless if they stopped applying, even for the time they were in force, once they expire. The European Commission should therefore be able to implement the substance of an expired treaty if it relates to activities that occurred when the treaty was still in effect, the court ruled.

Any diligent company would know of the treaty rules, and those that violate them should be punished, the court said.

Since the procedural rules applied from the time they were passed, the commission was allowed use these, too, the Court of Justice concluded.

The Court of Justice upheld the penalties of $14 million penalty against ArcelorMittal and $4.5 million against ThyssenKrupp. The courts are based in Luxembourg.

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