Monday 6th Jul 2020 - Logistics & Supply Chain

Go to jail

Here is a story that may not immediately appear to have much relevance to all you lawabiding logistics professionals out there but bear with me. You are a shady European drugs dealer and you find a way to import your illicit cargo into Norway from Belgium.

But the Norwegian police catch you at it and prosecute you for importing illegal substances. You serve your time but when you’re released the Belgium police demand your extradition from Norway so they can prosecute you for exporting the same drugs.

Now, logistics pros are adept at managing supply chains that aid the export and import of legal goods from one country to another. But just suppose for a moment that a cargo moving from one country to another causes a problem, say, pollution or some other environmental trouble. Does that mean that you could end up being prosecuted twice – in both of the countries concerned?

According to one of Britain’s top legal specialists in this area who I’ve spoken to, it’s not impossible. In the end, a court threw out the drug dealer case because it decided that the chain of events was all one action and the law of double jeopardy meant that he couldn’t face the same charges twice.

Potential charges
But that’s not to say the same will apply in the future. Much will depend on how far the original prosection had disposed of all the potential charges that could be brought, according to my legal eagle.

All this talk of prosecution and extradition may seem a long way from the normal working lives of most logistics professionals. But it was a long way from the lives of the three financiers caught up in what’s become known in the UK as the case of the NatWest Three. The three have now been extradited to the US to face charges of fraud.

Other business people are said to be on their way to the US including Ian Norris, former managing director of the international Morgan Crucible Company. He is facing prosecution for activities that weren’t even a criminal offence when he was alleged to be managing them. Moreover the charges, which relate to price fixing, were effectively dealt with by the EU three years ago.

I see a real cause for concern for logistics professionals in this trend largely because many of their activities such as the transportation of goods safely are increasingly subject to a welter of international regulatory control. Not only that, it’s also clear that regulators in some countries – the US is a prime example – are eager to win their spurs by bringing prominent business people to book.

And there are moves afoot which could make international prosecutions within Europe easier and possibly more common. The EU recently published a green paper which floats the idea that prosecutors in different countries should seek to reach agreement about where a trial takes place when an alleged crime crosses borders. There could even be a European body which can determine where the trial takes place, suggests the green paper.

Matters move slowly in the EU and we are a long way from seeing this proposal turn into reality. But my legal friend sees two serious problems – they can best be decribed by two examples from the world of supply chains.

First, through an oversight, HGVs which haul goods around Europe have not complied with specific health and safety regulations. Directors of the company which owns the HGVs discover the omission, put it right and make an admission to the regulatory authorities in their home country. The regulator recognises that they’re generally good corporate citizens, that they’ve owned up and gives them a mild slap over the wrist.

But regulators in another country where the HGVs have been operating take a harsher view. They decide a full-scale prosecution is called for. By honourably putting their hands up in country A, the directors may have provided evidence for a prosecution in country B.

Now consider the second cause for concern. It turns out these HGVs were more dangerous than originally thought. They caused problems in many European countries. Several countries want to prosecute but only one can. Wouldn’t it be tempting for the prosecutors to hand the case to the country which offers fewest rights to the defendants?

Nobody pretends that we are suddenly going to see dozens of logistics professionals standing in the dock. But in many companies the question of international prosecution can no longer be dismissed. A good first step would be to see whether the company’s directors’ and officers’ insurance policies cover cases such as these. Better than going directly to jail.

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