Dow is “not liable” for European CR penalties

Zurich, Switzerland - Dow Chemical has said it is not responsible for any further liabilities relating to the activities of its former joint venture company, DuPont-Dow Elastomers LLC (DPDE)with regard to anti-competition issues in polychloroprene rubber.

In a statement, Dow said, "Pursuant to an April 2004 agreement, the response to this competition investigation by the European Commission is being managed by DuPont. Additionally, Dow withdrew from DPDE in June 2005. That entity continues now under the name of DuPont Performance Elastomers. "

Dow continued, "Dow is cooperating with the European Commission with respect to the investigation. Pursuant to Dow's agreement with DuPont, Dow refers any further inquiries with respect to this investigation to DuPont."

Nevertheless, the company has received a Statement of Objection - a formal charge - from the European Commission concerning alleged anti-competitive activity. In an SEC filing dated 1 May, 2007, the company said, "Additionally, on March 10, 2007, the Company received a Statement of Objections from the EC stating that it believed that DuPont Dow Elastomers L.L.C. (“DPDE”), a former 50:50 joint venture with E.I. du Pont de Nemours and Company (“DuPont”), together with other participants in the synthetic rubber industry, engaged in conduct in violation of European competition laws with respect to the polychloroprene business. This Statement of Objections specifically names the Company, but only in its capacity as a former joint venture owner of DPDE."

In January 2005, DPDE agreed to plead guilty to price-fixing of polychloroprene over a three-year period from Sept 1999 to April 2002 and paid an $84 million fine. That investigation, carried out by the US Department of Justice, is very similar to the current investigation by the EC competition authorities. DuPont-Dow was a 50-50 joint venture, now dissolved, between DuPont and Dow Chemical. The polychloroprene activities of the DuPont-Dow joint venture have now passed to DuPont Performance Elastomers (DPE).

An official statement from DuPont Performance Elastomers said, "While the investigation continues, we are not at liberty to comment any further."

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SEC statement from Dow Chemical (search on "chloroprene" for the relevant paragraph)