AFTER BEING INVESTIGATED BY THE TAX ADMINISTRATION AND THE ANPC, BANKS GET INVESTIGATED BY THE COMPETITION COUNCIL
BURSA 12.12.2017

EMILIA OLESCU (translated by Cosmin Ghidoveanu)
 
mărește imaginea
     * Chirițoiu: "We suspect an exchange of sensitive information on the banking market"
     * Dan Suciu, NBR: "The audits of the Competition Council can't be a reason for panic whatsoever"
     * Unannounced audit at Finmedia
     * The investigated institutions are at risk of being fined 10% of their turnover
     * Vasilescu: "The NBR has nothing to do with these investigations"
       The financial banking system seems to be the focus of most of the investigation entities. After being audited by the National Tax Administration Agency (ANAF) and by the National Consumer Protection Authority (ANPC), some of the banks which operate in Romania have also been investigated by the Competition Council (CC).
     It bears mentioning that the action of the Tax Administration led to the imposition of additional amounts owed in taxes on several major banks in the system, and the ANPC fined several banks for unfair practices, and even issued an order for the ceasing of those practices, aimed at Raiffeisen Bank.
     The investigation of the Competition Council is in the beginning, according to a press release, which announces that the inspectors of the Competition Council have conducted unannounced audits at 25 banks.
     The aforementioned document mentions that the audits of the investigative institution are the result of complaints received this summer from some of the market entities.
     Among other things, the Competition Council is investigating whether the targeted entities have struck deals with each other concerning their pricing. The investigation is targeting the financial and operational leasing services market and the consumer credit sector. The audited entities could see fines as high as 10% of their turnover, it if is proven that they have exchanged information.
     The National Bank of Romania (NBR) is interested in the result of the audit made by the Competition Council, said Adrian Vasilescu, strategy consultant with the Central Bank. "We are interested in knowing if the banks have broken the law or not. We hope that banks will come out clean from this audit, but aside from that hope we are also interested in knowing exactly what the situation is like", Adrian Vasilescu said in a personal statement.
     He told us: "It is important to see what the Competition Council is looking to discover in the financial institutions. The investigation entity is looking to see whether trade-related sensitive information has been exchanged, meaning information concerning the passive interest policy, active interest policy, or a possible coordination, meaning a cartel for price fixing, namely of interest rates and commissions.
     I want to point out the fact that the NBR has no connection to these investigations, which concern aspects which are not the purview of the NBR, and which are exclusively the responsibility of the Competition Council. The NBR is not participating in the investigation, is not collaborating with the Competition Council, is not the one that approves the investigation nor is it being asked for any approval or permit. But, since among the prerogatives of the NBR, the law includes the authorization, regulation or the oversight of credit institutions, it is natural that the Central Bank would pay attention and be interested in the manner in which is investigation is being conducted, as well as in its results, which can shed a light on the behavior of companies that make up the Romanian banking system.
     I do hope, however, that there is no connection at this moment, between the investigations of the banks and what is happening in the Parliament, where proposals to legislate on bank interest rates are being made. (ed. note: we remind that PNL senator Daniel Cătălin Zamfir recently announced that he supports a legislative initiative which involves the capping of bank interest rates at a level of the policy rate plus 50% of the policy rate). Just banks can be suspected of coordinating with each other, even though they are officially independent from one another, so can the institutions of the state be suspected of doing the same. Because the same voices that support those legislative initiatives in the parliament are making public statements concerning the investigation of the Competition Council."
     In the opinion of Adrian Vasilescu, the Competition Council has announced that it would investigate banks when ROBOR started rising and public discussions concerning the legislative drafts on the level of interest rates charged by banks started by banks started being discussed. "There are things happening in the public arena which I can't help but think about", said Vasilescu. "We note, from the statement of the president of the Competition Council, that the institution that he is in charge of constantly monitors financial market, which means that we are talking about a continuous action. However, it is very hard to uncover a cartel between several companies, regardless of their sector. I think that the Competition Council has gotten involved in a very complicated problem.
     Also, I don't think that the institution has considered the presumption of innocence, but by making public all this information, all of a sudden the idea was induced in the public mind that the banks had made an agreement and that is why the loans are expensive. That is done without taking into account the fact that we are in Romania and the banking system has certain costs which influence lending, and those costs are quite high. Other countries don't have to deal with the situations that Romanian banks have to deal with."
     Adrian Vasilescu concluded that the investigation of the Competition Council does not affect the banking system in any way.
     * Unannounced audits at BCR, Raiffeisen Bank and Bancpost
     Companies which are the target of the Council include some of the biggest banks on the market, namely BCR, Raiffeisen Bank, Bancpost, Unicredit Bank, as well as Professional Associations such as the Council of Professional Associations of Romania (CPBR), the Association of Operating Leasing Companies (ASLO) or the Association of Romanian Financial Companies (ALB). The Competition Council has also investigated the Finmedia publication, as per its press release: "The Competition Council has conducted unannounced inspections at the headquarters of 25 banks, Non-banking Financial Institutions, leasing companies, professional and employer associations in the financial services sector, being one of the biggest actions of the CC.
     The inspections have taken place as part of two investigations started by the Competition watchdog on the operational leasing services and consumer credit markets in Romania.
     Inspections were conducted simultaneously at Bancpost SA, Unicredit Bank SA, Raiffeisen Bank SA, Banca Comercială Română SA, BCR Leasing IFN SA, BRD Sogelease IFN SA, Raiffeisen Leasing IFN SA, Unicredit Leasing Corporation IFN SA, Viva Credit IFN SA, ALD Automotive S.R.L., Arval Service Lease Romania S.R.L., Autotechnica Fleet Services S.R.L., BCR Fleet Management S.R.L., BT Operational Leasing S.A., Leaseplan Romania S.R.L., Porsche Mobility S.R.L., Unicredit Leasing Fleet Management S.R.L., Finmedia S.R.L., the Association of Operational Leasing Companies (ASLO), the Council of Banking Professional Associations (CPBR), the Association of Financial Companies in Romania (ALB), the Federation of the Financial Services Professional Associations of Romania, the Leasing and Credit Professional Association and the IFN Credit Professional Association".
     Bogdan Chirițoiu, the president of the Competition Council, told us that this investigation will take at least a year if the entire procedure unfolds or less than a year if the targeted entities "confess": "We are constantly monitoring this market and we have been preparing starting the investigation for a long time, and an important part was played by the information in August by one of the investigated parties, which applied the clemency program".
     The Competition Council doesn't have any other planned control investigations, as Mr. Chirițoiu said, who told us that the main line of business of the investigation is represented by the commissions and fees. "We suspect an exchange of sensitive information. We are not referring directly to the ROBOR, currently", he said.
     One of the investigations of the CC concern potential exchanges of sensitive commercial information among competitors on the financial leasing market and consumer credit market, the quoted document states, stressing that the investigated parties are the Romanian Council of Banking Professional Associations, the Association of Financial Companies in Romania (ALB), the Romanian Leasing and Credit Professional Association (PLCR), the NFI Credit Professional Association (PCIFN) and all the companies that are members of these organizations, as well as Diplomat Consult SRL.
     "The second investigation also concerns a possible coordination of trade policies through price fixing and/or a market sharing through an exchange of sensitive information among competing companies operating on the Romanian market for operational leasing market and ancillary services", the representatives of the Competition Council further say. "The unannounced inspections are authorized by the Bucharest Court of Appeal and are justified by the need to obtain all the information and documents needed to clarify the possible anticompetitive practices used. The unannounced inspections represent an important stage of the procedures to investigate a possible anticompetitive behavior, and those inspections do not represent an advance ruling when it comes to the companies' guilt. The documents seized in the inspections are being analyzed by the Romanian competition authority, as part of the specific procedures".
     If the Competition Council finds a violation of the competition rules, the companies involved could be forced to pay fines as high as 10% of their turnover. The companies that cooperate with the competition authority, as part of the clemency program, can get immunity from fines or substantial cuts of the fines levied on them, the Competition Council announces.
     The representatives of BCR, Raiffeisen Bank and Unicredit Bank told us that they are not commenting on the matter, whereas Bancpost did not respond to our enquiry by the time the newspaper had left for the printers.
     When asked by BURSA whether the actions of the Competition Council would create a panic on the profile market, Dan Suciu, the spokesperson of the National Bank of Romania (NBR), told us: "There is no panic that can be created, let's be reasonable. I understand it's a competition-related investigation starting off from the leasing market. That's very good! I've seen some «wise» people who want to tie the investigation to the NBR. They are the same tired (or tireless) characters when it comes to saying all kinds of things that have nothing to do with reality whatsoever. The law is clear, the institutional attributions are clear, you can find out more details from the Competition Council, of course".
     Lawyer Gheorghe Piperea thinks that the verifications of the Competition Council pertain to the recent hike of the ROBOR, also reminding of the part that the NBR plays in the evolution of this index.
     * Piperea: "The coordinated growth of the ROBOR is a manipulation, a cartel-like practice that should not be overlooked by the authorities"
     One of the investigated entities has admitted its deed and will only be fined with 2.5% of its turnover, lawyer Gheorghe Piperea warns. He wrote the following on his Facebook page on Monday: "The other investigated entities, including BCR, Raiffeisen and Unicredit, could be fined as much as 10% of their turnover. Run the numbers and see how much money would these magnificent capitalists have to pay to the state budget for their grand deeds on the battlefield of the "liberal" market economy. While they may be able to defy the ANPC and treat it in contempt when it levies paltry fines and when it decides the end of the banks' deceitful practices, without also having the courage to decide the suspension of a bank's operation, we are now talking about the Competition Council. This time, it's no joke".
     Gheorghe Piperea went on to say: "What is important for all those who have been affected by the rigged prices of the financial products and the cartel-like splitting of the financial banking market: you can bring a lawsuit, based on Emergency Government Ordinance no.39/2017, for any loss which you can prove as having being caused by these anticompetitive actions.
     Just so you don't get confused with multiple questions:
     (i) rigged prices also means commissions and fees for the CHF loans, raised immediately after the grace period to levels similar to those used on the loans in lei and Euros, and which happened in a cartel-like coordinated manner, simultaneously by all the banks, which lied to you that those CHF loans are cheaper than those in lei and Euros and that is why it would be « a good thing » to borrow in CHF;
     (ii) rigged prices means keeping the ROBOR for three years (2014-2017) at an incredibly low level, to sell «cheap» loans to the entire group of consumers of such loans, vulnerable individuals, with low incomes, in the beginning of their careers, and for deliberately raising the ROBOR level in a coordinated, cartel-like manner in the autumn of 2017.
     I want to remind that I said as early as September that the coordinated hiking of the ROBOR is manipulated, that it is a cartel-like practice which should not be overlooked by the authorities. I see that for now, the only authority which has seen anything - and has obtained a confession from the guilty parties (...) - is the Competition Council. The institutions of power, the grand pillars of the rule of the law, meaning the SRI, DNA, DIICOT haven't seen nothing, with the exception of the selfie of Mr. van Groningen (ed. note: Steven van Groningen, CEO Raiffeisen Bank), which was taken at the protests for the independence of the judicial system.
     The NBR, obviously, isn't doing and saying anything. Moreover, the NBR (...) adamantly claims that the rise of the ROBOR since September (just like the coordinated hike of the leu/euro exchange rate and of the inflation) are «natural», because apparently they are dictated by the laws of the market economy. (...) Let's see what the Competition Council has to say. And then, let's see what is the opinion of the ECB, the European Banking Authority and the European Commission, entities which are very favorable to the banks, regardless of their honesty". 

     The Council of Banking Professional Associations in Romania (CPBR) has cooperated with the inspectors of the Competition Council, on November 27, when they conducted their audit at the CPBR, said Bogdan Preda, the secretary general of the Council, who mentioned: "The explanation offered to the CPBR by the inspectors of the Competition Council consisted of the fact that, being an inspection concerning the leasing and consumer credit companies, it has also been extended to the CPBR, because our professional organization is a partner of the Leasing and Credit Professional Association (PLCR), made up of some ALB member entities, as part of the Federation of Financial Services Professional Associations in Romania (the Finban Federation).
     We hereby reiterate - just like we have done on other occasions - the fact that neither the CPBR or the FinBan Federation, as entities of professional representation created based on the Law of Social Dialogue, do not have among their activities the commercial, risk or market policies specific to each of their members nor do they ask for, centralize, distribute or receive such information, aspects which have besides been made clear to the inspectors of the Competition Council ".
     
     The analysis of the Competition Council when it comes to BT Operational Leasing is in its starting phase and has to do with the exchange of information in the Association of Operating Leasing Companies (ASLO), the representatives of BT told us. They said that BT Operational Leasing will supply the details and the documents needed for an analysis throughout the course of the investigation. "The management of BTOL is confident that they will confirm there was no violation of the competition principles on the operating leasing market", the quoted sources further said.

 
 

 
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     21.08.2018 
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