SA’s Competition Commission praised for foreign exchange case: Wins global award

20 Apr 2018


A steely determination to go for banks accused of manipulation in foreign exchange markets weighed in heavily to see South Africa’s Competition Commission scoop the ‘Agency of the Year in Asia- Pacific, Middle East & Africa’ award.

South Africa’s Competition Commission came ahead of prominent nominees like Taiwan’s Fair Trade Commission and Egypt’s Competition Authority at the 8th Annual Global Competition Review Awards (GCR) held in Washington DC. GCR is recognised as the world’s leading competition law and policy journal and news service that monitors competition enforcement worldwide.

South Africa’s Competition Commissioner, Tembinkosi Bonakele, said “We are honoured to receive this award and to be recognised by our global peers as a world-class organisation. We look forward to a very productive and fruitful year ahead, as we work hard to effectively contribute towards a growing and inclusive economy for all South Africans.”

Best of the best

The winners were chosen by the international competition community through a nomination and online voting process. The shortlisted nominees included institutions, people and matters considered to be the “best of the best” in 2017.

GCR said “Taiwan’s Fair Trade Commission and Egypt’s Competition Authority were also nominated, but South Africa’s competition enforcer emerged as the clear winner. Top of the slate is its foreign exchange case. Barring settlements or dropping the case, the enforcer is set to become the first competition authority worldwide to have to prosecute its forex accusations in court, as other countries have reached a deal or issued administrative decisions.

“Beyond that, the commission is the best-established antitrust agency in Africa, with a track record of cracking down on cartels big and small, and of involvement in some of the world’s biggest deals,” said GCR.

Steely determination

South Africa’s Competition commission has showed steely determination in going after global banks in the foreign exchange manipulation case. It has charged that from at least 2007, a group of banks had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar / Rand currency pair. It further charged that these banks manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.

The Commission has since referred a collusion case to the Competition Tribunal for prosecution. Names in the case  include Bank of America Merrill Lynch International, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank, Investec, Standard New York Securities, HSBC Bank, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa, Commerzbank; Australia and New Zealand Banking Group, Nomura International, Macquarie Bank, Citibank, ABSA Bank, Barclays Capital and Barclays Bank.

Citibank has opted for a settlement agreement and admission of guilt and has undertaken to assist prosecution as a witness. It will also pay an administrative penalty of R69.5 million.

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