Competition Commission nets global award on forex cartel case

Tembinkosi Bonakele, head of the Competition Commission.
Tembinkosi Bonakele, head of the Competition Commission.

The Competition Commission’s work on the foreign exchange cartel case saw it beat out competing agencies in the Asia-Pacific, Middle East and Africa region to win an international award.

The commission was recognised as the Agency of the Year in Asia-Pacific, Middle East & Africa at the Annual Global Competition Review Awards held in Washington DC, it said in a statement issued on Thursday.

This is the eighth year that the Global Competition Review (GCR) Awards have been running. The GCR is a competition law and policy journal and news service and monitors competition enforcement globally, the commission explained.

The international competition community chooses the winners through a nomination and online voting process.

South Africa beat Taiwan’s Fair Trade Commission and Egypt’s Competition Authority to be the regional 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,” the commission said.

The commission had been investigating price-fixing and market allocation in forex trading since April 2015. A total of 17 banks were implicated. The commission referred the case to the Competition Tribunal in 2017.

One of the banks, Citigroup, reached a settlement with the commission and agreed to pay a R69.5m fine, and ABSA apologised for its involvement. The commission did not issue a fine against the bank.

The commission explained that beyond the forex cartel case, it was also recognised by the GCR as the “best-established” antitrust agency in Africa, given its track record of “cracking down” on cartels.

World-class organisation

Commissioner Tembinkosi Bonakele said it is an honour to receive the award and to be recognised by 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,” he said.

Chair of the economic development committee Elsie Coleman said in a statement that the award shows that South Africa can take “centre-stage” in the global arena.

“The Competition Commission as the enforcer is the first competition authority in the world with an established antitrust agency and has been known to take on cartels without fear or favour,” the statement read.

The commission presented its annual performance plan to Parliament’s portfolio committee on economic development this week.

The commission will initiate eight cartel investigations in the 2018/19 year. This, however, is lower than the commitment of 25 initiations made in 2017/18. The commission explained that this is due to resource constraints, as well as the increasing and complex volume of cases.

Those investigations affected include automotive components manufacturers, manufacturers of edible fats and oil, suppliers of set top boxes, fresh produce agents and beef producers.

The commission also warned it would take longer to complete ongoing investigations. At least 50% of cases are projected to be completed in 12 months, and 75% within 24 months.

However, the commission plans to win more than 75% of its cases through the tribunal or the courts.

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