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Fines to the banking “cartel”: one by one, discover the penalties that the Public Prosecutor’s Office wants to reduce and that the Competition intends to aggravate

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Eleven banks operating in Portugal are on trial in Santarém for exchanging credit information with each other, which they should keep to themselves. They contest the global fines of around 225 million euros which were imposed by the Competition Authority in 2019. In the closing arguments of the trial, which began last week in Santarém, continuing in what is starting now, the prosecution has pointed to a reduction in these fines, but not extended to all banks. The AdC, on the other hand, hears that there will be a worsening for the biggest banks.

Caixa Geral de Depósitos has suffered the heaviest fine of 82 million euros in the administrative infringement procedure led by Margarida Matos Rosa, and the AdC even wants to increase it due to the position of the public bank before the courts, which she considers negative. The public prosecutor points here to its maintenance. Ditto for Santander Totta, with a penalty of 35.65 million euros.

In the Banco Comercial Português and Banco Montepio cases, the public prosecutor wants a reduction in the penalties initially applied by the AdC (respectively 60 million and 26 million – halved due to the leniency program), to which, ultimately arguments, the The administrative authority directly opposed it, wishing for an increase in the fines.

The final decision of the Competition, Regulatory and Supervisory Tribunal will be made in April, the month for which the sentencing of Judge Mariana Machado is expected. There is then the possibility of appeal.

fines

  • General cash deposits

Initial AdC fine: 82 million

Fine requested by the deputy in indictment: 82 million

Fine requested by the AdC in indictment: More than 82 million euros

Paulo Macedo, Executive Chairman of CGD

Prosecutor Paulo Vieira, who is following the trial, estimates that the fine, being high, represents only 7 million euros for each year of infringement, lower than the profits that would have been obtained with the exchange of information. “It appears that this fine must be maintained in the precise terms” of the AdC’s conviction. Paulo Vieira criticized the way CGD, despite being a fully state-owned bank, handled the case: “in fact, they treated the whole thing lightly”.

Precisely because of the way it handled the case at trial, the AdC requested an increase in the fine from the bank chaired by Paulo Macedo. The absence of regret and the “light” treatment of the case are the reasons for the request of Ana Nogueira, representative of the entity.

  • Portuguese commercial bank

Initial AdC fine: 60 million

Fine requested by the MP in the pleadings: Should drop if the 2021 results harm the capital

Fine requested by AdC in closing arguments: More than 60 million

Miguel Maya, Executive Chairman of BCP Author: Ana Baião

The fine seems “adequate”, but the MP is not sure, as it depends on the 2021 results, which will be released on February 28. “If the soundness of the bank is affected, if that is the case, it is understood that the fine must be reduced,” said Paulo Vieira. Results in Poland indicated lower profits for the bank, due to the legacy of Swiss franc mortgages.

The absence of repentance and censure on the facts leads the AdC to ask the court to consider raising the sanction of the BCP. Furthermore, the authority opposes the possibility of reducing the fine due to the financial situation of the banks.

  • Santander Totta (including popular)

Initial AdC fine: 35.65 million

Fine requested by the deputy in indictment: 35.65 million

Fine requested by AdC in closing arguments: More than 35.65 million

Pedro Castro e Almeida, Executive Chairman of Santander

“The calculated fines are adequate, being to be maintained in full, in view of the results of 2021, this had very expressive benefits”, justified the prosecutor.

AdC disagrees. As with CGD, the attitude towards the court was criticized for being uncooperative (which the defense disputed). Moreover, there are no regrets either. Therefore, a greater penalty was requested.

Initial AdC fine: 30 million

Fine requested by the deputy by the AdC in closing arguments: Less than 30 million

Fine requested by the AdC in the indictment: 30 million

João Pedro Oliveira e Costa, Executive Chairman of BPI. ANTÓNIO PEDRO SANTOS/LUSA

“It is understood that the fine is adequate, but, given the correct posture, and the assumption of responsibility through its president of the administration, a marginal reduction in the fine is suffraged”, underlined the representative of the public ministry.

The AdC maintains its initial position.

AdC fine: 26 million, canceled at half the amount by the leniency program

Fine requested by the MP: Maximum of 4.4 million, raised to half the amount by the program

The bank joined the AdC leniency program (the second membership, after Barclays, for which it would be entitled to an exemption of up to 50% of the fine). The prosecutor, however, criticized the bank’s position, for having an inconsistent position at the trial stage, and “acts to the contrary”, with leniency. Despite this, it is important to consider in the decision, defended Paulo Vieira, this membership. Regarding the sanction, the prosecutor recalled the “social character” of Montepio, as well as its “fragile economic situation” and the fact that the capital belongs to savers (the 600,000 members of the mutual). “It appears, given the need for robustness, that the fine should be substantially reduced, to prevent any type of situation. It appears that at its overall maximum it should not exceed 4.4 million, waived in two (2.2 million)”, specified the prosecutor, specifying that the public prosecutor’s office “will not object to the fine is paid in instalments, of 100 thousand euros each”.

The AdC rejects the idea that there could be a reduction of the fine because of the financial situation of the persons concerned (“it would be to come to the conclusion that crime pays, especially in the banking sector”, s defended Ana Nogueira, director of the AdC). In the case of Banco Montepio, there is a “reprehensible procedural strategy” to aggravate for having participated in the leniency – which configures the collaboration in an illicit that it recognizes -, but in the judgment it does not recognize the infringements.

Initial AdC fine: 2.5 million

Fine requested by the deputy in indictment: 2.5 million

Fine requested by the AdC in argument: 2.5 million

Author: Thiago Prudêncio/SOPA Images/LightRocket via Getty Images

“The fine is adequate, and it must be fully maintained”, in particular because it generated “truly extraordinary profits”, explained the deputy’s official.

The AdC maintains its initial position.

Initial AdC fine: 700,000 euros

Fine requested by the deputy in closing arguments: Symbolic

Fine requested by AdC in final pleadings: 700,000 euros

Agency of the former BES. Author: PATRICIA DE MELO MOREIRA/AFP via Getty Images)

There is no impediment justifying a high fine, which is why the prosecution is asking for a fine of “simple symbolic value”.

The AdC maintains its initial position.

Initial AdC fine: 500,000 euros

Fine requested by the deputy in the indictment: Less than 500 thousand euros

Fine requested by AdC in final pleadings: 500,000 euros

The prosecutor believes that there should be a “marginal reduction in the fine”, praising the work done by the defense. However, it refuses that there is no fine on the grounds that the infringements were committed by BPN, meanwhile acquired by BIC, for the simple fact that the NIF of BPN was assumed by BIC.

The AdC maintains its initial position.

Initial AdC fine: 350,000 euros

Fine requested in the final pleadings by the deputy: 350 thousand euros, which can be lowered if you are in a bad financial situation

Fine requested by AdC in final pleadings: 350,000 euros

It is also suitable for the deputy, although the prosecutor clarifies that the 2021 results are not yet out.

AdC maintains its initial position

AdC fine: 150 thousand euros

Fine requested in indictment by the deputy: less than 150 thousand euros

Fine requested by AdC in final pleadings: 150,000 euros

The fine imposed on the UCI, the lowest of this group of banks, should be reduced, according to the prosecutor.

The AdC maintains its initial position.

Initial AdC fine: 8 million (fully canceled by the leniency program)

Fine requested by the deputy in the closing arguments: less than 500,000 euros (totally canceled by the leniency program)

Fine requested by the AdC in the closing arguments: 8 million (totally canceled by the leniency program)

It was Barclays that initiated the process, denouncing the existence of information exchanges, at the end of 2012. The fine of the AdC, for its violations, was 8 million, but with total waiver, due to this leniency program. The prosecutor says that the calculation should put the fines at 500,000 euros, but, given the “conduct”, even this 500,000 euros must be reduced. In any case, this amount will not have to be paid due to leniency.

The AdC maintains its initial position.

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