23.9.2016   

EN

Official Journal of the European Union

C 348/14

(1)

The Decision relates to seven bilateral infringements. The addressees of this Decision participated in one or more separate infringements of Article 101 of the Treaty and Article 53 of the EEA Agreement.

(2)

The object of each of the infringements was the restriction and/or distortion of competition in relation to Japanese Yen Interest Rate Derivatives (hereinafter referred to as ‘Yen Interest Rate Derivatives’ or ‘YIRDs’), referenced to the Japanese Yen LIBOR (hereinafter referred to as ‘JPY LIBOR’), and in the case of one of the infringements, also YIRDs referenced to the Euroyen TIBOR.

(3)

The JPY LIBOR and Euroyen TIBOR are important reference interest rates for many financial instruments denominated in Japanese Yen. The JPY LIBOR is set by the British Bankers Association (BBA) and the Euroyen TIBOR is set by the Japanese Bankers Association (JBA). The rates are set daily for different tenors (loan maturities) on the basis of submissions from banks that are members of the JPY LIBOR and Euroyen TIBOR panels. These banks are asked to submit each business day, before a certain time, estimates of interest rates at which they believe they could borrow unsecured funds in a reasonable market size on the London interbank money market (in the case of JPY LIBOR) or estimates of what they believe to be prevailing market rates for transactions between prime banks on the Japan offshore market (in the case of Euroyen TIBOR) for various tenors. The BBA and JBA then calculate, on the basis of an average of these submissions, while excluding the 4 (in the BBA's case) and 2 (in the JBA's case) highest and lowest submissions, the daily JPY LIBOR and Euroyen TIBOR rates for each tenor. The resulting rates are immediately published and available to the public each business day.

(4)

JPY LIBOR and Euroyen TIBOR rates are, inter alia, reflected in the pricing of YIRDs, which are globally traded financial products used by corporations, financial institutions, hedge funds, and other undertakings to manage their interest rate risk exposure (hedging, for both borrowers and investors) or for speculation purposes.

(5)

The most common YIRDs are: (i) forward rate agreements, (ii) interest rate swaps, (iii) interest rate options, and, (iv) interest rate futures. YIRDs may be traded over the counter or, in the case of interest rate futures, exchange traded.

(6)

This Decision is addressed to (hereinafter ‘the addressees’):

(7)

The case was opened on the basis of an immunity application by UBS on 17 December 2010. On 20 April 2011, the Commission sent requests for information to a number of undertakings active in the YIRD sector. On […], Citigroup submitted an application for immunity and or leniency. On […], Deutsche Bank applied for a reduction of fines. On […], RP Martin applied for a reduction of fines. On […], RBS applied for a reduction of fines.

(8)

On 12 February 2013, the Commission initiated proceedings pursuant to Article 11(6) of Regulation (EC) No 1/2003 against UBS, RBS, Deutsche Bank, Citigroup, JPMorgan, RP Martin and on 29 October 2013 against ICAP.

(9)

Settlement meetings with the addressees of the present decision took place and subsequently the settling parties submitted to the Commission their formal requests to settle pursuant to Article 10a(2) of Regulation (EC) No 773/2004 (2), solely for the purpose of reaching a settlement with the Commission in the present proceeding and without prejudice to any other proceedings (the ‘settlement submissions’).

(10)

On 29 October 2013, the Commission adopted a Statement of Objections addressed to UBS, RBS, Deutsche Bank, Citigroup, JPMorgan and RP Martin, all of which confirmed that it reflected the contents of their settlement submissions and that they remained committed to following the settlement procedure. The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 29 November 2013 and the Commission adopted the Decision on 4 December 2013.

(11)

In this case, the Commission has identified the following seven bilateral infringements distinct and separate from one another and the duration of the undertakings' involvement in each of the infringements is as follows:

(12)

ICAP is not an addressee of the Decision, which is based on matters of fact as accepted only by the addressees of this Decision. Therefore, the Decision does not establish any liability of ICAP for any participation in an infringement of EU competition law in this case (3).

(13)

The parties (banks) to the respective infringements engaged in the following anticompetitive practices:

(14)

In the UBS/DB 2008-09 infringement UBS and Deutsche Bank, in order to facilitate the anticompetitive practices described in above, also explored the possibility of executing trades designed to align their YIRD trading interests, and may on a few occasions have entered into such trades.

(15)

RP Martin facilitated the UBS/DB 2008-09 infringement in the period from 29 June 2009 until 10 August 2009, whereby at the request of UBS, RP Martin promised to, and at least on a few occasions did, contact a number of JPY LIBOR panel banks that did not participate in the infringement, with the aim of influencing their JPY LIBOR submissions. Deutsche Bank was not aware of this circumstance.

(16)

[…].

(17)

[…].

(18)

[…].

(19)

[…].

(20)

The geographic scope of each of the seven infringements and for all the respective participants therein covered the entire EEA.

(21)

The Decision applies the 2006 Guidelines on Fines (4). The Commission imposes fines on the undertakings to which this Decision is addressed.

(22)

The basic amount of the fine to be imposed on UBS, JPMorgan, RBS, Citigroup and Deutsche Bank is to be set by reference to the value of sales, the fact that each of the seven infringements is, by its very nature, among the most harmful restrictions of competition, the duration and geographic scope of each of the seven infringements, the fact that the collusive activities related to financial benchmarks and an additional amount to deter undertakings from entering into such illegal practices.

(23)

The Commission normally takes the sales made by the undertakings during the last full business year of their participation in the infringement (5). It may however depart from this practice, should another reference period be more appropriate in view of the characteristics of the case (6).

(24)

With respect to each of the seven infringements, the Commission calculates the annual value of sales for UBS, JPMorgan, RBS, Citigroup and Deutsche Bank, on the basis of the cash received on the products covered by the respective infringements from EEA counterparties in the months covered by the respective infringements, which are subsequently annualized. In the case of UBS the amounts calculated on this basis are reduced by an appropriate factor to take account of the partial temporal overlaps of some infringements, which otherwise relate to the same product and geographic scope. Similarly, in the case of Citigroup, the amounts calculated are reduced for the same reasons.

(25)

These values of sales are discounted by a uniform factor to take account of the particularities of the YIRD industry, such as the netting inherent in this industry, meaning that banks both sell and buy derivatives so that the incoming payments are netted against outgoing payments.

(26)

The Guidelines on fines provide only limited guidance on the calculation of the fines which can be imposed on facilitators like RP Martin. As a result, the basic amount for RP Martin is determined in accordance with the requirements of Regulation (EC) No 1/2003, the case-law and paragraph 37 of the 2006 Guidelines on fines, reflecting the gravity, duration and nature of its involvement (as a facilitator), as well as the need to ensure that fines have a sufficiently deterrent effect.

(27)

The Commission does not apply any aggravating circumstances.

(28)

The Commission takes Deutsche Bank's lack of awareness of […] possible participation and RP Martin's participation as facilitators in the UBS/DB 2008-09 infringement and […] possible participation in the Citi/DB 2010 infringement, as described above, as a mitigating circumstance. Therefore, the fine to be imposed on Deutsche Bank for each of these infringements is reduced by 10 %.

(29)

Similarly, the Commission takes RBS's lack of awareness of […] possible participation as a facilitator in the UBS/RBS 2007 and UBS/RBS 2008 infringements, as described above, as a mitigating circumstance. Therefore, the fine to be imposed on RBS for each of these infringements is reduced by 10 %.

(30)

Finally, the Commission similarly takes UBS's lack of awareness of […] possible participation as a facilitator in the Citi/UBS 2010 infringement, as described above, as a mitigating circumstance. Therefore, the fine to be imposed on UBS for this infringement is reduced by 10 %.

(31)

Article 23(2) of Regulation (EC) No 1/2003 provides that the fine imposed on each undertaking for each infringement shall not exceed 10 % of its total turnover relating to the business year preceding the date of the Commission decision.

(32)

In this case, none of the fines exceed 10 % of an undertaking's total turnover relating to the business year preceding the date of this Decision.

(33)

The Commission granted full immunity from fines to UBS for each of the infringements in which it participated. The Commission also granted immunity from fines to Citigroup for the Citi/DB 2010 infringement.

(34)

For their cooperation in the investigation, the Commission also granted the following reductions of fines:

(35)

As a result of the application of the Settlement Notice, the amount of the fines to be imposed on UBS, RBS, Deutsche Bank, Citigroup, JPMorgan, and RP Martin is reduced by 10 % and this reduction is added to their leniency reward.

(36)

The following fines are imposed pursuant to Article 23(2) of Regulation (EC) No 1/2003:

UBS/JPM 2007 infringement

UBS/RBS 2007 infringement

UBS/RBS 2008 infringement

UBS/DB 2008-09 infringement

Citi/RBS 2010 infringement

Citi/DB 2010 infringement

Citi/UBS 2010 infringement