The Romanian Competition Council never rings twice. Not even when abroad

This is how it all starts: with a ring at the door

We can only imagine how big the surprise must be when you find out that your Belgium-based office is being raided in an investigation by the Romanian Competition Authority. But it is a fact that the Romanian Competition Council (the "RCC") got a taste of cross-border raids.

In the past, several foreign-based companies had been subject to investigations (and some of them ultimately fined), but the investigation methods used to be milder. The foreign-based company merely received requests for information, while national companies were thoroughly inspected. Starting in early 2017, the RCC literally went beyond the frontier: with the support of national competition authorities and local police, they raided companies from Italy, the UK and Belgium in two of their currently ongoing investigations on the insurance and pharmaceuticals markets.

One may wonder: how can the RCC inspect a company located anywhere else in the EU but Romania?

First, it is sufficient for the RCC to suspect not only an infringement of Romanian competition rules, but also a breach of Articles 101 or 102 TFEU, which is the case in most of the recent largescale investigations. If this "formality" is ticked, the EU legislation itself (i.e. Regulation 1/2003) sets out the legal basis for cross-border cooperation between competition authorities. These may include raids at the offices of foreign-based entities or even private homes of individuals that are suspected of hosting relevant evidence. Inspections are decided by the RCC, although the procedural law governing the collection of evidence will be that of the host state. Accordingly, the potential targets of an inspection are offered safeguards under their own laws. On top, under the "free movement of evidence" system set up by Regulation 1/2003, in order to avoid "forum-shopping" by competition authorities, the raided company should be warranted the same safeguards and due process standards as those enjoyed by companies in Romania.

Second, the raid itself cannot be carried out by the RCC, but by the national competition authority, with the support of enforcement agents, as needed, for the account of the RCC. RCC inspectors might (and often will) be present on the spot, to assist the foreign authority, but would need the admission of the targeted company to participate in the inspection of its premises. Inspections are carried out in accordance with the national law of the Member State where the inspection or fact-finding measure actually takes place.

Documents or emails may be seized, irrespective of the language in which they are written. The inspected entity or individual may be required to have excerpts of relevant documents or correspondence translated into Romanian at a later stage, for the investigation file.

Due to the high convergence of all European competition authorities' powers, the raid should unfold in pretty much the same way across the EU, though there may be slight differences in each state.

This cross-border interaction is likely to increase even more going forward. The ECN+ Directive, [1] which is in the legislative pipeline and seeks to further empower the national competition authorities, aims to further facilitate cross-border investigations, including mutual assistance in dawn raids.

This "free movement of evidence" is not beyond criticism, as it can arguably lead to conflicts between national procedural laws and, accordingly, the fundamental rights of the raided companies may be affected.

Information exchanges between the national competition authority and the RCC follow the rules set out by Regulation 1/2003 and investigated parties benefit from specific procedural rights.

On average, an RCC investigation may take up to three years, during which the parties may be required to respond to several requests for information. They may even be subject to additional raids if there are indications of potential new breaches or if the investigation is extended against new parties.

  [1] Proposal for a Directive of the European Parliament and of the Council to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market 2017/0063 (COD)

authors: Georgiana Bădescu, Volker Weiss, Mona Banu