South Africa Sets Cartel Prosecution Rules for Multinational Banks Without Local Operation

South Africa’s Constitutional Court has drawn a precise jurisdictional line governing how the Competition Commission of South Africa can pursue foreign banks and multinational firms suspected of price-fixing, even those with no physical offices, branches, or staff on South African soil.

The case arose from allegations that a group of domestic and international banks conspired to manipulate the exchange rate between the US dollar and the South African rand, in violation of South Africa’s Competition Act. The Competition Commission of South Africa (CCSA) investigated and referred the matter to the Competition Tribunal for adjudication. Several foreign banks, with no local presence whatsoever, challenged whether the tribunal held any legal authority to hear the case against them.

Two distinct jurisdictional questions were before the court. Subject-matter jurisdiction turns on whether the investigated conduct produced measurable effects within South Africa. Personal jurisdiction asks whether sufficient connecting factors exist to allow a South African court to issue a binding order against a foreign defendant.

The CCSA’s prosecution strategy rested on a broad reading of the Competition Act. The agency argued that because both foreign and local conduct formed part of a “single overarching conspiracy,” antitrust liability could attach to all participating banks regardless of where they operated. The court declined to expand the legal test as the CCSA requested.

Instead, the Constitutional Court reaffirmed the established “qualified effects test” for cross-border cases. Jurisdiction exists only when it was “foreseeable that the prohibited conduct would have a direct or immediate, and substantial, effect in South Africa.” The court rejected any attempt to extend jurisdiction to economic activity producing indirect or speculative effects in the country.

On one critical point, however, the court sided with the CCSA. Jurisdiction could be asserted where local and foreign banks had knowingly participated in a single overarching conspiracy with “adequate connecting factors sufficient to found the tribunal’s jurisdiction.” That distinction proved decisive.

Mark Thomas, a competition law specialist at Pinsent Masons, explained the practical implications. “The courts have accepted that the test for a SOC requires knowing participation in the broader conspiracy, which may be inferred from a broader pattern of conduct, and conduct that is sufficiently directed at South Africa or involving South African market participants, excluding actors that were merely present in an alleged worldwide conspiracy,” Thomas said.

The ruling allows the CCSA to move forward with prosecution against six banks before the Competition Tribunal. Its reach, though, extends well beyond this single case. Andrew Attieh, a competition law and disputes expert at Pinsent Masons, noted that the judgment “strengthens the CCSA’s ability to investigate businesses with no physical presence in South Africa and to call them to answer to the South Africa courts.”

The recognition of the single overarching conspiracy doctrine carries real operational consequences for how competition authorities construct cases against complex international cartels. Christian Peeters, an EU competition law expert at Pinsent Masons, observed that the doctrine will substantially expand enforcement capacity. “The CCSA will be better equipped to capture the economic reality of complex cartels, to prove cartels and take enforcement action, to attribute liability in complex and broad schemes, and to avoid limitation-period problems that may arise if older elements of a cartel are characterised as separate infringements,” Peeters said.

The court drew extensively on European Union precedents, linking a single continuous infringement to a common anticompetitive objective, a firm’s intentional contribution to that objective through its own conduct, and awareness or reasonable foresight that other firms would pursue the same goal. The EU framework, in other words, provided the doctrinal scaffolding for the South African ruling.

The jurisdictional debate may not be fully settled. Thomas cautioned that “the Constitutional Court left open the possibility that the argument could return in a future case, which means businesses operating outside South Africa should not assume that the jurisdictional debate has been definitively settled. In practice, most global hardcore cartels that affect South Africa will meet the qualified effects test.”

As markets grow more interconnected, the question of how far domestic enforcement powers reach into conduct occurring beyond national borders remains live and contested. For multinational businesses engaged in cross-border commercial activity, the more pressing question now is not whether South African authorities can act, but how quickly and how broadly they will choose to do so.