Financial Supervision Authority

 

DLB/DLB_WL1/7060/4/3/2016/KZ

 

Warsaw, 6^th December 2016

 

DECISION

In accordance with Article 48l section 2 of the Banking Law dated 29 August 1997 (Journal of Laws from 2015, position 128 with further amendments) and Article 104 § 1 of the Code of administrative procedure (Journal of Laws from 2016, position 23 with further amendments) in connection with Article 11 section 5 of the Act on Financial Market Supervision (Journal of Laws from 2016, position 174 with further amendments),

as a result of receipt from the competent authorities of the Grand Duchy of Luxembourg – under procedure set out in Article 48l section 1 of Banking Law dated 29 August 1997 – notification of intention of the credit institution China Construction Bank (Europe) S.A. to launch business activity on the Polish territory through the Branch, Financial Supervisory Authority

sets out the following conditions of conducting such activity

1. Without prejudice to the information obligation indicated in Article 48o of the Banking Law, China Construction Bank (Europe) S.A. in respect of rendering of the banking activities on the Polish territory through the Branch, is obliged to inform the client, before concluding an agreement with a client (in any case not later than while submitting an offer) in a clear and unambiguous way (confirmed by the client), on:

1) the fact that China Construction Bank (Europe) S.A. is an institution established as a result of the license granted by the relevant supervision authority of the country of origin and has its head quarter in the Member State, carrying out its business activity on the Polish territory through the Branch, supervised by the Luxemburg supervisory authority’s and not supervised by KNF, without prejudice to Article 141a of Banking Law;

2) the place and methods of storing the funds, including applied protection measures;

3) rules of cash desk service, allowing for withdrawal of funds at client’s request or with lapse of specified time;

4) contact details that will allow the clients to stay in direct - physical contact with the Branch;

5) methods of guaranteeing deposits by China Construction Bank (Europe) S.A., covering in particular:

1. a) guaranteeing institution (name, address, website);
2. b) amount constituting maximum amount of the guarantee as well as limits and deductions;
3. c) information on who will be entitled to receive financial benefits;
4. d) procedure of raising claims related to guaranteeing deposits (including required documents, terms of filing them, address for correspondence, language in which correspondence should be concluded, terms of payment);

6) place and methods used by China Construction Bank (Europe) S.A. regarding storing and processing information constituting banking secrecy as defined by Banking Law and relevant regulations binding under law of Luxembourg in respect of ways of protection and making available of such information;

7) content of this decision issued by KNF;

8) possibility of requesting of other information, as mentioned in condition 2.

 

2. Regardless of information to be submitted under condition 1, China Construction Bank (Europe) S.A. in connection with providing banking services on the Polish territory through the Branch, is obliged (at the request of the client and not later than at the time of making an offer), in clear and unambiguous way, confirmed by the client, to inform the client on:

1) legal regulations regarding China Construction Bank (Europe) S.A. and it’s Branch in Poland, as well as the way this regulations can be accessed by the client;

2) codes of good practices, adopted in China Construction Bank (Europe) S.A. and the place of its publication.

 

3. China Construction Bank (Europe) S.A. while conducting business activity on the Polish territory through the Branch is obliged to ensure that marketing and advertising messages are not misleading the clients as to information listed in conditions 1, 2 and 6.

 

4. China Construction Bank (Europe) S.A. should make available all information listed in conditions 1 and 2 to the client and the client should be able to become acquainted with such information, in particular:

1) in a place where the service is to be rendered;

2) in a place where the agreement has been concluded;

3) on its website;

4) in the information documents delivered to the client;

5. In order to comply with the condition no 4, China Construction Bank (Europe) S.A. shall ensure that in the materials presenting its Branch’s offer on the Polish territory, including websites, information mentioned in condition 1 point 1) and 4) letter a) and b), is presented in a form of letters and signs not smaller and not less legible than the biggest and most legible letters and signs used for presentation of the offer.
6. China Construction Bank (Europe) S.A. shall make publicly available in Polish language texts of its financial statements right after their approval, as well as information on all supervisory actions taken against this credit institution by the competent authorities in the country where it has its headquarter – within the same scope as it is under the law of country of its headquarter.
7. In case of conducting simultaneously (with the Branch) on the Polish territory a cross border activity – pursuant to the freedom of services, China Construction Bank (Europe) S.A. shall ensure that the offer regarding services to be rendered on cross-border basis will be separate from the offer of the Branch. In particular, China Construction Bank (Europe) S.A. will not include in the materials presenting offer of the Branch on the Polish territory information on services which may be rendered on the cross-border basis; in addition, the Bank shall also ensure that the Branch will not act as an agent or intermediary in relation to cross-border services and it will not promote or advertise such services.
8. While conducting its business activity on the Polish territory through the Branch, China Construction Bank (Europe) S.A. shall introduce high standards of client’s identification, covering, in particular, verification of client’s identity and refusal to render services in case of impossibility of such verification.
9. China Construction Bank (Europe) S.A. while conducting its business activity on the Polish territory through the Branch, will refrain from using of the potential competitive business advantage on the field of banking services in Poland, created as a result of use of non-market based mechanisms, in particular – as a result of non-compliance with rules of banking activity stemming from binding provisions of law as well as supervisory recommendations.
10. China Construction Bank (Europe) S.A. while conducting its business activity on the Polish territory through the Branch, will ensure that all lawsuits filed to the court in respect of agreements concluded with clients will be considered by the Polish courts under the same terms as lawsuits filed in relation to the agreements concluded by domestic banks.
11. China Construction Bank (Europe) S.A. while conducting its business activity on the Polish territory through the Branch, will comply with KNF indications and suggestions regarding conducting the business activity by the Branch in compliance with the interest of the general good, in particular concerning protection of consumers goods, ensuring the safety of business operations, as well as prevention of law infringements and increase of systemic risk in financial sector.

 

GROUNDS FOR DECISION

On 10^th October 2016 Financial Supervision Authority received a notification concerning the intention of establishing a branch in Poland by the credit institution China Construction Bank (Europe) S.A. According to the presented information, the Branch of China Construction Bank (Europe) S.A. intends to conduct activity on the Polish territory in the following fields:

• collecting cash deposits and other repayable funds,
• granting credits including consumer credit, mortgage, factoring with or without recourse, financing of commercial transactions (including forfeiting),
• provision of payment services as defined in Article 4 point 3 of Directive of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market,
• granting and confirming guarantees and liabilities,
• trading for own account or for account of clients in:
  1. money market instruments (cheques, bills, certificates of deposit, etc.)
  2. foreign exchange,
  3. exchange and interest-rate instruments,
• preparing opinions regarding the borrowers.

Pursuant to Article 48l section 2 of Banking Law, within two months from the day of receipt of the information referred to in Article 48l section 1 of Banking Law, concerning the notification of the intention to conduct activity on the Polish territory in the form of branch, the Financial Supervision Authority may indicate the conditions which, for public benefit, in particular in order to protect consumers’ interests, ensure safety of economic trading or prevent infringements of the law, the branch of a credit institution must meet when carrying on activity in the territory of the Republic of Poland.

The conditions that are indicated in this decision aim at protecting the interests of consumers of banking services in Poland, in particular the interests’ of clients of China Construction Bank’s (Europe) S.A. branch, in particular by ensuring:

• that the clients are provided with the information on the activity of the branch of China Construction Bank’s (Europe) S.A. in the territory of the Republic of Poland, including the information on facts relevant from the point of view of safety of the deposits collected by the branch,
• appropriate standards of the branch’s activity regarding the separation of the services offered by the branch from the services to be rendered on cross-border basis - pursuant to the freedom of services, as well as by ensuring high standards of identification and verification of client’s identity,
• elimination of systemic risk within banking services sector, which could originate in regulatory arbitrage performed by China Construction Bank (Europe) S.A.

 

For this reason the Financial Supervision Authority has decided as indicated in the operative part of the decision.

LETTER OF RIGHTS

The Party that is not satisfied with this decision, is entitled to, pursuant to Article 127 § 3 of the Code of administrative procedure, in connection with Article 11 section 3 of the Act on Financial Market Supervision, address the Financial Supervision Authority with the request for reconsideration of the case. Pursuant to Article 129 § 2 in connection with Article 127 § 3 in fine of the code of administrative procedure, the request for reconsideration of the case must be submitted within 14 days from the date of service of this decision to the Party.