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Fibank won its third case against the Romanian APIA

In Romania, was heard the case between First Investment Bank and the Romanian Agency for Payments and Intervention in Agriculture (APIA). The Romanian court dismissed all objections and claims made by APIA and ruled in favor of Fibank. From the information publicly disclosed by the Romanian court, it becomes clear that it canceled all enforcement actions taken up to date by APIA against First Investment Bank, including the actions taken by enforcement agents. APIA was also ordered to pay the litigation costs.

The BGNES Agency sought the comments of leading lawyers to explain the implications of this decision, since APIA had seized a Fibank account with the BNB at a time when the lawsuit in Romania had not yet ended. According to their expert opinion, the decision of the Romanian judicial authorities should prevail, and this decision should be mandatory for the Bulgarian authorities that needed to implement it. Ending the dispute in Romania in favor of First Investment Bank also means terminating any action against the bank. So far, Fibank has won two other court cases in Romania.

The story began back in 2012, when APIA itself selected the Bulgarian company VM Corporation EOOD as a contractor for the execution of two public procurement contracts for delivery of food products. As the selected contractor was required to provide bank guarantees, Fibank then issued 3 bank guarantees in favor of APIA, the expressly agreed condition being that the funds owed in advance to the contractor by APIA should only be transferred to the account of VM Corporation EOOD with First Investment Bank. This is common banking practice, as it enables the bank having issued the guarantees to exercise strict ongoing control over the spending of funds and performance of obligations. Instead of transferring the funds owed to VM Corporation EOOD to the company’s account with Fibank, however, APIA transferred them to another bank account outside Bulgaria, from where the money disappeared without a trace. This oversight on the part of the Romanian agency led to APIA's claims on the guarantees issued by Fibank. First Investment Bank, in its turn, duly alerted the investigative bodies of OLAF, the National Anti-Corruption Agency to the Prosecutor's Office of the Republic of Romania, SANS and the Specialized Prosecutor's Office in Bulgaria. High-ranking officials of the Romanian agency APIA were even detained in connection with the case.


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