An ongoing row between Ukraine's Antimonopoly Committee and U.S.-based Western Union Financial Services, which is suspected by local regulators of operating as a monopoly, has taken on a strange twist.
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Antimonopoly Committee head Oleksiy Kostusev was quoted by Interfax-Ukraine on Nov. 9 as saying that Western Union had liquidated its representative office in Ukraine.
“The committee has been informed that the representative office in Ukraine has been liquidated,” Kostusev said, adding that his committee would be forced to hold ongoing talks connected with the firm’s investigation with the U.S. offices of the Western Union group (Western Union Financial Services Inc). But that’s not entirely so, said Peter Hnatiuk, regional director of the representative office of Western Union Financial Services GmBH, which coordinates marketing activities and provides technical support for the Western Union group in Ukraine.
“The representative office is open,” Hnatiuk told the Post on Nov. 10. “The information in the press is inaccurate; the representative office is open, and will continue to be open,” Hnatiuk said. He added that the representative office of the Western Union group in Ukraine is not involved in the Antimonopoly Committee investigation; the investigation revolves around the central company within the group, which is U.S.-based Western Union Financial Services Inc., Hnatiuk said.
Antimonopoly Committee officials were unavailable for comment as the Post went to press.
Antimonopoly officials initiated a probe into Western Union in March on the grounds that the company may have been abusing its monopoly position on the market to keep the cost of wire transfer services artificially high. The committee called upon Western Union to reduce rates for transfers between Ukraine and other countries, or face fines.
For $100 transfers between Ukraine and most other countries, Western Union typically charges about $15. The company, however, reduced this fee for transfers between Russia and Ukraine in early September to $6; transfers of $200 now cost $9.
At the time, Kostusev, who attributed the tariff reduction to his committee’s work, vowed that he would persuade Western Union to lower rates for money transfers made to Ukraine from other countries, too, or face hefty fines. Ukrainian legislation allows the committee to fine violators for up to 10 percent of their turnover.
Hnatiuk told the Post in September that Western Union reduced tariffs between Ukraine and Russian for business strategy reasons, not into response to pressure from Ukrainian regulators.
Kostusev has alleged that Western Union controls 85 percent of the market, transferring about $2 million in and out of Ukraine daily.
The committee also suspects Western Union of using its monopoly status to hinder other operators from entering Ukraine’s money transfer market.
