Law No. 2024-042/PR Repealing and Replacing Law No. 2018-034/PR of August 8, 2018 on the Statutes of the Central Bank of Mauritania

Islamic Republic of Mauritania Honour – Fraternity – Justice

Presidency of the Republic

Law No. 2024-042/PR Repealing and Replacing Law No. 2018-034/PR of August 8, 2018 on the Statutes of the Central Bank of Mauritania

The National Assembly has adopted;

The President of the Republic promulgates the law whose text follows:

TITLE I - STRUCTURE AND ORGANIZATION OF THE CENTRAL BANK CHAPTER I - GENERAL PROVISIONS

Article 1: The purpose of this law is to determine the organization, missions, objectives, powers, instruments, and operations of the Central Bank of Mauritania, established by Law No. 73-118 of May 30, 1973, hereinafter referred to as "the Central Bank".

Article 2: The Central Bank is a national public institution, endowed with legal personality and political, administrative, and financial independence.

The Central Bank is competent to exercise the missions described in this law, which it fulfills through its powers and instruments.

Article 3: In pursuing its objectives and exercising its missions, the Central Bank is independent and accountable in accordance with the provisions of this law. Unless otherwise provided by this law, neither the Central Bank, nor its bodies and members thereof, nor its staff may solicit or accept instructions from any other person or entity. The independence of the Central Bank must be respected at all times, and no person or entity may seek to influence the members of the decision-making bodies or the staff of the Central Bank in the performance of their duties or interfere in the activities of the Central Bank.

Article 4: The headquarters of the Central Bank is in Nouakchott.

The Central Bank establishes branches or agencies in Mauritania in all localities where it deems it useful. It may have correspondents or representatives wherever it deems it useful, in Mauritania or abroad.

Article 5: In the exercise of its missions, the Central Bank acts as an independent administrative authority. Appeals against its decisions in these areas fall under the jurisdiction of the Administrative Chamber of the Supreme Court.

The Central Bank is deemed a merchant in the context of its contractual relations with third parties, other than its staff. Its operations are governed by commercial legislation provisions to the extent that this law does not derogate from them.

The Central Bank's relations with its staff are governed by labor regulations and the provisions of the status referred to in point (11) of Article 47 of this law.

Article 6: The initial capital of the Central Bank is fully subscribed by the State. Its amount is fixed by law. It may be increased either by incorporating reserves through a resolution of the General Council approved by decree, or by a new endowment fully subscribed by the State, the amount of which is fixed by law.

Article 7: The Central Bank is authorized to use the slogans of the Islamic Republic of Mauritania.

CHAPTER II - THE GOVERNANCE BODIES AND INSTRUMENTS OF THE CENTRAL BANK SECTION I - DECISION-MAKING BODIES

Article 8: The decision-making bodies of the Central Bank are:

1. The General Council;
2. The Monetary Policy Council;
3. The Prudential, Resolution and Financial Stability Council;
4. The Payment, Clearing and Securities Settlement Systems Council.

SUB-SECTION I - THE GENERAL COUNCIL

Article 9: The General Council defines the general policies of the Central Bank, oversees its day-to-day management, and approves its budgets. It has the following powers in this regard:

1. It defines the general direction of the Central Bank's affairs, approves its preliminary and supplementary budgets, and ensures their proper execution;
2. It supervises the control exercised over the Central Bank;
3. It approves the Internal Regulations of the Central Bank;
4. It adopts general rules on the management of international reserves;
5. It determines the categories of assets in which the official foreign exchange reserves as well as the Central Bank's own resources may be invested;
6. It adopts regulatory texts relating to the mission of supervising the proper functioning of financial markets;
7. It adopts the accounting regime of the Central Bank in compliance with international accounting standards;
8. It approves the annual accounts of the Bank and the distribution of results in compliance with this law;
9. It approves the Central Bank's audit charter in compliance with international audit standards;
10. It appoints the members of the Audit Committee and the Sharia Compliance Committee;
11. It determines the audit standards of the Bank and, more generally, the conditions for applying Article 34 of this law;
12. It decides, upon the Governor's proposal, the creation of any internal committee it deems useful for the fulfillment of the Central Bank's missions;
13. It approves the general organization of the Central Bank and its organizational chart, including the creation, location, and closure of any branch or agency;
14. It authorizes real estate acquisitions and disposals;
15. It authorizes settlements and transactions;
16. It defines the status of personnel;
17. It approves the code of ethics and conduct to which the bodies, members of the bodies, and personnel of the Central Bank must comply, notably for the prevention and management of conflicts of interest, as well as the control measures regarding compliance with this code;
18. It approves all treaties and conventions, except for cooperation agreements within the framework of supervision missions referred to in Article 78 of this law;
19. It approves the reports, opinions, and consultations issued by the Central Bank, notably the opinions issued under Article 124 and the Central Bank's report referred to in Article 121 of this law;
20. It validates the emergency plan to ensure the security of the Central Bank's operations;
21. It defines, based on the advisory opinions of the other bodies, each regarding its own area, the conditions, procedures, and limits for granting powers of delegation and signature delegations for all areas of competence of the Central Bank.
22. It also approves the rules governing signature delegations enabling the authentication of the Central Bank's acts or its representation towards third parties, without prejudice to compliance with the rules governing competence regarding the adoption of said acts;
23. It appoints an external Auditor responsible for verifying the Central Bank's accounts.

The General Council may, on certain subjects, request the opinion of the other bodies of the Central Bank or any other advisory council.

Article 10: In addition to the ex officio members, namely the Governor, who chairs it, and the Deputy Governor designated by the Governor, the General Council comprises five (5) other members.

Article 11: The General Council meets once every two (2) months upon convocation by its President. It may meet, whenever necessary, at the initiative of its President or when two (2) members request it.

SUB-SECTION II - MONETARY POLICY COUNCIL

Article 12: The Monetary Policy Council is responsible for defining the framework of the Central Bank's monetary policy, whose primary objective is price stability to promote sustainable long-term maximum growth. It has the following powers in this regard:

1. It adopts regulatory texts taken in implementation of Chapter II of Title II of this law;
2. It ensures supervision of compliance with the Central Bank's policy framework in the monetary domain;
3. Based on high-quality analyses of macroeconomic and financial developments as well as accurate forecasts, it takes appropriate monetary policy decisions;
4. It establishes the standards and general conditions for the Central Bank's operations and determines the interest rates and commissions to be applied;
5. It specifies the procedures for intervention regarding refinancing instruments, notably the procedures for purchase or sale, lending or borrowing, discounting, pledging, taking or placing receivables or other assets in repo, and issuing interest-bearing or commission-bearing bills, as well as the nature and extent of guarantees for loans granted by the Central Bank;
6. It specifies the procedures for intervention regarding Islamic refinancing instruments, after obtaining the opinion of the Sharia Compliance Committee;
7. It conducts, if it deems necessary, consultations with the Ministry of Finance for better monetary policy efficiency and to reduce negative impacts on the economy and financial system from external shocks.
8. It may give its opinion to the General Council if needed.

Article 13: In addition to the ex officio members, namely the Governor, who chairs it, and the Deputy Governor designated by the Governor, the Monetary Policy Council comprises five (5) other members.

Article 14: The Monetary Policy Council meets once every two months upon convocation by its President. It may meet, whenever necessary, at the initiative of its President or when a majority of its members request it.

SUB-SECTION III - PRUDENTIAL, RESOLUTION AND FINANCIAL STABILITY COUNCIL

Article 15: The Prudential, Resolution and Financial Stability Council is the competent body for adopting legal acts regarding the supervision of credit institutions and other financial establishments, their resolution and eventual liquidation, and contributing to financial stability, in order to promote a solid, competitive, and accessible financial system as well as stable financial markets through the supervision and regulation of the banking and financial systems. It has, in this regard, notably the following powers:

1. It ensures comprehensive and effective supervision of the entire national financial system, whose entities are subject to a legal supervisory status providing an obligation of approval or authorization;
2. It adopts regulatory acts in the field of supervision and resolution for which the Central Bank has received a general or specific legal mandate under current legislation;
3. It adopts individual acts regarding entities subject to the control and supervision of the Central Bank, consisting notably of: a) Granting, modifying, and withdrawing approval or authorization; b) Decisions regarding prior authorizations granted by the Central Bank; c) Imposing recovery measures and penalties; d) Adopting resolution measures and any act required in this regard; e) Any measure aimed at preventing and resolving difficulties of entities subject to the control and supervision of the Central Bank; f) Imposing administrative sanctions; g) Opening a forced liquidation procedure and any decision adopted within such a procedure; h) Any decision concerning required opinions in case of dissolution and liquidation, even judicial, referred to in Book II, Title I, Chapter VIII of the Commercial Code;
4. It approves the annual inspection program;
5. It ensures permanent supervision of the financial system's stability and determines the measures to be adopted and implemented by the Central Bank to strengthen the financial system's stability;
6. It takes decisions on financial assistance referred to in point (2) of Article 90 of this law;
7. It determines, by way of recommendations, the measures that relevant national authorities should implement to contribute to the stability of the financial system as a whole, in accordance with the provisions of Chapter VIII of Title II of this law;
8. It oversees the implementation of sound risk management practices, robust internal controls, active boards of directors, and supervision and accountability of executive bodies.
9. It defines both the rules intended to ensure the protection of the clientele of entities subject to the Central Bank's control and the adequacy of the procedures and means they implement for this purpose,
10. It defines rules to limit the impact of bank failures on financial stability
11. It approves crisis prevention measures, notably an annual preventive recovery plan, mandatory for each entity subject to the Central Bank's control.
12. It approves the resolution plan prepared by the Central Bank concerning each of the entities under its control.
13. It encourages the improvement of information disclosure, accounting standards, risk measurement, and overall market transparency.
14. It gives its opinion to the General Council if needed.

Article 16: In addition to the ex officio members, namely the Governor, who chairs it, and the Deputy Governor designated by the Governor, the Prudential, Resolution and Financial Stability Council comprises 5 other members.

Article 17: The Prudential, Resolution and Financial Stability Council meets at least once every two months upon convocation by its President. It may meet, whenever necessary, at the initiative of its President or when a majority of its members request it.

SUB-SECTION IV - PAYMENT, CLEARING AND SECURITIES SETTLEMENT SYSTEMS COUNCIL

Article 18: The Payment, Clearing and Securities Settlement Systems Council is responsible, while respecting the overall stability of the financial system, to:

• Authorize, suspend, or prohibit a payment, clearing, or securities settlement system;
• Regulate payment, clearing, or securities settlement systems;
• Promote the efficiency of payment systems;
• Ensure the security and stability of payment systems;
• Control risk in the financial system related to payment systems;
• Promote competition in the payment services market;
• Identify and designate payment, clearing, or securities settlement systems subject to its regulation;
• Determine participation rules for any payment, clearing, or securities settlement system, including participant access rules;
• Establish security and efficiency standards for payment, clearing, or securities settlement systems, including technical requirements, procedures, performance criteria, and pricing;
• Define participant access standards or regimes;
• Collect any information deemed useful from a payment system or from individual participants.

Article 19: In addition to the ex officio members, namely the Governor, who chairs it, and the Deputy Governor designated by the Governor, the Payment, Clearing and Securities Settlement Systems Council comprises 5 other members.

Article 20: The Payment, Clearing and Securities Settlement Systems Council meets once per quarter, upon convocation by its President. It may meet, whenever necessary, at the initiative of its President or when a majority of its members request it.

SUB-SECTION V - COMMON RULES FOR MEMBERS OF DECISION-MAKING BODIES

Article 21: Council members are appointed by decree of the President of the Republic for a five (5) year term, renewable only once.

Council members are chosen based on their integrity, independence, academic qualifications, and expertise in relevant fields such as economics, finance, law, management sciences, and accounting. The overall composition of each Council ensures a balance of the various technical skills required.

A replacement member must be appointed at least one month before the expiration of their term.

Council members exercise their functions personally and cannot delegate their authority to anyone.

Article 22: Members of the bodies must enjoy their civil and political rights and provide all guarantees of morality and honor.

No one may serve as a member of a body at the Central Bank:

1. If they have been convicted of: felony, money laundering, breach of trust, fraud, corruption, theft and misappropriation of assets, forgery, participation in a criminal association, drug trafficking, pimping, bankruptcy, usury, tax fraud, and more generally, if they have been sentenced to a penalty likely to seriously impair their honor and the reputation of the Central Bank;
2. If they are members of the Government or hold a parliamentary, regional, or municipal mandate.
3. If they are staff members of the Central Bank;
4. If they exercise any function, paid or unpaid, with a credit institution, insurance company, or other establishment falling under the Central Bank's supervision missions;
5. If they hold a participation or interests in such companies, without respecting the provisions of Article 23 below;

The occurrence of such incompatibility grounds constitutes a legitimate cause for dismissal.

An exception is made to the incompatibility referred to in point (4) of the first paragraph in the event of designation by the Central Bank within the framework of recovery or resolution measures or a liquidation procedure against such companies, or when the Central Bank would be a shareholder.

Article 23: During their terms, it is prohibited for body members to take or receive (except by inheritance) any participation or interest whatsoever in any enterprise subject to the Central Bank's supervision. They may only retain such participations and/or similar interests acquired before entering their functions if they declare them in advance to the General Council and demonstrate that any operation related to them is conducted at market conditions.

Article 24: Body members exercise their functions with full independence. They cannot solicit or accept instructions from any other person or entity. They cannot suffer any career or other detriment due to the opinions or views they are required to express in the performance of their duties.

Article 25: The allowances of Council members are fixed by decree of the President of the Republic, upon proposal of the General Council after opinion of the Remuneration Committee. They are borne by the Central Bank and cannot be reduced during the term.

Article 26: Council members can only be relieved of their functions by decree of the President of the Republic, excluding the concerned member if applicable, under the following circumstances:

1. The occurrence of one of the incompatibilities provided for in Article 22 of this law;
2. Serious breach of provisions of applicable national regulations, notably the provisions of Articles 23 and 24 of this law;
3. Gross professional misconduct in the exercise of their functions;
4. Two (2) successive and unjustified absences from meetings of the body of which they are a member.

Claims for compensation in case of unjustified dismissal of Council members are brought before the competent courts.

Article 27: No Council may meet without the presence of the Governor or the Deputy Governor designated by him for said Council.

The agenda for each body's meeting is set by its competent President. The inclusion of an item is a right if a member requests it.

The validity of Council deliberations is subject to the presence of a simple majority of members.

The bodies deliberate with full independence.

Decisions are taken at the end of deliberations by consensus and, failing that, by a simple majority of votes cast. In case of a tie, the President's vote is decisive.

A secretariat designated by the Governor from among the senior management staff of the Central Bank ensures the drafting and preservation of minutes recording all debates that took place during the meetings.

SECTION II - CONTROL BODIES AND INSTRUMENTS

SUB-SECTION I - SHARIA COMPLIANCE COMMITTEE

Article 28: The Sharia Compliance Committee is competent to rule on the compliance of banking and financial products, operations, and activities with Sharia prescriptions. It has the following powers in this regard:

1. It conducts all studies and gives its opinion on questions regarding the application of Sharia in Islamic finance and Islamic financial operations that the Central Bank intends to undertake;
2. It conducts all studies and gives its opinion on the compliance with Sharia prescriptions of the activities of Islamic banks and all other institutions approved or authorized by the Central Bank to conduct Islamic operations;
3. In terms of Sharia compliance, it is the only body authorized to validate Islamic financial products.

The Sharia Compliance Committee is seized by one of the decision-making bodies of the Central Bank.

Article 29: The Sharia Compliance