COBAC Regulation R-2018/02 on Calculation Methods for Penalties Applied to Non-Compliance with Injunctions

COMMISSION BANCAIRE DE L'AFRIQUE CENTRALE REGLEMENT COBAC R-2018/02 RELATIF AUX MODALITES DE CALCUL DES ASTREINTES APPLIQUEES POUR NON-RESPECT DES INJONCTIONS DE LA COMMISSION BANCAIRE DE L'AFRIQUE CENTRALE

The Central African Banking Commission, Having regard to the Convention of 16 October 1990 establishing a Central African Banking Commission and its Annex; Having regard to the Convention of 17 January 1992 harmonizing banking regulation in the Central African States and its Annex; Having regard to Regulation No. 02/14/CEMAC/UMAC/COBAC/CM of 25 April 2014 on the treatment of credit institutions in difficulty in CEMAC; Having regard to Regulation No. 01/15/CEMAC/UMAC/COBAC of 27 March 2015 on the supervision of financial holding companies and cross-border surveillance; Having regard to Regulation No. 02/15/CEMAC/UMAC/COBAC of 27 March 2015 amending and supplementing certain provisions relating to the exercise of the banking profession in CEMAC; Having regard to Regulation No. 01/17/CEMAC/UMAC/COBAC of 27 September 2017 on the conditions for exercising and controlling microfinance activities in CEMAC; Having regard to the Uniform Act GHADA relating to commercial company law and economic interest grouping; Having regard to the Uniform Act GHADA relating to cooperative company law; Meeting in ordinary session on 16 January 2018 in Libreville; DECIDES:

Article 1 - In accordance with the provisions of Article 12 of Regulation No. 02/14/CEMAC/UMAC/CGBAC/CM on the treatment of credit institutions in difficulty in CEMAC, this Regulation sets out the calculation methods for penalties (astreintes) to be applied to any subject institution that has not complied within the prescribed time limit with an injunction addressed to it by the Central African Banking Commission under the conditions set forth in Article 10 of the same Regulation. For financial holding companies, the provisions provided for in Article 12 of the aforementioned Regulation No. 02/14/CEMAC/UMAC/COBAC/CM may extend to the various subsidiaries that regularly carry out banking operations in CEMAC.

Article 2 - The provisions of this Regulation apply to:

• financial holding companies as defined by Regulation No. OI/IS/CEMAC/UMAC/COBAC of 27 March 2015 on the supervision of financial holding companies and cross-border surveillance;
• credit institutions as defined by the Annex to the Convention of 16 October 1990 establishing a Central African Banking Commission;
• microfinance institutions as defined by Regulation No. 01/17/CEMAC/UMAC/COBAC of 27 September 2017 on the conditions for exercising and controlling microfinance activities in CEMAC.

Article 3 - When COBAC decides to issue an injunction to an institution, it fixes in the same decision the amount, per day of delay, of the penalty incurred by the subject institution in case of non-compliance with the injunction after the fixed deadline. The amount of the penalty, per day of delay, is:

• 0.0025% of the Net Banking Income (NBI) of the last certified financial year for financial holding companies, without being able to be less than 1,500,000 FCFA or more than 7,500,000 FCFA;
• 0.0025% of the Net Banking Income (NBI) of the last certified financial year for credit institutions, without being able to be less than 300,000 FCFA or more than 1,500,000 FCFA;
• 0.0025% of the Net Financial Income (NFI) of the last certified financial year for microfinance institutions, without being able to be less than 30,000 FCFA or more than 750,000 FCFA. The NBI or NFI of the last financial year is that determined in the latest certified consolidated or standalone summary financial statements, as applicable.

Article 4 - In the case of an institution that has started its activities for less than one year and does not have certified summary financial statements, the amount, per day of delay, of the penalty is:

• 1,500,000 FCFA for financial holding companies;
• 300,000 FCFA for credit institutions;
• 30,000 FCFA for microfinance institutions.

Article 5 - In the case of an institution that has been exercising its activities for up to two years and does not have certified financial statements, the amount, per day of delay, of the penalty is:

• 7,500,000 FCFA for financial holding companies;
• 1,500,000 FCFA for credit institutions;
• 750,000 FCFA for microfinance institutions.

Article 6 - In case of non-compliance with the injunction after the fixed deadline, the COBAC Secretary General proceeds to liquidate and recover the penalties, for each day of delay, until COBAC takes a decision ending the application of these penalties. The Secretary General notifies the total amount of the penalty and its recovery to the institution.

Article 7 - The sums are recovered, upon application by the COBAC General Secretariat, by the National Directorate of the Bank of Central African States (BEAC), through automatic debit from the institution's account, and paid into the account of the National Credit Council of the State where the subject is located. For financial holding companies, the sums are recovered, upon application by the COBAC General Secretariat, by the National Directorate of the Bank of Central African States, through automatic debit from the account of one of its subsidiaries operating in CEMAC and paid into the account of the National Credit Council of the State where said subsidiary is located. The subsidiary in question is the one with the highest certified net income. For other institutions without an account at BEAC, the institution holding the account(s) of the defaulting institution, upon application by the COBAC General Secretariat, deducts the amount due from the account(s) and credits it to the account of the National Credit Council of the State where the subject is located. The payment may also be made by the institution to the benefit of the National Credit Council of the State where the subject is located, through any other means prescribed by the COBAC Secretary General. In this case, a notification is sent by the subject institution to the COBAC Secretary General, accompanied by any elements justifying effective payment.

Article 8 - The penalties provided for in this Regulation apply, without prejudice to the sanctions provided for by the Annex to the Convention of 17 January 1992 harmonizing banking regulation in the Central African States and by Regulation No. 02/14/CEMAC/UMAC/COBAC/CM.

Article 9 - This Regulation repeals all prior provisions contrary thereto.

Article 10 - This Regulation enters into force as of 1 April 2018.

Article 11 - The COBAC Secretary General is responsible for implementing this Regulation and notifying it to the national monetary authorities, the National Directorates of the Bank of Central African States, the professional associations of credit institutions and microfinance institutions of the Economic and Monetary Community of Central Africa (CEMAC), and to financial holding companies subject to COBAC.

Thus decided and made in Libreville on 16 January 2018, in the presence of: Mr. ABBAS MAHAMAT TOLLI, President; Ms. TOMBIDAM Denise Ingrid and EKO EKO née YECKE ENDALE Berthe, Mr. Louis ALEKA-RYBERT, BECHIR DAYE, Jean-Paul CAILLOT, Pascal FOURCAUT, Silvestre MANSIELE BIKENE, Armel Fridelin MBOULOUKOUE, Salomon Francis MEKE, Régis MOUKOUTOU and Chérubin YERADA, members.

For the Banking Commission, [Signature] ABBAS MAHAMAT TOLLI