Instruction No. 001/2020-CSBF on Exceptional Due Diligence Measures for Customer Identification When Opening a Special Electronic Money Account

BANKY FOIBEN'I MADAGASIKARA

COMMISSION DE SUPERVISION BANCAIRE ET FINANCIERE

INSTRUCTION NO. 001/2020-CSBF ON EXCEPTIONAL DUE DILIGENCE MEASURES FOR CUSTOMER IDENTIFICATION WHEN OPENING A SPECIAL ELECTRONIC MONEY ACCOUNT

The Commission de Supervision Bancaire et Financière (CSBF),

Having regard to Law No. 2016-056 of February 2, 2017, on electronic money and electronic money institutions, known as the Electronic Money Law,

Having regard to Law No. 95-030 of February 22, 1996, relating to the activity and supervision of credit institutions, as amended, known as the Banking Law,

Having regard to Law No. 2017-026 of February 8, 2018, on microfinance,

Having regard to Law No. 2018-043 of February 13, 2019, on the fight against money laundering and terrorist financing,

Having regard to Decree No. 2020-359 of March 21, 2020, proclaiming a state of health emergency throughout the territory of the Republic, and Decrees No. 2020-370, 2020-457, and 2020-483 of April 4, May 2, and May 16, 2020, extending the duration of the state of health emergency throughout the territory of the Republic,

Having regard to Instruction No. 001/2018-CSBF of April 12, 2018, relating to the exercise of electronic money activities by credit institutions;

DECIDES

Article 1: Purpose

The purpose of this Instruction is to specify the due diligence measures regarding customer identification related to the opening and use of services attached to the special electronic money account, defined in Article 3 below, by disadvantaged populations affected by the state of health emergency proclaimed by the aforementioned decrees.

The opening of a special account may be done remotely or otherwise, according to the procedures specified in Article 4 of this Instruction, and the use of the associated services is carried out within the limits defined in Article 5 and specified by the Annex to this Instruction.

Article 2: Scope of Application

This Instruction applies to electronic money institutions, designated as EME, and credit institutions exercising electronic money activities, designated as EC, and their distribution agent networks. It covers a period of six (6) months from its date of entry into force.

Its provisions apply to the opening of a special account as well as to the electronic money services available from said special accounts, namely:

• The funding of electronic money;
• The withdrawal of cash from emergency social benefits, notably within the framework of the Malagasy State's response to the state of health emergency;
• The national transfer of electronic money;
• The storage of electronic money.

A natural person may only open one special electronic money account.

Article 3: Definitions

For the purposes of this Instruction, the following terms are understood as:

• special electronic money account: any electronic money account opened by disadvantaged populations during the period covered by this Instruction;
• disadvantaged populations: adult natural persons with legal capacity affected by the state of health emergency and unable to provide the identification documents normally required by the due diligence measures prescribed by the aforementioned law on the fight against money laundering and terrorist financing;
• remote account opening: the subscription process by which the establishment of the relationship between users and EMEs or ECs, directly or through their distribution agents, is carried out by any means of communication, without the physical presence of both parties.

Article 4: Due Diligence Measures During the Opening of a Special Account

For the opening of a special account, the obligations of identification and verification of identity shall be considered fulfilled by EMEs and ECs upon obtaining and retaining the following information elements:

• surname;
• first name(s);
• age or date of birth;
• address;
• mobile phone line number duly registered with a licensed mobile telephone operator;
• profession.

The list of supporting documents that may be used to fulfill identification measures is expanded to include the following documents, which are considered probative: birth certificate, national identity card, driver's license, student card, army card, statistical card, tax card, kara-pokontany (local community card), voter card, letter from the head of a religious authority formalized at the regional or national level, identification card issued by agencies responsible for distributing social aid, documents which, collectively, allow for the verification of the person's identity, and generally any other document recognized by a local, regional, or national administration allowing for the acquisition of the information elements listed in the preceding paragraph.

A client already holding an electronic money account may be indicated as a reference person attesting to the missing information elements or those not mentioned in the probative documents provided by a new client.

In the case of remote account opening and regardless of the electronic money medium, EMEs and ECs must make available to their clients tools allowing them to:

• provide information elements regarding their identity;
• confirm their request to open an account.

Article 5: Fraud Prevention and Limitation of Transactions on Special Accounts

EME and ECs are required to put in place fraud prevention measures during the subscription of the special account.

In the event of discovered fraud or inaccuracy of the information provided, the EME or EC must terminate the business relationship.

The amounts of transactions within the framework of the electronic money services listed in Article 2 above are limited according to the table in the Annex to this Instruction.

Article 6: Formalization and Approval of Due Diligence Measures

EME and ECs must have written and updated procedures in place regarding customer identification for the subscription of special accounts, which must be submitted to the General Secretariat of the CSBF for prior approval within a period of two (2) weeks before the launch of any subscription.

Article 7: Reporting Obligations

EME and ECs must communicate monthly to the General Secretariat of the CSBF, before the 15th of the following month:

• the number of subscription requests received, distinguishing those made remotely;
• the list of users whose subscription requests were rejected, indicating their name, identity document number, and domicile, along with the reasons for rejection;
• the due diligence measures taken regarding AML/CFT for special accounts opened remotely;
• suspicious transaction reports concerning any incident related to the use of special accounts, such as fraud or abnormal transaction flows relative to the information collected on the client's situation.

The aforementioned documents are transmitted to the General Secretariat of the CSBF via the tele-declaration system using the predefined models. A copy of these documents is sent to SAMIFIN.

Article 8: Sanctions

In the event of infringement of the provisions of this Instruction, the CSBF imposes against:

• the EME, one or more of the sanctions provided for in Articles 108 to 111 of the Electronic Money Law,
• the EC, one or more of the sanctions stipulated in Articles 49 and 52 of the Banking Law.

Article 9: Regularization of Special Account Status

At the end of the aforementioned covered period, EME and ECs have a period of six (6) months to regularize the opened special accounts and perform the due diligence measures prescribed by the current regulations on the fight against money laundering and terrorist financing, namely the verification:

• of the client's identity by checking a national identity card or any original official document serving as such, currently valid and containing a photograph, of which a copy is taken;
• of the client's professional and residential address by checking any document capable of proving it.

In the absence of regularization within this period, the EME or EC is required to limit the electronic money services that can be offered to the concerned clients to withdrawal operations only.

The limits provided for in the Annex to this Instruction are maintained for these reduced services.

Article 10: Final Provisions

Any complementary application modalities of this Instruction are fixed by circular of the President.

This Instruction enters into force upon its notification to the profession via the Professional Association and its publication on the website of Banky Foiben'i Madagasikara.

The Annex forms an integral part of this Instruction.

Done in Antananarivo, on MAY 19, 2020 For the Commission de Supervision Bancaire et Financière The President,

(Signature) Henri Edmond RABARIJOHN Governor of Banky Foiben'i Madagasikara

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ANNEX

LIMITS OF TRANSACTIONS ON SPECIAL ELECTRONIC MONEY ACCOUNTS

Type of Subscription	Operations Covered	Max Weekly Limit in Ariary	Max Monthly Limit in Ariary
Remote Subscription (electronic form filling without physical presence + remote confirmation of account opening request)	Deposit	50,000	200,000
	Withdrawal	50,000	200,000
	National Transfer	50,000	200,000
Subscription with Physical Presence (form filling + presentation of a copy of CIN or one of the documents listed in Article 4, paragraph 2)	Deposit	100,000	400,000
	Withdrawal	100,000	400,000
	National Transfer	100,000	400,000