Regulation No. 03 – CEMAC-UMAC-CM of December 21, 2016 on Payment Systems, Means and Incidents

COMMUNITY OF ECONOMIC AND MONETARY STATES OF CENTRAL AFRICA

CENTRAL AFRICAN MONETARY UNION

MINISTERIAL COMMITTEE

REGULATION NO. 03 /CEMAC/UMAC/CM ON PAYMENT SYSTEMS, MEANS AND INCIDENTS

THE MINISTERIAL COMMITTEE,

Having regard to the Treaty establishing the Community of Economic and Monetary States of Central Africa (CEMAC) dated March 16, 1994 and its Addendum of July 5, 1996 on the Community's Institutional and Legal System,

Having regard to the Convention of July 5, 1996 governing the Economic Union of Central Africa (UEAC),

Having regard to the Convention of July 5, 1996 governing the Monetary Union of Central Africa (UMAC),

Having regard to the Convention of October 16, 1990 establishing the Central African Banking Commission (COBAC),

Having regard to the Convention of January 17, 1992 on the harmonization of banking regulations in the Central African States,

Considering the need to promote the economic and social development of CEMAC member states through the harmonization of legislation on payment systems and means,

Considering that existing payment systems in CEMAC member states are ill-suited to the efficiency, speed, and security constraints inherent in participating in an open, globalized world economic system,

Considering the low banking penetration rate among populations of CEMAC member states,

Considering public distrust toward written payment instruments, particularly checks, and the resulting drawbacks for all concerned economic partners,

Considering that it is appropriate to maintain the main rules from the Geneva Conventions of June 7, 1930 (governing bills of exchange and promissory notes) and March 19, 1931 (governing checks), but that it is nevertheless necessary to amend certain provisions to adapt them to the economic and social realities of CEMAC member states,

Considering the opportunity and necessity of establishing fundamental rules to promote, regulate, and foster modern written payment means, particularly transfers, direct debits, payment cards, and electronic money,

Recalling the mission entrusted to the Central Bank to propose, in the interest of general economic and social development, while safeguarding the legitimate interests of various economic actors, harmonized legal and organizational foundations for:

• The establishment and operation of modern, efficient, fast, and secure payment systems compliant with international norms and standards;

• The promotion and security of payment means;

• The prevention, centralization, and enforcement regarding payment incidents.

Considering recent technological developments, notably the automation of payment systems and the planned introduction within the Central Payment Incident Registry of biometric identification for clients of regulated establishments, to strengthen the regulatory and supervisory framework for payment systems and means;

Considering the need to revise certain provisions of Regulation No. 02/03/CEMAC/UMAC/CM of April 3, 2003 on payment systems, means and incidents to strengthen the regulatory and supervisory framework for payment means and systems;

Considering that these objectives and orientations are particularly suited to the situation of CEMAC countries,

Having received the conforming opinion of the BEAC Board of Directors delivered during its session on November 22, 2016,

On the proposal of the BEAC Governor,

In its session on December 21, 2016,

ADOPTS THE REGULATION OF WHICH THE CONTENT FOLLOWS:

---

FIRST PART: GENERAL PROVISIONS

CHAPTER I: DEFINITIONS CHAPTER II: OBJECT AND SCOPE OF APPLICATION CHAPTER III: OBLIGATION TO PAY BY WRITTEN MEANS CHAPTER IV: RIGHT TO AN ACCOUNT

SECOND PART: PAYMENT MEANS

TITLE I: THE CHECK CHAPTER I: CREATION AND FORM OF THE CHECK CHAPTER II: TRANSMISSION CHAPTER III: GUARANTEE (AVAL) CHAPTER IV: PRESENTATION AND PAYMENT CHAPTER V: BARRED CHECKS CHAPTER VI: RECOVERY IN CASE OF NON-PAYMENT CHAPTER VII: ALTERATIONS CHAPTER VIII: STATUTE OF LIMITATIONS CHAPTER IX: PROTESTS CHAPTER X: DIVERSE PROVISIONS

TITLE II: BILL OF EXCHANGE CHAPTER I: CREATION AND FORM OF THE BILL OF EXCHANGE CHAPTER II: PROVISION CHAPTER III: ENDORSEMENT CHAPTER IV: ACCEPTANCE CHAPTER V: GUARANTEE (AVAL) CHAPTER VI: MATURITY CHAPTER VII: PAYMENT CHAPTER VIII: RECOVERY IN CASE OF NON-ACCEPTANCE AND NON-PAYMENT, PROTESTS, EXCHANGE CHAPTER IX: INTERVENTION CHAPTER X: PLURALITY OF COPIES AND DUPLICATES CHAPTER XI: ALTERATIONS CHAPTER XII: STATUTE OF LIMITATIONS CHAPTER XIII: DEADLINES

TITLE III: PROMISSORY NOTE

TITLE IV: PAYMENT CARD CHAPTER I: DEFINITION CHAPTER II: OBLIGATIONS OF THE ISSUER, HOLDER AND BENEFICIARY

TITLE V: TRANSFER AND DIRECT DEBIT CHAPTER I: ON THE TRANSFER CHAPTER II: ON THE DIRECT DEBIT

TITLE VI: ELECTRONIC MONEY

THIRD PART: PREVENTION AND CENTRALIZATION OF PAYMENT INCIDENTS

TITLE I: PROHIBITION ON USING PAYMENT MEANS CHAPTER I: BANKING PROHIBITION CHAPTER II: JUDICIAL PROHIBITION

TITLE II: CENTRALIZATION OF PAYMENT INCIDENTS CHAPTER I: REGIONAL FILES CHAPTER II: ROLE OF THE CENTRAL BANK CHAPTER III: ROLE OF REGULATED ESTABLISHMENTS CHAPTER IV: ROLE OF THE PROSECUTOR'S OFFICE

FOURTH PART: ENFORCEMENT OF PAYMENT INCIDENTS

TITLE I: OFFENSES REGARDING CHECKS TITLE II: OTHER OFFENSES REGARDING PAYMENT MEANS TITLE III: SPECIFIC SANCTIONS FOR REGULATED ESTABLISHMENTS

FIFTH PART: PAYMENT SYSTEMS AND INTERBANK GUARANTEES

TITLE I: INTERBANK PAYMENT SYSTEMS TITLE II: INTERBANK GUARANTEES TITLE III: INFRINGEMENTS ON PAYMENT SYSTEMS

SIXTH PART: TRANSITIONAL AND FINAL PROVISIONS

---

FIRST PART: GENERAL PROVISIONS

CHAPTER I: DEFINITIONS

Article 1 (new). For the purposes of this Regulation:

"Monetary Authority": The minister responsible for currency and credit in the State;

"Central Bank" or "BEAC": The Bank of Central African States;

"COBAC": The Central African Banking Commission;

"Community" or "CEMAC": The Community of Economic and Monetary States of Central Africa;

"Personal Data": Any information relating to an identified or identifiable natural person, directly or indirectly, particularly by reference to an identification number or one or more elements specific to their civil status and physical and biometric identity;

"Regulated Establishments": Entities that issue or accept payment means. These include:

• credit institutions as defined by the Convention of January 17, 1992 on the harmonization of banking regulation in Central African States;

• microfinance institutions as defined by Regulation No. 01/02/CEMAC/UMAC/COBAC/CM of April 13, 2002 on the conditions for exercising and supervising microfinance activities in CEMAC;

• the Public Treasury and postal check services, subject to specificities linked to their status;

• other approved establishments.

"CFA Franc": The Franc of Financial Cooperation in Central Africa;

"Payment Incident": Refusal by a regulated establishment to honor any payment means due to lack or insufficiency of funds;

"Payment Means": Instrument enabling any person to transfer funds by crediting the settled amount to a debit account opened in the books of a regulated establishment. Payment means notably include: checks, bills of exchange, promissory notes, transfers, direct debits, payment cards, and electronic money;

"Interbank Payment System" or "Payment System": Any national or international procedure organizing relations between at least two participants, enabling the habitual execution of transfer orders, with or without clearing;

"Monetary Union" or "UMAC": The Monetary Union of Central Africa.

CHAPTER II: OBJECT AND SCOPE OF APPLICATION

Article 2 (new). This Regulation aims to establish rules regarding the use of payment means, the handling of payment incidents, and the organization of payment systems within CEMAC.

It applies to the Central Bank, regulated establishments, and users of payment means.

CHAPTER III: OBLIGATION TO PAY BY WRITTEN MEANS

Article 3 (new). Any payment exceeding 500,000 CFA Francs or intended to settle a debt greater than this amount in installments must be made by a payment means that records the settled amount as a debit to an account held in the name of the payer at a regulated establishment.

Payment of wages and salaries is subject to the same conditions beyond an amount set by the Monetary Authority.

Article 4. The amount mentioned in Article 3 above is increased to 1,000,000 CFA Francs when the payment occurs between non-merchant private individuals.

Article 5. Violation of Articles 3 and 4 above is subject to a fine equal to 5% of the amounts improperly paid in cash.

Article 6 (new). Any refusal to accept a payment by written means is subject to a fine equal to 5% of the amount of the refused payment.

CHAPTER IV: RIGHT TO AN ACCOUNT

Article 7. Any natural or legal person domiciled in a CEMAC member state and lacking a deposit account has the right to open such an account at a regulated establishment of their choice.

In case of established refusal by at least three chosen establishments, the person may petition the Central Bank to designate a regulated establishment that is obliged to open the deposit account and ensure, on this account, at minimum basic services related to counter deposits, withdrawals, transfers, processing direct debit notices, and receiving any other withdrawal forms.

The preceding paragraph applies when the applicant receives three successive refusals from only their local regulated establishment.

Any decision to close such an account initiated by the account holder takes effect no earlier than 60 calendar days after written and reasoned notification of the decision is communicated to the client and the Central Bank for information.

The provisions of this article also apply to banking or judicial prohibitions.

Article 8. The applicable operating tariff conditions for deposit accounts under the right-to-account regime are those of standard deposit accounts.

Article 9. The request to open a deposit account may be made in writing.

A requested regulated establishment opposing this request is obliged to issue a written refusal notice or communicate it by registered letter with acknowledgment of receipt. The credit institution is not obliged to justify its refusal notice.

Article 10 (new). Any account opening results in a written account agreement between the regulated establishment and its client. The account agreement sets out the mutual obligations of the regulated establishment and its client.

Upon opening the account, the client, co-holder, or authorized representative provides the regulated establishment with their personal data under the conditions set forth in Article 226 of this Regulation. They may obtain communication of their personal data and request rectification where applicable.

Article 11 (new). Opening a deposit account entitles the account holder to receive withdrawal slips.

The regulated establishment may provide the account holder with check forms, payment cards, or any other payment means.

SECOND PART: PAYMENT MEANS

Article 12 (new). The payment means subject to this Regulation are those listed in Article 1.

The regulated establishment is obliged to inform, by any means leaving a written record, any person to whom it issues a payment means of the conditions for its use and the sanctions incurred in case of abusive or fraudulent use.

TITLE I: THE CHECK

CHAPTER I: CREATION AND FORM OF THE CHECK

Article 13. The check contains:

• The denomination "check", inserted in the text of the instrument and expressed in the language used for its drafting;

• The unconditional order to pay a determined sum;

• The name of the person who must pay, referred to as the drawee;

• The indication of the place where payment must be made;

• The indication of the date and place of creation of the check;

• The signature of the person issuing the check, referred to as the drawer.

Article 14. An instrument missing one of the statements indicated in the preceding article does not qualify as a check, except in cases determined by the following paragraphs: In the absence of special indication, the place indicated next to the drawee's name is deemed the place of payment. If several places are indicated next to the drawee's name, the check is payable at the first place indicated; In the absence of these or any other indication, the check is payable at the place where the drawee has its principal establishment. A check without indication of its place of creation is considered drawn in the place indicated next to the drawer's name.

Article 15. A check may only be drawn on a regulated establishment or any other entity authorized to be the drawee, and which at the time of creation has sufficient funds available to the drawer in accordance with an express or tacit agreement, under which the drawer has the right to dispose of these funds by check.

The provision must be provided by the drawer or by the person on whose behalf the check is drawn, without the drawer acting for another party ceasing to be personally liable to endorsers and the holder.

The drawer alone is obliged to prove, in case of denial, that those on whom the check was drawn had provision at the time of creation; otherwise, they are obliged to guarantee it even if the protest is made after the fixed deadlines.

Instruments drawn and payable in one of the CEMAC member states in the form of checks on any other person than those in the first paragraph are not valid as checks.

Article 16. A check cannot be subject to acceptance. An acceptance notation on the check is deemed unwritten.

Nevertheless, the drawee has the option to initial/visa the check, with the visa serving to confirm the existence of provision on the date it is given.

Article 17. A check may be stipulated payable: to a named person, with or without express "to order" clause; to a named person, with the "non-to-order" or equivalent clause; to bearer.

A check for a named person with the "to bearer" mention or equivalent term qualifies as a bearer's check.

A check without indication of the beneficiary qualifies as a bearer's check.

Article 18. A check may be to the order of the drawer themselves.

A check may be drawn for the account of a third party.

A check cannot be drawn on the drawer themselves, except where it concerns a check drawn between different establishments of the same drawer and provided that such check is not to bearer.

Article 19. Any interest stipulation inserted in the check is deemed unwritten.

Article 20. A check may be payable at the domicile of a third party, either in the locality where the drawee has their domicile or in another locality, provided that the third party is an establishment authorized to be the drawee.

This domiciliation may not be made against the holder's will.

Article 21. A check whose amount is written both in words and figures qualifies, in case of discrepancy, for the sum written in words.

A check whose amount is written multiple times, either in words or figures, qualifies, in case of discrepancy, for the lesser sum.

Article 22. If a check bears signatures of persons incapable of being bound by checks, false signatures, or signatures of imaginary persons, or signatures that for any other reason cannot bind the persons who signed the check, or on whose behalf it was signed, the obligations of other signatories remain valid.

Article 23. Anyone who appends their signature on a check as representative of a person for whom they lacked authority is personally bound by the check and, if they pay, has the same rights as the purported represented person. The same applies to a representative who exceeded their powers.

Article 24. The drawer is liable for payment. Any clause by which the drawer exempts themselves from this guarantee is deemed unwritten.

Article 25. Any check for which corresponding provision exists available to the drawer must be certified by the drawee if requested by the drawer or holder, except for the drawee's option to replace it with a check issued under the conditions of Article 18, paragraph 3.

The certified check's provision remains, under the drawee's responsibility, blocked for the benefit of the holder until the presentation deadline fixed by Article 43.

Certification results from the application on the check by the drawee of a formula comprising, in addition to their signature, mentions regarding certification and its date, the amount for which the check was established, and the designation of the drawee establishment. These mentions must be applied using a marking or printing process offering full security guarantees.

Article 26. Any person submitting a check as payment must justify their identity by means of a valid official document bearing their photograph.

CHAPTER II: TRANSMISSION

Article 27. A check stipulated payable to a named person with or without express "to order" clause is transferable by endorsement.

A check stipulated payable to a named person with the "non-to-order" or equivalent clause is transferable only in the form and with the effects of an ordinary assignment.

Article 28. Endorsement may be made even in favor of the drawer or any other obligor. These persons may re-endorse the check.

Article 29. Endorsement must be unconditional. Any condition to which it is subject is deemed unwritten.

Partial endorsement is null.

Endorsement by the drawee is also null.

Bearer endorsement qualifies as a blank endorsement.

Endorsement by the drawee qualifies only as a receipt, except where the drawee has multiple establishments and the endorsement is made for the benefit of an establishment other than that on which the check was drawn.

Article 30. Endorsement must be inscribed on the check or on an attached sheet called an allonge (continuation sheet). It must be signed by the endorser. The signature is applied either manually or by any non-manual process.

Endorsement may not designate the beneficiary or consist simply of the endorser's signature, constituting a blank endorsement. In this latter case, for validity, the endorsement must be inscribed on the back of the check or on the allonge.

Article 31. Endorsement transmits all rights resulting from the check and notably the ownership of the provision.

If the endorsement is blank, the holder may:

• Fill in the blank, either with their name or that of another person;

• Re-endorse the check in blank, or to another person;

• Deliver the check to a third party without filling the blank and endorsing it.

Article 32. The endorser is, unless otherwise stated, liable for payment.

They may prohibit a new endorsement; in this case, they are not liable to persons to whom the check is subsequently endorsed.

Article 33. The holder of an endorsable check is considered a legitimate holder if they justify their right by an uninterrupted series of endorsements, even if the last endorsement is blank. Crossed-out endorsements are, for this purpose, deemed unwritten. When a blank endorsement is followed by another endorsement, the signatory of the latter is deemed to have acquired the check by the blank endorsement.

Article 34. An endorsement appearing on a bearer's check renders the endorser liable under the provisions governing recourse; it does not convert the instrument into a to-order check.

Article 35. When a person has been dispossessed of a to-order check by any event, the beneficiary who justifies their right as indicated in Article 33 is only obliged to relinquish the check if they acquired it in bad faith or, upon acquiring it, committed a gross fault.

Article 36. Persons sued under the check cannot oppose the holder exceptions based on their personal relations with the drawer or prior holders, unless the holder, upon acquiring the check, acted knowingly to the detriment of the debtor.

Article 37. When endorsement contains the mention "value in collection", "for collection", "by proxy" or any other mention implying a simple mandate, the holder may exercise all rights arising from the check, but they may only endorse it as proxy.

Obligors may, in this case, invoke against the holder only exceptions that would be opposable to the endorser.

The mandate contained in a proxy endorsement does not terminate upon the death of the principal or the occurrence of their incapacity.

Article 38. Endorsement made after protest or after the expiration of the presentation deadline produces only the effects of an ordinary assignment.

Unless proven otherwise, a dateless endorsement is presumed to have been made before protest or before the expiration of the deadline mentioned in the preceding paragraph.

Antedating orders is prohibited under penalty of forgery.

CHAPTER III: GUARANTEE (AVAL)

Article 39. Payment of a check may be guaranteed for all or part of its amount by an aval (guarantee).

This guarantee is provided by a third party, except the drawee, or even by a signatory of the check.

Article 40. The aval is given either on the check or on an allonge, or by a separate act indicating the place where it occurred.

It is expressed by the words "good for aval" or any equivalent formula; it is signed by the giver of the aval with indication of their name and address.

It is considered to result from the sole signature of the giver of the aval applied on the face of the check, except when it concerns the drawer's signature.

Article 41. The giver of the aval is bound in the same manner as the person for whom they stood guarantor.

Their engagement is valid, even if the guaranteed obligation is null for any cause other than a formal defect.

When they pay the check, the giver of the aval acquires the rights resulting from the check against the guaranteed party and against those who are bound to the latter under the check.

CHAPTER IV: PRESENTATION AND PAYMENT

Article 4