Central Bank Ordinance (AB 1991 no. GT 32)

Central Bank Ordinance (AB 1991 no. GT 32)

Amendments: AB 1998 no. 17 (Inwtr. AB 1998 no. 26); AB 2009 no. 75; AB 2014 no. 5;

CHAPTER I General Provisions

Article 1 This Land Ordinance understands by: the Bank: the Central Bank of Aruba; the Land: the legal entity Aruba; the Minister: the Minister of Finance; credit institutions: enterprises or institutions established in Aruba that largely conduct their business by accepting funds and/or granting credits, with the exception of credit unions; credit institution: an enterprise or institution as referred to in Article 1, first paragraph, of the Land Ordinance on supervision of the credit sector.

Article 2

1. There is in Aruba a bank, named Central Bank of Aruba; it may be referred to in legal transactions as the Central Bank.
2. The Bank is a legal entity.

CHAPTER II Means of the Bank

Article 3

1. The capital of the Bank amounts to Afl. 10,000,000.=.
2. The capital is obtained from the assets assigned to the Bank on the basis of Articles 8, second paragraph, and 10 of the Mutual Regulation on Estate Division Bank of the Netherlands Antilles.
3. The value of the assets of the Bank, referred to in the second paragraph, is determined for the first time by the Board of Commissioners on the proposal of the President of the Bank.
4. The assets of the Bank are subsequently periodically revalued by the President according to the rules set by the Board of Commissioners.

Article 4

1. The Bank forms a reserve fund up to an amount of Afl. 10,000,000,- to cover losses of the Bank.
2. The Bank is authorized, with the approval of the Minister, to increase this amount, provided that this increase does not cause the sum of the capital of the Bank and the reserve fund to rise to more than 15% of the liabilities of the Bank, according to the situation at the end of the preceding financial year.

Article 5 The Bank is authorized, with the approval of the Minister, to form earmarked reserves.

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Article 6

1. The Bank is authorized to invest its capital and reserves according to rules to be established by the Board of Commissioners on the proposal of the management.
2. The results obtained from the aforementioned investments are included in the profit and loss account of the Bank.

CHAPTER III Tasks and Powers of the Bank

Article 7

1. The Bank is a circulation bank. As such, it is exclusively entitled to issue banknotes in Aruba. It manages the circulation of money in Aruba, insofar as this consists of banknotes, and it is responsible on behalf of the Land for putting coin notes and coins into circulation.
2. The banknotes have, as long as they have not been declared out of circulation, the status of legal tender.
3. The paper type, dimensions, and printing of the banknotes to be issued are determined by the management, in consultation with the Board of Commissioners, and made known to the general public.
4. In case of loss, total or partial destruction, or damage to banknotes, the Bank is not required to provide compensation.
5. In case of suspicion of a criminal offense or upon written request of an interested party, the Bank is free to demand discharge and receipt of the banknotes from the person who offers them for payment or exchange.
6. Articles 296, second and third paragraphs, 297, and 298 of the Commercial Code of Aruba do not apply to banknotes.

Article 8

1. The Bank can declare banknotes out of circulation. Holders of banknotes are then summoned to offer them for exchange. The summons is made known in the journal in which official government notices are published.
2. After the expiration of ten years from the placing of the summons referred to in the first paragraph, the amount of banknotes not offered for exchange is added to the profit of the current financial year. The banknotes subsequently offered for exchange are charged to the profit and loss account.
3. After the expiration of thirty years from the placing of the summons referred to in the first paragraph, the right to demand exchange of the relevant banknotes expires.

Article 9

1. Regarding the limitation of the total amount of issued banknotes and other immediately payable obligations of the Bank, instructions are given by Land Decree, containing general measures, after hearing the management and the Board of Commissioners.
2. In the Land Decree referred to in the first paragraph, the Minister may be granted the authority to temporarily lower the percentage of the coverage of the Bank's obligations to a minimum mentioned in that Land Decree, in extraordinary circumstances, on the proposal of the Board of Commissioners and the management.

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Article 10

1. The Bank is responsible for the stability of the value of the currency of Aruba and determines the monetary policy, aimed at maintaining it.
2. The Bank provides the Minister, requested and unrequested, with advice regarding financial matters.

Article 11

1. The Bank exercises supervision on the following enterprises and institutions according to rules to be established by or pursuant to Land Ordinance: a. credit institutions, credit unions, and other enterprises and institutions that conduct their business by attracting nominally payable funds from the public, or by commercially granting credits to the public; b. insurers; c. money transaction companies; d. corporate pension funds; e. trust offices; f. other financial and non-financial enterprises and institutions, and professionals to be designated by Land Ordinance.
2. The Bank promotes a financially sound and honest development of the enterprises and institutions referred to in the first paragraph.

Article 12

1. The Bank is the central foreign exchange bank for Aruba and regulates, as such, according to rules to be determined by Land Ordinance, the payment traffic with foreign countries. It has the management of the available foreign exchange and the control over the expenditure thereof.
2. The Bank may, under conditions to be established by it, authorize credit institutions to act as foreign exchange banks.
3. The Bank is authorized to establish rates for foreign exchange traffic, taking into account the value of the Aruban currency and the relevant international agreements in which Aruba is involved.

Article 13 The Bank is furthermore authorized to carry out the following activities: a. discounting bills of exchange and other commercial paper with two or more jointly liable parties and having a maturity of no longer than six months, as well as treasury paper on account of the Land with a maturity of no longer than six months; b. buying, selling, and issuing bills of exchange and checks, as well as fulfilling written or telegraphic payment orders; c. receiving funds in custody, deposit, or current account; d. buying and selling: I. bills accepted by a credit institution established in Aruba and treasury paper on account of the Land, with no longer remaining maturity than six months, as well as discounting thereof; II. coins and coin material;

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III. bonds issued by public law and private law legal entities established in Aruba; IV. debt certificates whose interest and repayment are guaranteed by the Land; V. claims under mortgage of real estate located in Aruba, or the rights to which these are subject, as well as granting funds under said mortgage and up to no higher amount than eighty percent of the estimated value of these goods; e. taking into custody coins, coin material, or money-equivalent papers; f. granting advances by way of pledge or in current account on collateral of securities, claims, goods, cells, coins, and coin material; g. issuing guarantees within the exercise of its task; h. investing its foreign currency in foreign government paper, bank acceptances, or debt instruments of foreign credit institutions, or depositing its foreign currency with foreign credit institutions; i. granting capital to enterprises in the field of agriculture, livestock, fishing, and industry against commercial security; j. other activities assigned to the Bank by or pursuant to Land Ordinance.

Article 14

1. The Bank is the banker of the Land and as such is accountable to the Minister and accountable to the General Audit Office. It performs its services free of charge.
2. The Bank may be charged by Land Decree with the cashiering of institutions established by Land Ordinance. It also performs these services free of charge.
3. The Bank is also charged with the free custody of all money-equivalent values and securities for the benefit of the Land and the institutions referred to in the second paragraph.
4. The Bank may appoint credit institutions as its agents in order to provide services to third parties on its behalf.

Article 15

1. The Bank may grant advances to the Land to provide for temporary cash needs resulting from seasonal differences between the revenues and expenditures of the Land during the budget year, provided that these advances, at any time, do not exceed ten percent of the revenues of the Land in the preceding budget year.
2. The advances referred to in the first paragraph are granted by the Bank interest-free.

Article 16

1. Unless otherwise provided in Article 15, the Bank does not grant credit or blank advances. Credit or blank advance does not refer to entrusting money or goods to agents who are not employed by the Bank in its own interest.
2. The Bank does not buy securities, unless otherwise provided in Article 6, first paragraph, and Article 13, part h, and does not buy goods other than those required for the exercise of its business, or in cases where the purchase of goods is necessary to prevent loss.
3. The Bank does not participate in enterprises.
4. The Bank does not advance money on collateral of vessels or aircraft.

Article 16a

1. The Bank, its President, Directors, Board of Commissioners, and staff are not liable for damage caused in the normal exercise of their tasks and powers under or pursuant to this or other Land Ordinances, unless the damage is due to intent or conscious recklessness.
2. The limitation of liability referred to in the first paragraph applies mutatis mutandis to third parties who exercise tasks and powers on behalf of or in the name of the Bank, or of the organs and persons mentioned in the first paragraph.
3. The Bank reimburses all reasonably incurred costs and expenses of the organs and persons referred to in the first paragraph, and the third parties referred to in the second paragraph, which result from a judicial procedure that is a consequence of the tasks and powers exercised or to be exercised by these organs, persons, or third parties in accordance with this or another Land Ordinance, unless the procedure shows that there was intent or conscious recklessness by these organs, persons, or third parties.

CHAPTER IV Management of the Bank

Article 17

1. The leadership of the Bank lies with a President, assisted by one or two Directors.
2. In the absence or vacancy of the President, his function is performed by the Director designated by the President for this purpose, failing which this designation is made by the Chairman of the Board of Commissioners.
3. The President represents the Bank in his capacity as the highest official of the Bank in and out of court.

Article 18

1. The President and the Director(s) are appointed by the Governor from a nomination of three persons, drawn up by the Board of Commissioners. The Governor will take into account the nomination insofar as it appears useful to him.
2. On the proposal of the Board of Commissioners, the President and the Director(s) may be suspended or dismissed by the Governor by Land Decree with reasons. In case of suspension, the Board of Commissioners shall, as necessary, also make a nomination of three persons for the temporary filling of the respective function.
3. The employment conditions of the President and the Director(s) are laid down in a regulation, which is established by the Board of Commissioners after consultation with the Minister.

Article 19

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1. The President determines the policy and conducts the management of the Bank in the broadest sense of the word; he is responsible for the management of the Bank's assets and is authorized to perform all acts of disposal over these assets, insofar as this authority is not restricted by or pursuant to this Land Ordinance.
2. One of the Directors is designated as Secretary of the Bank and is responsible as such for the implementation of the policy regarding the Bank's assets, the administration, and the care for the secretariat.
3. By Land Decree, containing general measures, general guidelines for the performance of the tasks of the President and the Director(s) may be given, after hearing the President and the Director(s) and the Board of Commissioners.

Article 20

1. The Bank is authorized to hire and dismiss personnel under employment contracts according to civil law.
2. The employment conditions of the Bank's personnel are laid down in a regulation, which is established by the Board of Commissioners and the President after consultation with the Minister.

Article 21

1. The Bank provides pension provisions for the President, the Director(s), and personnel.
2. The contributions for pension and the further rules regarding pension provision are laid down in a regulation, which is established by the Board of Commissioners and the President after consultation with the Minister.

Article 22 The President is authorized, after consultation with the Board of Commissioners, to convene representatives of credit institutions in a meeting chaired by him as an advisory committee, in order to provide information and advice to the President, the Director(s), and the Board of Commissioners on subjects on which these wish to know the opinion of the committee.

Article 23

1. There is a Board of Commissioners, consisting of at least three and at most five members.
2. The Chairman of the Board of Commissioners is the Government Commissioner. He is appointed and dismissed by the Governor.
3. The other members of the Board of Commissioners are appointed by the Governor from a nomination of three persons for each of them, drawn up by the Board of Commissioners after consultation with the President and the Director(s).
4. The appointment of the commissioners referred to in the preceding paragraph is for a period of five years. They are immediately reappointable upon their retirement.
5. In special cases, the commissioners referred to in the third paragraph may be suspended or dismissed prematurely by the Governor by Land Decree with reasons.

Article 24

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1. The Board of Commissioners exercises supervision on the actions of the Bank and monitors the management of the Bank's assets as well as the means entrusted to it.
2. Everything not explicitly assigned by or pursuant to this Land Ordinance to the President or the Director(s) belongs to the task of the Board of Commissioners.
3. By Land Decree, containing general measures, rules may be established regarding the performance of the tasks of the Board of Commissioners.

Article 25

1. The Board of Commissioners meets at least once per quarter and otherwise as often as the Chairman or two members of the Board or the President deem necessary or desirable.
2. In the meetings of the Board of Commissioners, the President reports, upon request, on the general economic and financial development of Aruba and on the policy, management, and administration conducted by the Bank.

Article 26

1. The commissioners receive a fee, which is established by the Minister after consultation with them and the President.
2. The expenses resulting from the preceding paragraph are charged to the Bank.

Article 27

1. The Government Commissioner exercises supervision on the actions of the Bank on behalf of the Land and acts in accordance with a general or specific instruction given by the Minister.
2. The Government Commissioner has the right to attend the meetings of the management of the Bank and to cast an advisory vote there as necessary.
3. The President and the Director(s) are obliged to provide the Government Commissioner, upon request, with all information and to submit the books, documents, and other data carriers which he deems necessary for the proper exercise of his task.

Article 28

1. The commissioners, the President, and the Director(s) must have reached the age of thirty years upon appointment, possess the experience and capabilities required for the respective function, and have their residence in Aruba.
2. Persons who are active in or have interests in trust offices and credit institutions established in Aruba cannot simultaneously be active in one of the functions mentioned in the first paragraph.
3. Between the commissioners themselves, between them and the President and the Director(s), as well as between the President and the Director(s) themselves, there may be no blood or marital relationship up to the second degree. Spouses may not simultaneously appear in one of the aforementioned capacities at the Bank. If a marital relationship arises after their appointment, the aforementioned officials may not continue their work at the Bank without the permission of the Minister.

Article 29

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1. The commissioners, the President, and the Director(s) take the oath or promise in the hands of the Governor upon accepting their appointment, whereby they commit themselves to confidentiality regarding that of which they become aware by virtue of their function, insofar as disclosure thereof is not prescribed by or pursuant to Land Ordinance.
2. The confidentiality obligation of the other personnel will be laid down in the personnel regulation referred to in Article 20, second paragraph.

CHAPTER V Budget, Balance Sheet, and Profit and Loss Account

Article 30

1. The financial year of the Bank runs from January 1 to and including December 31 of the following year.
2. Annually, before December 1, the President submits a budget of the Bank's expenditures for the next financial year to the Board of Commissioners for approval. After the budget is approved, it is submitted to the Minister and to the States for information.

Article 31

1. Annually, before July 1, the balance sheet and the profit and loss account of the past financial year are compiled by the President and the Director(s) and, after control by an external accountant appointed by the Board of Commissioners, are submitted to the Board of Commissioners for establishment.
2. The changes in value of the gold and foreign exchange reserves and the business assets of the Bank occurring during a financial year, except those regarding the assets in which the capital and the reserves mentioned in Articles 4 and 5 are invested, are expressed on the liability side of the balance sheet; they are not involved in the composition of the profit and loss account.
3. In their first subsequent meeting, the annual statements referred to in the first paragraph are established by the Board of Commissioners; a copy is sent to the Minister. If the Board of Commissioners has objections to the annual statements submitted to it, it submits these objections to the Governor for decision after consultation with the President and the Director(s).
4. The establishment of the annual statements serves as discharge for the President and the Director(s).

Article 32 The President makes a statement of a shortened balance sheet once per month in the journal in which official government notices are published.

Article 33

1. Any profit appearing from an approved annual profit and loss account first benefits the capital, insofar as it is less than the amount determined in Article 3, first paragraph, and subsequently the general reserve, insofar as it is less than the amount determined by or pursuant to Article 4. The remainder benefits, unless Article 5 applies, the Land.
2. Any loss appearing from an approved annual profit and loss account is charged to the general reserve. In case this reserve is insufficient to cover the loss entirely, the remainder is charged to the capital of the Bank.
3. The Bank is authorized to grant advances to the Land from the profit achieved in the current financial year, provided that: a. the number of advances to be granted in any financial year may not exceed two; b. no advance may exceed 25% of the amount that benefited the Land in the preceding financial year according to the second sentence of the first paragraph, or - if this did not happen - no more than 25% of the profit achieved in the preceding financial year; c. no advance may exceed 50% of the profit achieved up to the time of request

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