UNION OF THE COMOROS

Unity - Solidarity - Development

President of the Union Moroni, July 02, 2020

DECREE N°20-D9A/PR

Promulgating Law N°20-005/AU of June 23, 2020, on Payment Services and Payment Service Providers.

THE PRESIDENT OF THE UNION,

HAVING REGARD TO the Constitution of the Union of the Comoros of December 23, 2001, revised by referendum on July 30, 2018, particularly Article 64;

DECREES:

ARTICLE 1: Law N°20-005/AU on Payment Services and Payment Service Providers, adopted on June 23, 2020, by the Assembly of the Union of the Comoros, is promulgated, the text of which follows:

<< Title I: Object of the law, scope of application and definitions

Article 1: This law aims to establish the rules relating to payment services and payment service providers, including payment services offered by means of electronic money.

Article 2: This law applies to payment service provisions, electronic money institutions, and payment institutions whose status is defined in Chapter One of Title V, as well as by the agents of electronic money issuers and payment institutions.

Article 3: This law does not apply to payment services intended solely for acquiring goods or services within a private acceptance network. A private acceptance network constitutes an enterprise or group of enterprises belonging to the same brand that offers a payment service for the acquisition within its premises of a limited range of products or services.

This law does not apply to payment services rendered by a parent company to its subsidiaries or by a subsidiary to its parent company or between subsidiaries of the same parent company without a payment service provider other than an enterprise of the same group acting as an intermediary.

This law does not apply to payment services rendered within the framework of a payment system governed by Articles 6 to 10 of Decree N° 15-026/PR of March 3, 2015, relating to payment systems, means, and incidents, nor to payment services that payment service providers and their agents render to each other.

Article 4: This law is without prejudice to the respect of provisions relating to the regulation of financial relations between the Union of the Comoros and Foreign countries.

Article 5: Payment services are:

• services allowing for the deposit of cash into a payment account or an electronic money account and all operations required for the management of such an account;
• services allowing for the withdrawal of cash from a payment account or an electronic money account and all operations required for the management of such an account;
• the execution of payment operations, including fund transfers to a payment account or an electronic money account opened with the payment service provider of the user or with another payment service provider:
  • the execution of direct debits;
  • the execution of payment operations using a payment card or an electronic device;
  • the execution of transfers, including standing orders;
• the issuance of payment instruments;
• the transmission of funds;
• payment initiation services and account information services.

Payment initiation services consist of initiating, at the user's request, a payment order from a payment account opened with another payment service provider.

Account information services consist of providing consolidated information concerning one or more payment accounts held by the user with one or more payment service providers.

Article 6: Payment service providers are credit institutions and financial intermediaries as defined by Law N° 13-003/AU relating to the banking law of June 12, 2013, electronic money institutions, and payment institutions.

In this law, the term "electronic money issuers" refers to electronic money institutions and credit institutions authorized by the Central Bank of the Comoros to issue electronic money.

Article 7: In this law, the word "user," singular or plural, refers to the clients of payment service providers.

Title II: Common obligations of payment service providers

Chapter One: Obligations of payment service providers towards users

Article 8: The relationship between the payment service provider and the user is governed by a convention concluded between the parties. The clauses of the convention must be clear and precise. The payment service provider submits a standard convention and any modification of the clauses of the standard convention to the approval of the Central Bank of the Comoros.

The convention between the payment service provider and the user may be concluded by an electronic means leaving a written trace.

Article 9: In the event of the conclusion of the convention by electronic means, the payment service provider indicates to the user:

• the different steps to follow to conclude the convention;
• the technical means allowing the user to identify, before the conclusion of the convention, errors made in the data entry and the means to correct them;
• the language or languages proposed for the conclusion and execution of the convention;
• the methods for archiving the convention and the operations that will be carried out for its execution, as well as the conditions for accessing the archived information;
• the means to consult the professional rules to which the payment service provider is subject.

The convention is concluded at the moment when the user receives, by electronic means, the acknowledgment of receipt of the acceptance by the payment service provider.

The convention provides that the signature and the written document in electronic form have the same legal value between the parties as the signature and the written document in handwritten form.

Article 10: The convention concluded between the payment service provider and the user defines the obligations of the parties and the measures for the protection of users' funds. It contains among other things the following mandatory mentions:

• the conditions for using the payment services offered by the payment service provider;

• the respective obligations and responsibilities of the payment service provider and the user;

• the risks and prudent measures inherent in the use of payment means made available to the user;

• the methods, procedures, and time limit for opposition in case of loss, theft, forgery, or fraudulent use of the payment means made available to the user;

• the conditions and methods for contesting operations carried out, including the existence of the amicable dispute settlement procedure provided for in Chapter 7 of this Title and the methods for its implementation;

• the execution time limit for operations, which cannot exceed one business day;

• potential value dates;

• commissions and fees of any nature that may be levied;

• the content and methods of information provided on the execution or non-execution of operations;

• the language or languages of communication used during the duration of the convention;

• the conditions for modification and termination of the convention.

In the case where the payment service provider uses one or more distribution agents, the convention states that the provider is responsible for the proper completion of operations carried out by the agent.

The convention may provide that the transmission of information between the payment service provider and the user may be done by electronic or telephone means.

Article 11: The payment service provider opens a payment account for the user or, regarding the provision of electronic money, an electronic money account. The operating modalities of the payment account or the electronic money account are fixed by the convention mentioned in Article 8.

Article 12: A payment operation, direct debit, transfer, or any other transmission of funds cannot be carried out by the payment service provider unless the user has authorized it. The authorization must be prior to the operation unless otherwise agreed. The modalities of authorization are fixed in the convention mentioned in Article 8.

Article 13: The payment service provider assigns any personal authentication means to the user to allow them secure access to the services provided and to carry out operations. A regulation of the Central Bank of the Comoros fixes the characteristics to which personal authentication means must respond.

Article 14: The payment service provider is responsible for unauthorized payment, direct debit, transfer, or any other transmission of funds operations and must immediately reimburse the amount to the user. This provision does not apply if the payment service provider can establish that the user committed a fault.

Article 15: If the user denies having authorized a payment operation that was executed or claims that the payment operation was not executed correctly, it is incumbent upon the payment service provider to prove that the operation was authenticated, duly recorded and accounted for, and that it was not affected by a technical or other failure of the service provided by the payment service provider.

Article 16: Instructions given by the user to the payment service provider are irrevocable at the latest from the moment they have been executed, subject to the provisions of Article 47.

Article 17: The payment service provider makes its tariff conditions available to any person, by display in its premises or by any remote consultation means.

Article 18: The payment service provider is liable towards the user for faults it commits or that its substituted mandatees commit in the execution of instructions given by the user, except in cases of force majeure.

Chapter 2: Right to an account

Article 19: Any natural or legal person legally residing in the Union of the Comoros has the right to open an account with an electronic money institution or a payment institution.

Residence in the Union of the Comoros may be permanent or temporary in accordance with the provisions fixed by a regulation of the Central Bank of the Comoros.

Any person who has been refused the opening of an electronic money account or a payment account by three (03) electronic money institutions or three (03) payment institutions successively and who does not have any electronic money account or payment account may request the Central Bank of the Comoros to designate an electronic money institution or a payment institution with which they can open such an account. The request for the opening of an electronic money account is not admissible if it is established that the applicant is subject to the prohibition mentioned in Article 55 of this law.

The designated institution may limit account-related services to the basic operations listed in Article 55 of Law N° 13-003/AU relating to the banking law of June 12, 2013. The tariff applied to basic services cannot be higher than the tariff for similar services offered to users who contract outside the procedure of the right to an account established by this article.

The conditions for using the account opened under the procedure established by this article, as well as the penalties incurred in case of misuse or fraud, are specified in the account opening convention.

Chapter 3: Respect for legislation relating to the fight against money laundering and terrorist financing

Article 20: The payment service provider respects the provisions of the legislation on money laundering and terrorist financing. It ensures the respect of said legislation by its distribution agents.

Article 21: The payment service provider is required to establish an internal device for the prevention and fight against money laundering and terrorist financing and to ensure adequate training of its personnel for this purpose under the conditions fixed by the Central Bank of the Comoros.

Chapter 4: Respect for competition rules

Article 22: The payment service provider and its distribution agents are subject to the provisions of competition legislation and its implementing texts in the exercise of their activities.

Article 23: Banks and decentralized financial institutions cannot refuse without legitimate reason the opening of an account to an electronic money institution or a payment institution.

Any electronic money institution or payment institution that has been refused the opening of an account by at least one bank or decentralized financial institution and which does not have any account in such an institution may request the Central Bank of the Comoros to designate a bank or a decentralized financial institution with which it can open such an account.

Article 24: Any electronic money institution and any payment institution may request the opening of an account in the payment system(s) when participation in such systems is necessary for the proper exercise of its activity.

Chapter 5: Professional secrecy

Article 25: Any member of the governing bodies of payment service providers, any person who participates in the management or control of such providers, and any person employed by such providers is bound by professional secrecy under the conditions and under the penalties provided for in Article 129 of this law.

Article 26: Professional secrecy cannot be opposed to the Central Bank of the Comoros, the Financial Intelligence Unit (FIU), the judicial authority acting within the framework of a criminal procedure, nor to any other authority towards whom the law provides for its lifting.

Notwithstanding professional secrecy, payment service providers may exchange information strictly necessary for the exercise of their activity under the conditions fixed by a regulation of the Central Bank of the Comoros.

Chapter 6: Protection and conservation of personal data

Article 27: The payment service provider is required to guarantee the protection of personal data during their collection, transmission, and storage until the expiration of the conservation period fixed in Article 28.

To this end, the payment service provider puts in place a device allowing to ensure the authenticity, integrity, protection, and confidentiality of data as well as the security of transactions.

In the event of a violation of the provisions of this article, the provider is subject to the sanctions provided for in Article 129.

Article 28: The payment service provider conserves the identity of users, an exhaustive statement of operations carried out by them, including the nature and amount of said operations, as well as all movements registered in users' accounts. These information are conserved on secure backup media for a duration of ten years.

Chapter 7: Dispute resolution

Article 29: The payment service provider makes available to the user a procedure allowing to handle complaints in case of non-executed or poorly executed operations, breach of contractual obligations by the provider, and opposition for loss, theft, or fraudulent use of a payment means.

The payment service provider informs the user of the name of the person or service responsible for the implementation of the procedure and the means to contact them. The person or service responsible for the implementation of the procedure must be contactable at all times.

Complaints and oppositions may be presented orally and must be confirmed by any process leaving a written trace within a period of five business days from the date of the complaint or opposition. The payment service provider makes available to the user the means to confirm the complaint or opposition in writing.

Article 30: The payment service provider confirms the receipt of the complaint and provides a means of proof attesting to the receipt of the complaint.

Article 31: In the event of opposition for loss, theft, or fraudulent use, the payment service provider immediately takes adequate measures to prevent the use of the payment means and the realization of any operation on the account.

Article 32: When the complaint concerns an unauthorized operation, the payment service provider provides the user with any document allowing to establish the existence of an authorization and justifies that the operation was correctly recorded in accounting and that it is not affected by a technical or other failure.

Article 33: The payment service provider handles the complaint within a time limit fixed by a regulation of the Central Bank of the Comoros. It informs the user of the progress of the handling of the complaint and the outcome.

Article 34: The complaint handling procedure is free. However, reasonable fees may be claimed when the handling of the complaint generates exceptional expenses. The amount of the fees is communicated to the user.

Article 35: The complaint handling procedure is submitted by the payment service provider to the approval of the Central Bank of the Comoros, which may request any modification.

Each year, the payment service provider sends to the Central Bank of the Comoros a report summarizing the complaints received during the previous year and the follow-up given to them.

The Central Bank of the Comoros publishes each year an overall report on the implementation of the complaint handling procedure by payment service providers.

Title III: Electronic Money

Chapter One: Electronic Money in General

Article 36: Electronic money is a monetary value stored on an electronic money support as defined in Article 37 of this law. It is issued without delay by an electronic money institution, against the handing over by the user of cash or book money for the purpose of carrying out all or part of the operations mentioned in Article 41 of this law. Electronic money can only be issued for a nominal value equal to that of the funds handed over in consideration.

The issuance of electronic money internationally is subject to the authorization of the Central Bank of the Comoros.

Electronic money can also be issued, under the same conditions, by a credit institution according to the modalities fixed by the texts governing it and by this law.

Electronic money is accepted as a means of payment by a natural or legal person other than the issuing institution and has a discharge power vis-à-vis the one who accepts it.

One unit of electronic money is equivalent to one Comorian Franc.

Electronic money represents a claim on the issuing institution.

Article 37: Any electronic, magnetic, biometric, or computer means allowing to carry out all or part of the operations mentioned in Article 41 of this law is considered as an electronic money support.

The provision of an electronic money support by an electronic money institution is subject to the prior authorization of the Central Bank of the Comoros.

Article 38: Electronic money holdings and electronic money payments may be subject to legal and regulatory limitations.

Article 39: Electronic money operations include the issuance and management of electronic money as defined in Articles 40 and 41 of this law.

Chapter 2: Issuance and Management of Electronic Money

Article 40: The issuance of electronic money is the operation by which electronic money is put into circulation and stored on an electronic money support against the handing over of cash or book money of an amount equal to the monetary value issued for the purpose of carrying out all or part of the operations mentioned in Article 41 of this law.

Article 41: The management of electronic money is the operation by which an electronic money issuing institution or a distribution agent offers one or more of the following services:

• the loading of the electronic money support,

• the withdrawal of money from the electronic money support,

• the transfer of electronic money,

• the storage of electronic money.

Article 42: The transfer of electronic money includes domestic and international transfers. International transfers are made through an approved intermediary under the conditions of the mandate contract concluded between the electronic money institution and the approved intermediary.

Chapter 3: Different Uses of Electronic Money

Article 43: Electronic money users can use the electronic money stored in a card to carry out all or part of the electronic money operations mentioned in Article 42 of this law under the conditions fixed by the convention mentioned in Article 8.

Article 44: Electronic money can be used by the user to carry out online payment operations under the conditions fixed by the convention mentioned in Article 8.

Article 45: The electronic money institution can offer electronic money services by means of mobile telephony under the conditions fixed by the convention mentioned in Article 8. In this case, the electronic money institution contracts with the operator or operators, holders of a mobile telephony license, that it has chosen.

Chapter 4: Provisions relating to transactions carried out by electronic money

Article 46: The electronic money issuing institution ensures the traceability of electronic money operations. To this end, it records in a