Decree No. 2006-281 of April 25, 2006 specifying the implementation procedures for certain provisions of Law No. 2004-045 of January 14, 2005 on the prevention and prosecution of check-related offenses

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DECREET No. 2006-281 of April 25, 2006 specifying the implementation procedures for certain provisions of Law No. 2004-045 of January 14, 2005 on the prevention and prosecution of check-related offenses (Official Gazette No. 3039 of July 3, 2006 pages 3619 – 3622) The Prime Minister, Head of Government, Having regard to the Constitution, Having regard to Law No. 2004-045 of January 14, 2005 on the prevention and prosecution of check-related offenses, Having regard to Decree No. 2003-007 of January 12, 2003 appointing the Prime Minister, Head of Government, Having regard to Decree No. 2003-008 of January 16, 2003, as amended by Decrees No. 2004-001 of January 5, 2004, No. 2004-680 of July 5, 2004, No. 2004-1076 of December 7, 2004, No. 2005-700 of October 19, 2005 and Decree No. 2005-827 of November 28, 2005 appointing members of the Government, On the proposal of the Keeper of the Seals, Minister of Justice and the Minister of Economy, Finance, and Budget, In Council of Ministers, Decrees:

Article 1. This Decree specifies the implementation procedures for certain provisions of Law No. 2004-045 of January 14, 2005 on the prevention and prosecution of check-related offenses in accordance with its Article 36.

Article 2. For the application of Law No. 2004-045 of January 14, 2005, the term "banker" refers to credit institutions and financial entities authorized to maintain accounts on which checks may be drawn.

Article 3. For the application of paragraph 2 of Article 1 of Law No. 2004-045 of January 14, 2005, the following constitute instructions originating from the account holder:

1. Any contractual clause regarding automatic debits resulting from adherence to the general pricing conditions applicable to customers and updated for their awareness. Absent this condition, the debit transaction remains subject to prior notification as provided in Article 1 of Law No. 2004-045.
2. Any withdrawal linked to bank direct debit arrangements;
3. Any assignment of balances and salaries authorized by the competent judge in accordance with the law. Conversely, and in compliance with current regulations, garnishments and notices to third-party holders are executed immediately on the date of their service. However, within five days following such execution, the account freeze shall be notified to the holder by the banker in accordance with Article 1 of Law No. 2004-045.

Article 4. The one-year period prohibiting the issuance of checks runs from the date of payment refusal issued by the drawee bank. To this end, the notification of the injunction provided for in Article 3 of Law No. 2004-045, sent by the drawee to the account holder, must specify the number and amount of the check whose payment could not be processed, the status of the account, and the date of the payment refusal, which marks the effective date of the banking prohibition. This notification also indicates the account holder's right to regularize by depositing sufficient funds into their account within five days of receiving the injunction letter, covering both the check payment and associated default fees, as well as notice that failure to regularize will subject them, in addition to the automatic banking prohibition sanction, to one of the penalties stipulated in Article 11 of said law.

Article 5. The regularization option provided for in Article 9 of Law No. 2004-045 is carried out exclusively by depositing the funds specified in paragraph 3 of Article 4 above into the account where the payment refusal was recorded. Upon regularization, a certificate stating the number and issuance date of the unpaid check, along with the amount of funds deposited, is issued to the account holder. This certificate will indicate, on the one hand, the account holder's obligation to invite the check beneficiary to present it for payment within a new one-year period calculated from the deposit of funds, and on the other hand, notice that the right to issue checks is only restored upon the expiration of this one-year period, except for checks used exclusively for fund withdrawals by the holder from the drawee or those that are certified.

Article 6. For the application of Article 9 of Law No. 2004-045, the funds deposited as regularization are specifically allocated to the payment of the check and remain otherwise unavailable for a period of one year. If unused upon the expiration of this period, the funds become available again.

Article 7. The deposit of funds for regularization under Article 9 of Law No. 2004-045 must be made within the fixed five-day period calculated from the receipt of the injunction letter. If made after this deadline, it fails to meet the strict conditions set forth in Articles 9 and 10 of said law, and the lack of regularization must be formally recorded.

Article 8. The regularization or the lack thereof within the five-day period shall be declared by the drawee bank to the Central Bank in the forms and timeframes established by this institution's instructions, in accordance with Article 22 of said law.

Article 9. When a payment incident occurs on the account of a holder subject to an ongoing banking prohibition, and the check issuance date precedes the sanction execution period, a new injunction is sent by the drawee via simple letter to the account holder, indicating the option to regularize all unpaid checks within a new five-day period in accordance with Article 9 of Law No. 2004-045.

Article 10. For the application of Article 6 of Law No. 2004-045, the use of a joint account is suspended until the names of the signatories on the joint account subject to the banking prohibition are removed from said account's transactions, and corresponding check forms are confiscated, either by modifying the list of signatories in cases with multiple holders, or by converting the account to an individual account. An injunction containing the details stipulated in Article 3 of Law No. 2004-045 is sent personally by the drawee to each joint account holder, indicating their regularization option in accordance with Article 9 of Law No. 2004-045.

Article 11. For the application of Article 7 of Law No. 2004-045, in addition to the legal entity subject to the banking prohibition on issuing checks, the sanction also applies to the representative who effectively signed the check causing the payment incident. In both cases, and in accordance with Article 3 of Law No. 2004-045, the issuance of checks is prohibited for them in the future, except for checks used exclusively for fund withdrawals by the holder from the drawee and those that are certified.

Article 12. The automatic banking prohibition sanction is not cumulative with the supplementary judicial prohibition penalty imposed by the criminal court, and the latter is executed upon the expiration of the banking prohibition.

Article 13. For the application of paragraph 2 of Article 18 of Law No. 2004-045, the issued order, which carries the effects of a default judgment, is subject to neither opposition nor appeal, in accordance with paragraph 4 of Article 248 of the Code of Civil Procedure.

Article 14. The Central Bank provides an extract from the central check file detailing payment incidents concerning a specific account holder exclusively to the authorities referenced in Article 27 of Law No. 2004-045. The extract contains a record of payment incidents registered within the last three years under the name of the account holder subject to the request.

Article 15. Disputes regarding the application of the banking prohibition sanction on issuing checks are brought before the civil court. However, in cases of urgency and serious challenge to the basis of the sanction, the summary proceedings judge may provisionally order its suspension for a period not exceeding two months.

Article 16. The time periods referenced in the provisions of Law No. 2004-045 and this Decree are clear periods defined as excluding the start date. If the final day of the indicated period falls on a holiday, this period shall be extended until the first working day following the holiday.

Article 17. Checks issued before April 25, 2005 (the publication date of Law No. 2004-045 of January 14, 2005) and presented for payment after this date are exempt from the banking prohibition sanction on issuing checks. Nevertheless, the drawer benefits from the provisions of Articles 9 and 10 of Law No. 2004-045 regarding the regularization option.

Article 18. The Keeper of the Seals, Minister of Justice, and the Minister of Economy, Finance, and Budget are each responsible, within their respective areas, for the execution of this Decree, which shall be published in the Official Gazette of the Republic.

Done at Antananarivo, on April 25, 2006. By the Prime Minister, Head of Government: Jacques SYLLA The Keeper of the Seals, Minister of Justice, Lala RATSIHAROVALA. The Minister of Economy, Finance, and Budget, Benjamin Andriamparany RADAVIDSON