Administrative Instruction No. 007 Regulating the Activity of Exchange Offices (Modification No. 1)

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ADMINISTRATIVE INSTRUCTION No. 007 ON

REGULATION OF THE ACTIVITY OF EXCHANGE OFFICES

(Modification No. 1)

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The Central Bank of Congo, acting pursuant to the provisions of Laws No. 005/2002 of May 7, 2002, relating to the constitution, organization, and functioning of the Central Bank of Congo, No. 003/2002 of February 2, 2002, relating to the activity and control of Credit Institutions, and Ordinance-Law No. 67/272 of June 23, 1967, as amended and supplemented to date, defining the regulatory power of the Central Bank of Congo in matters of exchange, adopts the following provisions concerning the activity of Exchange Offices:

CHAPTER 1: GENERAL PROVISIONS

Article 1

Exchange Offices are legal entities under Congolese law, other than Credit Institutions, which carry out, as a habitual profession, manual exchange operations.

Article 2

Exchange Offices are authorized to:

• buy and sell foreign currencies in cash against the national currency;
• buy and sell foreign currencies in cash against other foreign currencies.

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CHAPTER II: APPROVAL

Article 3

Paragraph 1: - Any legal entity under Congolese law wishing to exercise the activity of an Exchange Office must obtain approval from the Central Bank of Congo.

• The status of Exchange Office is granted based on an approval act.

Paragraph 2: The application for approval addressed to the Governor of the Central Bank of Congo must be accompanied by the following documents:

• a copy of the original notarized articles of association;
• the act of depositing the articles of association with the registries of the High Court of the jurisdiction where the Exchange Office operates;
• a certified true copy of the New Commercial Register specifying that the applicant intends to exercise exclusively the activity of an Exchange Office;
• a certified true copy of the National Identification Certificate;
• proof of the existence of national currency and/or foreign currency accounts opened with the Congolese banking system;
• curriculum vitae and criminal record extracts less than three months old for the promoters and persons in charge of the administration and management of the Exchange Office.

Paragraph 3: The examination of the approval application is subject to the payment of file fees representing 3% of the security deposit.

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Paragraph 4: The approval application must indicate the trade name, full address, and telephone coordinates of the Exchange Office.

Paragraph 5: The Exchange Office must make manual exchange its sole activity.

Article 4

No one may create, administer, direct, or manage, even through an intermediary, if they:

1. have been convicted in the Democratic Republic of Congo or abroad as a principal, accomplice, or for attempted commission of any of the following offenses:

• counterfeiting;
• counterfeiting or falsification of seals, stamps, punches, and marks;
• forgery and use of forgery in documents;
• theft, extortion, misappropriation or abuse of confidence, fraud, or handling stolen goods;
• bankruptcy, fictitious circulation of commercial instruments;
• issuing checks without provision;
• corruption or extortion;
• money laundering;
• counterfeiting or falsification of banknotes.

2. have been convicted for an offense against Banking Law No. 003/2002 of February 2, 2002, relating to the activity and control of Credit Institutions, or against Exchange Regulation;

3. have been declared bankrupt, unless rehabilitated in their favor, even if the bankruptcy was opened abroad;

4. have been convicted of a common law crime and for an offense assimilated by law to any of those listed above;

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5. have participated in the administration, direction, or daily management of a Credit Institution or another financial intermediary whose forced liquidation has been ordered or whose bankruptcy has been declared, unless express authorization is granted by the Central Bank of Congo.

Article 5

Paragraph 1: Approval as an Exchange Office is granted after an on-site inspection by the Central Bank of Congo, to assess the minimum conditions of the premises and to ensure the existence of necessary equipment for its proper functioning, namely:

• a means of communication (telephone, voice mail or fax or electronic messaging);
• a safe;
• a cash register or a calculator;
• a computer;
• a counterfeit bill detector;
• a banknote counting machine;
• a photocopier;
• a notice board.

Paragraph 2: After a favorable opinion, the Central Bank of Congo invites the applicant to pay the security deposit and approval fees fixed as follows:

• Security Deposit: USD 2,500;
• Approval Fees: 20% of the security deposit.

Except for the security deposit, fees may be paid in national currency.

Paragraph 3: The payment of the security deposit and the payment of fees may be made:

• by bank transfer or wire transfer to the credit of the account of the Central Bank of Congo to be designated by the Foreign Services Directorate;

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• by named check in favor of the Central Bank of Congo;
• in cash at the counters of the Central Bank of Congo.

Paragraph 4: The security deposit is not remunerated. It is refundable in foreign currency upon cessation of activities, subject to deduction of any sums due to the Public Treasury and/or the Central Bank of Congo.

Article 6

The Central Bank of Congo assigns each Exchange Office a distinct approval number and periodically publishes in the Official Journal the list of approved Exchange Offices.

Article 7

The Central Bank has 90 days from receipt of the approval application to examine the file. The absence of a decision at the expiration of this period constitutes authorization.

CHAPTER III: AUTHORIZATIONS

Article 8

Paragraph 1: Any legal entity approved as an Exchange Office may open one or more Branches, one or more Counters, subject to the authorization of the Central Bank of Congo.

By Branch, is meant a branch of the exchange office established in one of the cities of the Democratic Republic of Congo other than that of the registered office. In contrast, by Counter, is meant a branch of the Exchange Office opened in the city where the registered office or the branch is established.

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Paragraph 2: The opening of each Branch or each Counter is subject to the same conditions of Article 5, paragraph 1, and to the payment of the following fees:

• Authorization Fees: 20% of the security deposit;
• File Fees: 3% of the security deposit.

Paragraph 3: Exchange Offices are required to open accounts for their Branches with Credit Institutions in the jurisdiction of activities of said branches.

Paragraph 4: Any change in telephone coordinates or address of any operating point must be communicated immediately to the Central Bank of Congo/Direction of the Supervision of Financial Intermediaries with a copy to the Foreign Services Directorate.

Paragraph 5: The following are subject to the prior agreement of the Central Bank of Congo:

• the absorption, split, or merger of two or more Exchange Offices;
• the closure of the Exchange Office, the Branch, or its Counter;
• the change of trade name or address;
• the change of promoters and directors.

Article 9

Authorization is granted within 90 days from the date mentioned on the receipt notice from the Central Bank. The absence of a decision at the expiration of this period constitutes authorization.

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CHAPTER IV: ADMINISTRATIVE DIRECTIVES

Article 10

Paragraph 1: The transactions of Exchange Offices concern currencies quoted by the Central Bank of Congo.

Paragraph 2: The operations of Exchange Offices are carried out freely at the rate negotiated between parties.

Paragraph 3: Exchange Offices are not authorized to carry out manual exchange operations described in Article 2 above for amounts exceeding USD 10,000 or the equivalent in another foreign currency per person and per day.

Article 11

Exchange operations are carried out based on a slip prepared in duplicate taken from a continuous numerical series, the model of which is in Annex 1.

The original is given to the client and the copy is kept by the Exchange Office.

Article 12

Paragraph 1: Approved Exchange Offices are obligated to:

• immediately notify the Central Bank of Congo/Direction of the Supervision of Financial Intermediaries of any transaction deemed suspicious in the context of the fight against money laundering and the financing of terrorism,
• collect and photocopy the identities, address, and photo of their clientele carrying out manual exchange operations at their counters,
• keep proper accounting, i.e., present synthesis statements in accordance with the Congolese General Accounting Plan,

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• prepare daily statements of exchange operations according to the model in Annexes II and III,
• transmit to the Central Bank of Congo, by the 5th day of the following month at the latest, a consolidated monthly statement by currency of foreign exchange sales and purchases made. The original of the statement is reserved for the approved Exchange Office, the copies for the Central Bank of Congo/Directions of the Supervision of Financial Intermediaries and Foreign Services,
• report counterfeit money against receipt and transmit it to the Central Bank of Congo by a detailed note,
• display certified true copies of the approval act and the authorization to open its Branches in the premises where the operations provided for by this Instruction take place,
• reproduce on each document or correspondence of the Exchange Office the approval numbers and authorization numbers for the opening of the Branch or Counter.

Paragraph 2: Exchange Offices are not authorized to carry out the following operations:

• make deposits for their clients;
• operate transfers with foreign countries;
• import or export banknotes;
• grant loans to their clientele.

Article 13

Exchange Offices are required to organize themselves into a Professional Corporation.

This corporation has the following objectives:

• the representation of the collective interests of its members before the public authorities and the Central Bank;
• the information of its members and the public;

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• the study of any question of common interest and the elaboration of recommendations relating thereto, with a view, if necessary, to favor cooperation between networks;
• the organization and management of services of common interest.

The draft statutes of this Corporation are submitted for approval to the Central Bank.

Article 14

Exchange Offices are required to display the buying and selling exchange rates of the day.

CHAPTER III: WITHDRAWAL OF APPROVAL

Article 15

Withdrawal of approval is pronounced by the Central Bank when the Exchange Office:

• formulates the request and after prior consultation with the Central Bank/Direction of the Supervision of Financial Intermediaries;
• does not start activities within six months following the grant of approval;
• no longer exercises its activities for more than six months;
• no longer meets the conditions to which the approval is subject;
• obtained approval in violation of the provisions of Article 5 of this Instruction;
• violated the provisions of Articles 4 and 5 of this Instruction.

The Central Bank of Congo proceeds, at the expense of the Exchange Office, to the publication in the official journal of the decision to withdraw approval.

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Article 16

Withdrawal of approval entails the deletion of the Exchange Office from the list provided for in Article 4 of this Instruction. Deletion carries with it the forced dissolution of the Exchange Office in accordance with the legal provisions on commercial companies.

In the event of withdrawal of approval, the security deposit is returned after deduction of any sums due to the Treasury and the Central Bank of Congo. In the event of insufficiency of the security deposit, the Exchange Office is required to pay the amount of the excess fees within 7 days.

CHAPTER IV: SANCTIONS

Article 17

Paragraph 1: Without prejudice to the provisions of Article 13 of Ordinance-Law No. 67-272 of June 23, 1967, defining the regulatory power of the Central Bank of Congo in matters of exchange, as amended and supplemented to date, and those of Law No. 003/2002 of February 2, 2002, relating to the activity and control of Credit Institutions, if an Exchange Office has infringed a provision of this Instruction, the Central Bank of Congo may impose one of the following disciplinary sanctions:

• a reprimand;
• a censure;
• suspension of activities;
• withdrawal of approval.

Paragraph 2: In addition, the Central Bank of Congo may impose, either in place of or in addition to these sanctions, a pecuniary sanction in accordance with the Tariffs and Conditions of the Central Bank of Congo.

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Article 18

A reprimand is pronounced by the Central Bank of Congo against any Exchange Office found guilty of minor faults likely to cause prejudice to its clientele or to the Central Bank of Congo.

Article 19

A censure is pronounced by the Central Bank of Congo against any Exchange Office found guilty of repeated minor faults or in case of recidivism leading to a second reprimand within a year.

Article 20

Suspension of activities not exceeding a duration of three months is pronounced by the Central Bank of Congo against any Exchange Office found guilty of a serious fault or in case of recidivism of a fault leading to a censure within a year.

Article 21

Withdrawal of approval is pronounced by the Central Bank of Congo by virtue of the administrative and disciplinary powers it exercises over the Exchange Office in accordance with the provisions of Articles 17 and 19 of this Instruction.

Article 22

Paragraph 1: Any Exchange Office is required to pay fines and administrative fees imposed pursuant to legal or regulatory provisions within a period of thirty days from the notification of the sanction. After this period, payment is made by automatic debit from the security deposit.

Paragraph 2: The Exchange Office has a period of seven days to replenish the security deposit within the limits provided for in Article 6, paragraph 2 of this Instruction.

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Article 23

Within a period of five working days from the notification of the sanction, the Exchange Office that has received one of the sanctions provided for in Article 19 of this Instruction may file a reasoned appeal with the Central Bank of Congo to the extent applicable.

However, the appeal is not suspensive of the sanction.

CHAPTER VII: FINAL PROVISIONS

Article 24

Paragraph 1: Exchange Offices are required to comply with this Instruction.

Paragraph 2: Existing Exchange Offices have a period of 3 months from the date of entry into force of this Instruction to regularize their situation.

Article 25

Any matter relating to the activity of Exchange Offices not provided for by these provisions is to be submitted to the appreciation of the Central Bank of Congo.

Article 26

Exchange Offices are required to strictly respect the provisions of this Instruction, which enters into force on the date of its signature.

Done at Kinshasa, on J-C. MASANGU MULONGO Governor.