Ordinance No. 03-11 of August 26, 2003 on Money and Credit

ORDINANCE NO. 03-11 OF AUGUST 26, 2003 ON MONEY AND CREDIT (J.O. NO. 52 OF AUGUST 27, 2003) The President of the Republic;

• Having regard to the Constitution, particularly Articles 122-15° and 124;
• Having regard to Law No. 62-144 of December 13, 1962, establishing and setting the statutes of the Central Bank of Algeria;
• Having regard to Ordinance No. 66-154 of June 8, 1966, amended and supplemented, establishing the civil procedure code;
• Having regard to Ordinance No. 66-155 of June 8, 1966, amended and supplemented, establishing the criminal procedure code;
• Having regard to Ordinance No. 66-156 of June 8, 1966, amended and supplemented, establishing the criminal code;
• Having regard to Ordinance No. 75-58 of September 26, 1975, amended and supplemented, establishing the civil code;
• Having regard to Ordinance No. 75-59 of September 26, 1975, amended and supplemented, establishing the commercial code;
• Having regard to Law No. 84-17 of July 7, 1984, amended and supplemented, on finance laws;
• Having regard to Law No. 90-10 of April 14, 1990, amended and supplemented, on money and credit;
• Having regard to Law No. 90-30 of December 1, 1990, establishing the land law;
• Having regard to Ordinance No. 03-03 of 19 Joumada El Oula 1424 corresponding to July 19, 2003 on competition; The Council of Ministers having been heard; Promulgates the Ordinance as follows:

BOOK I ON MONEY Article 1. — The monetary unit of the Algerian Democratic and Popular Republic is the Algerian dinar, abbreviated D.A. The D.A. is divided into one hundred equal parts called centimes, abbreviated CTS. Art. 2. — Fiduciary money consists of banknotes and metallic coins. The privilege to issue, within the national territory, fiduciary money belongs to the State. The exercise of this privilege is delegated exclusively to the central bank, hereinafter referred to in its relations with third parties as the "Bank of Algeria", and which is governed by the provisions of this Ordinance. Art. 3. — The following are determined by regulatory measures taken in accordance with the provisions of this Ordinance: — the issuance of banknotes and metallic coins; — the identifying signs of a banknote or metallic coin, notably their face value, dimensions, type and other characteristics;

— the conditions and procedures for controlling the manufacture and destruction of banknotes of money. Art. 4. — Banknotes and metallic coins issued by the Bank of Algeria alone have legal tender to the exclusion of all others. They possess unlimited discharge power. Art. 5. — Banknotes and metallic coins subject to a withdrawal from circulation measure lose their discharge power if not presented for exchange within ten (10) years. Their counter-value shall then be acquired by the Public Treasury. Art. 6. — No opposition may be served on the Bank of Algeria in case of loss, theft, destruction or seizure of banknotes or metallic coins issued by it. Art. 7. — It is prohibited to anyone to issue, put into circulation or accept: — any instrument denominated in Algerian dinars intended to serve as a means of payment instead of the national currency; — any payable-to-bearer obligation not yielding interest, even if denominated in foreign currency. Art. 8. — Counterfeiting and falsification of banknotes or metallic coins issued by the Bank of Algeria or any other foreign legal monetary authority, as well as the introduction, use, sale, peddling and distribution of such counterfeit or falsified banknotes or coins, shall be sanctioned in accordance with the criminal code.

BOOK II STRUCTURE, ORGANIZATION AND OPERATIONS OF THE BANK OF ALGERIA TITLE I GENERAL PROVISIONS Art. 9. — A national establishment endowed with legal personality and financial autonomy, the Bank of Algeria is deemed a merchant in its relations with third parties. It is governed by commercial legislation to the extent that it is not derogated from by the provisions of this Ordinance. It follows commercial accounting rules. It is not subject to public accounting prescriptions nor to the control of the Court of Auditors. Art. 10. — The capital of the Bank of Algeria is entirely subscribed by the State. Art. 11. — The headquarters of the Bank of Algeria is in Algiers. The Bank of Algeria establishes branches or agencies in all localities where it deems necessary. Art. 12. — The dissolution of the Bank of Algeria may only be pronounced by a law, which shall set out the procedures for its liquidation.

TITLE II MANAGEMENT AND SUPERVISION OF THE BANK OF ALGERIA CHAPTER I DIRECTION OF THE BANK OF ALGERIA Art. 13. — The management of the Bank of Algeria is ensured by a Governor assisted by three Deputy Governors, all appointed by decree of the President of the Republic. Art. 14. — The office of Governor is incompatible with any elected mandate, any government office and any public function. The same applies to the office of Deputy Governor. Except for representing the State before international public institutions of a monetary, financial or economic nature, the Governor and Deputy Governors may not, during their term of office, exercise any activity, profession or function. They may not borrow any amount from any institution whatsoever, Algerian or foreign, and no commitment bearing the signature of one of them may be admitted into the portfolio of the Bank of Algeria or that of any institution operating in Algeria. Art. 15. — The salary of the Governor as well as that of the Deputy Governors is fixed by decree. They are borne by the Bank of Algeria. At the end of their term of office, except in cases of dismissal for serious fault, the Governor and Deputy Governors or eventually their heirs receive an allowance equal to two years' salary which is borne by the Bank of Algeria and, to the exclusion of any other amount paid by it. During a two-year period after the end of their term, the Governor and Deputy Governors may neither manage nor enter the service of an establishment subject to the authority or control of the Bank of Algeria, or a company dominated by such an establishment, nor serve as agents or advisors to such establishments or companies. Art. 16. — The Governor ensures the management of the affairs of the Bank of Algeria. The Governor of the Bank of Algeria, hereinafter referred to as "Governor", takes all execution measures and performs all acts within the framework of the law. He signs, on behalf of the Bank of Algeria, all agreements, annual reports, balance sheets and income statements. He represents the Bank of Algeria before public authorities in Algeria, foreign central banks, international financial organizations and, generally speaking, before third parties. Legal actions are brought and defended at his request and under his supervision. He takes all conservation measures he deems useful. He proceeds to all acquisitions and alienations of real estate duly authorized. He organizes the services of the Bank of Algeria and defines their tasks. He recruits, appoints to their posts, promotes, dismisses and revokes the staff of the Bank of Algeria, under the conditions provided by the personnel statute. He designates the representatives of the Bank of Algeria within the councils of other institutions when such representation is provided for. Art. 17. — The Governor determines the duties of each Deputy Governor and specifies his powers. He may delegate signature to agents of the Bank of Algeria. He may, for service needs, constitute among the senior management of the Bank of Algeria special agents.

CHAPTER II ADMINISTRATION OF THE BANK OF ALGERIA Art. 18. — The Board of Directors is composed: — of the Governor, President; — of the three Deputy Governors; — of three civil servants of the highest rank, designated by decree of the President of the Republic on account of their expertise in economic and financial matters. In case of absence or vacancy of their offices, the civil servants are replaced by their substitutes designated under the same conditions. Art. 19. — The Bank of Algeria is administered by a Board of Directors, which is invested with the following powers: — it deliberates on the general organization of the Bank of Algeria as well as on the opening or suppression of agencies and branches; — it adopts the regulations applicable to the Bank of Algeria; — it approves the personnel statute and the remuneration system for the staff of the Bank of Algeria; — it deliberates, at the initiative of the Governor, on all agreements; — it rules on acquisitions and alienations of real estate; — it pronounces itself on the advisability of legal actions to be brought on behalf of the Bank of Algeria and authorizes compromises and settlements; — it adopts for each year the budget of the Bank of Algeria; — it determines the conditions and form in which the Bank of Algeria establishes and adopts its accounts; — it adopts the distribution of profits and approves the draft report that the Governor addresses on its behalf to the President of the Republic; — it is informed of all matters concerning the management of the Bank of Algeria. Art. 20. — In the exercise of their term as members of the Board of Directors, civil servants and their substitutes sit ex officio. Art. 21. — The Board of Directors determines the attendance fees for the three civil servants as well as the conditions under which their eventual travel and accommodation expenses are reimbursed to them. Art. 22. — The Governor convenes and presides over the Board of Directors and sets the agenda for its sessions. In his absence, the session is presided over by the Deputy Governor who acts as his substitute. The Board of Directors meets upon convocation by its President as often as necessary. It is convened if three members so request. Art. 23. — The Board of Directors adopts its internal regulations. Art. 24. — The presence of at least four members of the Board of Directors is necessary for the holding of its meetings. No member may give a proxy to be represented. Decisions are taken by simple majority of the members present; in case of equality of votes, the President's vote is decisive. Art. 25. — Without prejudice to the obligations imposed on them by law, and outside cases where they are called upon to testify in court in criminal matters, members of the Board of Directors may not engage in any disclosure, directly or indirectly, of facts or information of which they have knowledge within the framework of their term. The same obligation is imposed on any person to whom the Board of Directors resorts for the exercise of its mission.

CHAPTER III SUPERVISION AND CONTROL OF THE BANK OF ALGERIA BY THE CENSORAT Art. 26. — The supervision of the Bank of Algeria is ensured by the Censorat composed of two censors appointed by decree of the President of the Republic. The two censors work full-time in a seconded position from their original administration. Their functions end under the same forms. The two censors must have knowledge, notably financial and in central bank accounting matters, enabling them to exercise their mission. The procedures for their remuneration are fixed by regulatory means. The organization of the Censorat as well as the human and material resources made available to it are defined by the Board of Directors. Art. 27. — The censors exercise general supervision over all services and operations of the Bank of Algeria. They exercise particular supervision over the risk center and the non-performing loans center as well as over the organization and functioning of the money market. The censors may operate jointly or separately the verifications or controls they deem appropriate. They attend sessions of the Board of Directors with advisory voice. They inform the Board of Directors of the results of the controls they have carried out. They may submit to it all proposals or remarks they deem useful. If their proposals are not adopted, they may request their transcription in the deliberations register. They inform the Minister in charge of finances. They report to the Board of Directors on the verification of end-of-year accounts and any amendments they propose. They also address a report to the Minister in charge of finances within four months of the closure of the financial year; a copy is communicated to the Governor. The Minister in charge of finances may request, at any time, reports on determined questions falling within their competence.

CHAPTER IV ANNUAL ACCOUNTS AND PUBLICATIONS Art. 28. — The accounts of the Bank of Algeria are adopted on December 31 of each year. Net income from all amortizations, charges and provisions constitutes the annual profits. From these profits, 10% is deducted for the benefit of the legal reserve. This deduction ceases to be mandatory once the reserve reaches the amount of the capital. After allocation of provisions deemed necessary by the Board of Directors to general and special reserves, the balance is paid to the Treasury. Reserves may be allocated to capital increases. Art. 29. — Within three months of the closure of each financial year, the Governor transmits to the President of the Republic the balance sheet and income statements as well as a report accounting for the operations and activities of the Bank of Algeria, notably those related to banking supervision activity conducted during the financial year, the state of the prudential situation of banks and financial establishments and the lessons drawn from risk centralization activity. At the latest one month after this transmission, the balance sheet and income statements are published in the Official Journal of the Algerian Democratic and Popular Republic. The Governor periodically addresses to the President of the Republic, with communication to the Monetary and Credit Council and the banking commission, a report on banking supervision. The Governor also annually submits to the President of the Republic, with communication to the Head of Government, the Monetary and Credit Council having been heard, the following documents: — a report on foreign exchange reserve management; — a report on external debt management including an analysis of the situation and prospects of the economy's external solvency. Art. 30. — The Bank of Algeria publishes an annual report on the economic and monetary evolution of the country which contains notably the elements necessary for a good understanding of monetary policy, this report gives rise to a communication to the National People's Assembly followed by a debate. The Bank of Algeria may publish statistical documentation and economic and monetary studies. Art. 31. — The Bank of Algeria addresses to the Minister in charge of finances the status of its accounts closed at the end of each month. This status is published in the Official Journal of the Algerian Democratic and Popular Republic.

CHAPTER V EXEMPTIONS AND PRIVILEGES Art. 32. — Notwithstanding the provisions of Article 13 of Law No. 84-17 of July 7, 1984 on finance laws, the Bank of Algeria is exempted from all operations related to its printing activity from all taxes, duties, levies or fiscal charges of whatever nature. Contracts, instruments and generally all documents and acts relating to operations handled by the Bank of Algeria in the direct exercise of its functions are exempt from stamp and registration duties. Art. 33. — The Bank of Algeria is dispensed, during any procedure, from providing bail or advance in all cases where the law provides this obligation on the parties, as well as from all judicial fees and taxes collected for the benefit of the State. Art. 34. — The State ensures the security and protection of the Bank of Algeria's establishments and provides it free of charge with the necessary escorts for the security of fund or value transfers.

BOOK III ATTRIBUTIONS AND OPERATIONS OF THE BANK OF ALGERIA TITLE I GENERAL ATTRIBUTIONS Art. 35. — The Bank of Algeria is tasked with creating and maintaining in the fields of money, credit and foreign exchange, the most favorable conditions for rapid economic development, while ensuring the internal and external stability of the currency. To this end, it is charged with regulating monetary circulation, directing and controlling, by all appropriate means, the distribution of credit, ensuring sound management of financial commitments towards foreign countries and regulating the foreign exchange market. Art. 36. — The Bank of Algeria is consulted by the Government on any draft law and regulatory text relating to finances and money. It may propose to the Government any measure likely to exert a favorable action on the balance of payments, price movements, the situation of public finances and, generally speaking, economic development. It informs it of any fact likely to affect monetary stability. It may request from banks and financial establishments as well as financial administrations all statistics and information it deems useful to know the evolution of economic conjuncture, money, credit, balance of payments and external indebtedness. It defines the procedures for foreign credit operations and authorizes them, except when they concern loans made by the State or on its behalf. It centralizes all information useful for control and monitoring of financial commitments towards foreign countries and communicates them to the Minister in charge of finances. Art. 37. — The Bank of Algeria assists the Government in its relations with multilateral and international financial institutions. If necessary, it may represent it both before these institutions and within international conferences. It participates in the negotiation of international payment, exchange and compensation agreements; it is charged with their execution. It concludes any technical arrangement relating to the procedures for implementing said agreements. The eventual execution of these agreements by the Bank of Algeria is carried out on behalf of the State.

TITLE II EMISSION OF MONEY Art. 38. — The Bank of Algeria issues fiduciary money under coverage conditions determined by regulation taken in accordance with paragraph a) of Article 62 below. The coverage of money comprises the following elements: — gold ingots and gold coins; — foreign currencies; — Treasury bonds; — effects under rediscount, repurchase or pledge.

TITLE III OPERATIONS Art. 39. — The gold reserve held by the Bank of Algeria is the property of the State. The Bank of Algeria may carry out all operations on gold, notably purchase, sale, loan and pledge, for cash and forward. Gold holdings may serve as collateral for any advance intended for the active management of external public debt. In this case, the Monetary and Credit Council is consulted and the President of the Republic is informed. Art. 40. — The Bank of Algeria may purchase, sell, discount, rediscount, take or give in repurchase agreement, give or take in pledge, put or receive in deposit all payment instruments denominated in foreign currencies as well as all holdings in foreign currencies. It manages and places foreign exchange reserves. Within this framework, it may contract loans and subscribe to financial instruments denominated in foreign currencies and regularly quoted in the first category on international financial markets. The procedures for managing foreign exchange reserves are defined by the Monetary and Credit Council in accordance with Article 62 paragraph n) below. Art. 41. — The procedures and conditions for rediscount, taking and giving in repurchase agreement and advances on effects in national currency by the Bank of Algeria are fixed by regulation of the Monetary and Credit Council. The outstanding amount of public effect operations carried out by the Central Bank, provided for in the preceding articles, is fixed in accordance with monetary policy objectives. Art. 42. — The Bank of Algeria may grant banks advances on currencies and gold ingots, on foreign currencies and on public and private effects. In no case may the duration of these advances exceed one year. Art. 43. — The Bank of Algeria may grant banks current account credits for a duration of up to one year. These credits must be guaranteed by pledges on Treasury bonds, gold, foreign currencies or effects admissible for discount under regulations taken in this matter by the Monetary and Credit Council. Art. 44. — In the cases provided for in the above articles, the borrower subscribes to the Bank of Algeria an engagement to repay at maturity the amount of credit granted. A regulation of the Monetary and Credit Council will specify the conditions and procedures for implementing the provisions of this article as well as those of Article 43 above. Art. 45. — The Bank of Algeria may, within the limits and following conditions fixed by the Monetary and Credit Council, intervene in the money market and, notably, purchase and sell public effects and private effects admissible for rediscount or advances. In no case may these operations be treated for the benefit of the Treasury, nor local authorities issuing them. Art. 46. — On a contractual basis, and within the limit of a maximum equal to ten percent (10%) of ordinary State revenues recorded during the previous financial year, the Bank of Algeria may grant the Treasury current account overdrafts whose total duration may not exceed 240 days, consecutive or non-consecutive, during a calendar year. The authorized overdrafts give rise to the collection of a management commission whose rate and procedures are fixed in agreement with the Minister in charge of finances. These advances must be repaid before the end of each financial year. The Bank of Algeria is also authorized to exceptionally grant the public Treasury an advance, intended exclusively for the active management of external public debt. The procedures for implementing this advance and its repayment, notably the schedule of the latter, are fixed by convention between the central bank and the public Treasury, the Monetary and Credit Council.