Circular 114-2 on Fund Transfers Without Consideration

Bank of the Republic of Haiti
Circular 114-2
TO BANKS AND TRANSFER COMPANIES

Pursuant to Articles 2 and 3 of the Decree of June 5, 2020, modifying certain provisions of the Decree of July 6, 1989, on transfer companies, and Article 161 of the Law of May 14, 2012, on banks and other financial institutions, this circular defines the standards related to international fund transfers without consideration.

1. Modalities of Fund Transfers

1.1. Received Transfers
Banks and transfer companies are required to pay international transfers:
a) in foreign currency if the beneficiary receives the funds in their deposit account denominated in US dollars held at a financial institution; b) in gourdes if the beneficiary receives payment at any service point (branch, agency, office, kiosk) or on a payment instrument.

Payments in gourdes are made at the reference rate of the day the funds are received by the beneficiary. This rate is published daily by the BRH (Bank of the Republic of Haiti).

When paying a transfer, banks and transfer companies must identify their regular or occasional client, in accordance with the provisions of current laws and regulations, and provide the client with a transaction receipt. The receipt must contain, among other things, the amount and currency in which the transfer was paid, the exchange rate of the transaction, the name of the bank or transfer company, and the address of the service point that performed the operation.

Banks and transfer companies are required to prominently display the BRH reference rate in their premises. They must also ensure that this rate is displayed in a visible location in all service points managed by sub-agents.

1.2. Sent Transfers
When sending transfers abroad, if a client does not have US dollar cash, banks and transfer companies are required to execute the transfer at the market average acquisition rate (TMA) (average selling rate of the banking system), published daily by the BRH.

Banks and transfer companies must prominently display the TMA in their premises. They must also ensure that all their service points managed by sub-agents display this rate in a visible location within their premises.

1.3. Resource Management
Transfer operators operating abroad are required to remit to their authorized agents in Haiti (banks and transfer companies) or their subsidiaries in Haiti the funds received from senders in US dollars.

The dollar counterpart of transfers paid in gourdes is distributed as follows:

• thirty percent (30%), without cost surcharge, to the BRH. The BRH will credit the gourde account of the bank or transfer company held with it for the equivalent of the dollars received, at the reference rate of the day of payment;
• forty percent (40%), without cost surcharge, to one or more financial institutions of the choice of the bank and transfer company, whose gourde accounts will be credited at the reference rate of the day of payment;
• thirty percent (30%) to the authorized agent (banks and transfer companies).

In addition to commissions and other fees agreed upon between the parties, banks and transfer companies must reimburse their sub-agents for the amount of transfers paid in gourdes according to the following modality:

• seventy percent (70%) in gourdes, and
• thirty percent (30%) in US dollars.

The BRH will ensure periodic replenishment of the market from the dollars captured on the one hand, and respond to requests for priority and strategic imports on the other.

2. Principles Related to Fund Transfer Services

Banks and transfer companies must sign representation contracts with sub-agents, allowing them to perform, on their behalf and under their full responsibility, the sending of funds received from clients or the payment of fund transfers.

These contracts must specify, among other things, the operations that sub-agents can perform on behalf of the bank or transfer company, the responsibilities of the parties, and the operational modalities related to the payment of transfers and the sending of funds.

When concluding representation contracts for transfer services with sub-agents, banks and transfer companies must:
a) ensure their honorability and integrity; b) establish their risk profile taking into account, among other things, the sector of activity, their geographical location, and their monthly turnover; c) monitor daily the transfer operations they perform in relation to their risk profile; d) assume full responsibility for their actions or omissions, as long as they relate to the transfer services provided by said sub-agent; e) ensure compliance with rules related to the fight against money laundering and terrorist financing; f) contribute to their training, particularly in matters of fighting money laundering and terrorist financing.

Commercial companies operating in the gambling sector, including lotteries, bingo halls, and casinos, cannot in any case be sub-agents of any financial institution.

Sub-agents must clearly indicate at their commercial establishments their status and the name of one or more financial institutions for which they operate. They must also prominently and legibly display the tariff conditions applied to clients at their counters.

Banks and transfer companies are responsible, vis-à-vis clients, for their network of sub-agents, notwithstanding any contrary contractual provision.

3. Control of Sub-Agents

Banks and transfer companies must establish the daily payment capacity for each sub-agent. They must ensure that the amount of transactions performed by said sub-agents corresponds to their payment capacity.

Banks and transfer companies must declare to the BRH the total amount of transfers paid by sub-agents.

Banks and transfer companies are required to enforce this circular through their sub-agents. In the event of non-compliance by a sub-agent with the provisions of this circular, they must send to the BRH quarterly a list of offenders and the measures taken against them. In the event of contract termination, the BRH must be informed, along with the reasons, no later than three (3) business days from the date the decision takes effect. The BRH will notify banks and transfer companies.

No sub-agent whose contract has been terminated for violation of the provisions of this circular may act as a representative of a financial institution for fund transfer services.

4. Reports

Banks and transfer companies are required to complete and send electronically to the BRH in Excel format:

• a quarterly report containing the list of all their service points including the following information: name of the representative, address, monthly transfer volume paid (Annex I).
  Submission deadline: no later than fifteen (15) days after the end of the quarter.
• a daily report on the amounts of transfers paid (Annex II).
  Submission deadline: the next business day at noon according to the reference date of the report.

5. Sanctions

In the event of non-compliance with the obligations defined in this circular, the concerned institution is subject to the following penalties:

a) Reliability of Information
At all times, the amounts declared in the forms provided in the annex must be those appearing in the institution's accounting books. If the amounts do not match, the BRH may, after investigation into the circumstances and nature of the violation, impose a penalty of 50% of the difference between the declared amounts and the amounts appearing in the accounting books.

b) Late Submission of Reports
Failure to provide, within the required timeframe, the compliance reports provided for in Section 4 of this circular, the concerned institutions incur a penalty of fifty thousand gourdes (HTG 50,000.00) per day of infraction. The penalty period extends from the day the reports should have been transmitted to the BRH to the day the BRH receives them.

c) Other
For any other infraction noted, the BRH will demand the immediate cessation of the incriminated practice, take administrative sanctions, notably a warning letter against the faulty institution, and may apply a fine of one hundred thousand gourdes (HTG 100,000.00) for each fact noted.

6. Repeal and Entry into Force

This circular repeals Circular 114-1 of June 19, 2020. It enters into force on October 1, 2020.

Port-au-Prince, September 18, 2020.

List of Annexes
Annex I - Quarterly Report on All Service Points
Annex II - Daily Report on Transfer Amounts Paid

ANNEX I
DECLARATION FORM
Quarterly Report
Name of Institution: Period: From to

Name of Representative
Location
Daily Payment Capacity
Payment Volume
Month 1
Payment Volume
Month 2
Payment Volume
Month 3

ANNEX II
DECLARATION FORM
Daily Report
Name of Institution:
Date: Reference Rate
(in gourdes)
Amount of transfers received on deposit accounts Total amount of transfers paid Total amount paid by sub-agents Amount to be remitted to the BRH (30%) - in dollars Amount to be credited by the BRH - in gourdes