Circular 114 on Fund Transfer Operations Without Consideration

Bank of the Republic of Haiti
CIRCULAR No. 114
TO BANKS AND MONEY TRANSFER HOUSES
This circular defines the standards regarding fund transfer operations without consideration.

1. Payment of Transfers
   Banks and money transfer houses are required to pay transfers received in the currency indicated by the sender.
   When paying a transfer, banks and money transfer houses must identify their regular or occasional client, in accordance with the provisions of current laws and regulations, and provide the client with a receipt of the transaction. The receipt must contain, among other things, the amount and the currency in which the transfer was paid, the name of the bank or money transfer house, as well as the address of the service point that performed the operation. In the event that the beneficiary of a transfer requests payment in a currency other than that indicated by the sender, namely the national currency, the financial institutions designated by this circular must:
   a) if it is a banking establishment, execute the transaction at the day's buying rate displayed visibly in its premises; b) if it is a money transfer house, execute the operation at the day's buying rate indicated by the latter. Money transfer houses must ensure that all their offices or service points managed by third parties, called "sub-agents," display the exchange rate in a visible place in their premises.

2. Principles Related to Fund Transfer Services
   Banks and money transfer houses must sign representation contracts with third parties or sub-agents, to whom they allow to perform, on their behalf and under their full responsibility, the sending of funds received from customers 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 money transfer house, the responsibilities of the parties, the operational modalities regarding the payment of transfers and the sending of funds, and the modalities regarding operations made in the local currency.

When concluding representation contracts for transfer services with commercial enterprises, banks and money transfer houses must:
a) ensure their honorability and integrity; b) establish their risk profile taking into account, among other things, the business sector, the geographical zone, 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 enterprise; e) ensure compliance with rules related to the fight against money laundering and the financing of terrorism; f) contribute to their training, notably in matters of fighting money laundering and the financing of terrorism. Commercial enterprises operating in the gambling sector, notably lotteries, bingo halls, casinos, and all other categories of enterprises evolving in this sector, cannot in any case be sub-agents of any financial institution. The commercial installations of sub-agents must clearly show their status and the name of the financial institution or institutions for which they operate. Sub-agents must display in a visible and legible manner at their counters the tariff conditions applied to customers. Banks and money transfer houses are responsible, vis-à-vis clients, for their network of sub-agents, notwithstanding any contrary contractual provision.

3. Control of Sub-Agent Operations
   Banks and money transfer houses must establish for each sub-agent their daily payment capacity for transfers. They must ensure that the amount of transactions performed by said sub-agents corresponds to their payment capacity. Sub-agents of banks and money transfer houses are not foreign exchange dealers and cannot in any way serve as intermediaries for third parties for the purpose of buying and selling currencies. Payments made in the local currency upon request of the transfer beneficiary must be reported separately at the end of the day by sub-agents and executed in accordance with the contractual provisions linking the two parties. Banks and money transfer houses are required to ensure that these measures are applied by their sub-agents. In the event of non-compliance by a sub-agent with the provisions of this circular, banks and money transfer houses are required to send to the BRH quarterly the list of offenders and the measures taken against them. In the event of contract termination, the BRH must be informed as well as the reasons at the latest three (3) working days from the date the decision takes effect. The BRH notifies banks and money transfer houses. 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 money transfer houses are required to complete and send to the BRH the following reports:

• Weekly report on the total amount of transfers that were subject to exchange transactions (Annex I)
  Submission deadline: every Monday before noon
• Quarterly report containing the list of all their service points including the following information: name of the representative, address, monthly paid transfer volume (Annex II)
  Submission deadline: at the latest 15 days after the end of the quarter

5. Sanctions
   In the event of non-compliance with the obligations defined in this circular, the concerned institution is exposed to the following penalties:
   a) Reliability of information
   At all times, the amounts declared in the form provided in the annex must be those appearing in the accounting books of the institution. If the amounts do not match, the BRH may, after investigation into the circumstances and the 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 deadline, 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) Others For any other infraction noted, the BRH will demand the immediate cessation of the incriminated practice, will take administrative sanctions notably a letter of reprimand against the faulty institution and may apply a fine of one hundred thousand gourdes (HTG 100,000.00) for each fact noted.

Any fine will be deducted from the balance of one of the accounts of the faulty bank at the BRH. On the other hand, the payment of any fine by a money transfer house will be made by a cashier's check payable to the Bank of the Republic of Haiti, at the latest three (3) working days, after receipt of the notice requiring payment. In the event of non-payment within the deadlines, additional late penalties will be applied, namely two thousand five hundred gourdes (HTG 2,500.00) per day of delay.

6. Transitional Provision
   Banks and money transfer houses have a period of two (2) months from the publication of this circular to comply with it, notably and without limitation by: modifying ongoing contracts, implementing operational procedures, sensitizing sub-agents, etc.

7. Repeal and Entry into Force
   This circular repeals Circular BRH/CIR/94#40 of September 7, 1994 and Circular Letter No. 8 of June 9, 2011. It enters into force as of August 26, 2019.
   Port-au-Prince, July 10, 2019
   Jean Baden Dubois
   Governor

List of Annexes
Annex I – Foreign Exchange Transactions Form
Annex II – Declaration Form

ANNEX I
MONEY TRANSFER HOUSES
FOREIGN EXCHANGE TRANSACTIONS FORM
Name of the institution: ________________________ Period: From _______ to ___________ Monday Tuesday Wednesday Thursday Friday Saturday Sunday Purchase of currencies – Amount in US$ Negotiating Bank Negotiating Bank Selling Rate Authorized Signature: ___________________________ Date: ________________________________________

ANNEX I
BANKS
FOREIGN EXCHANGE TRANSACTIONS FORM
Name of the institution: ________________________ Period: From _______ to ___________ Monday Tuesday Wednesday Thursday Friday Saturday Sunday Purchase of currencies – Amount in US$ Buying Rate Authorized Signature: ___________________________ Date: ________________________________________

ANNEX II
DECLARATION FORM
Quarterly Report
Name of the institution: ________________________ Period: From _______ to ___________ Name of the representative Location Daily payment capacity Payment volume Month 1 Payment volume Month 2 Payment volume Month 3 HTG USD HTG USD HTG USD Authorized Signature: ___________________________ Date: ________________________________________