Decree-Law No. 15/2017 Approving the Rules for the Introduction of the New Dobra Family

Tuesday, October 3, 2017 Number 144
OFFICIAL GAZETTE OF THE REPUBLIC
SUMMARY
GOVERNMENT
Decree-Law No. 15/2017
Approves the Rules for the Introduction of the New Dobra Family.
SÃO TOMÉ AND PRÍNCIPE

No. 144 – October 3, 2017 SÃO TOMÉ AND PRÍNCIPE - OFFICIAL GAZETTE 1897 GOVERNMENT Decree-Law No. 15/2017

Whereas, within the framework of the ongoing Monetary Reform approved through Decree-Laws 06 and 11/2016, dated October 21 and November 16 respectively, the characteristics and quantities of the new banknotes and coins to circulate in São Tomé and Príncipe, as well as their respective conversion rate for the New Dobra Family, have been defined; Whereas it is necessary to define the date of entry into circulation of the New Family, as well as regulate the gradual substitution process of the Current Family, providing for an initial period of simultaneous circulation of both Families until June 30, 2018; Taking into account that the legal construction of the New Dobra Family must rest on three essential pillars: confidence, credibility, and permanence; Confidence, because it is essential given the structural transformation of the market that the introduction of the new currency represents and the minimization of risk margin relative to future expectations. Credibility, because it is essential to guarantee the security of the new currency so that it fulfills its useful content as a reference for transactions. Permanence, because it is essential to provide economic agents with a structural future reference that is not subject to ideological shifts. The monetary reference must, by virtue of its intrinsic characteristics, point toward infinity as a store of value or a credible unit of account. Whereas further, the timely definition of the legal framework for the “New Dobra” is fundamental to the decision-making process of economic agents, thereby guaranteeing internal and external stability, and consequently strengthening the importance and contribution of the Currency in the national economic development process; It becoming necessary to regulate aspects that aim, above all, to ensure the contractual stability of existing commercial instruments from October 10, 2017; to provide for the essential rules of the transition of financial public administration to the new Dobra reality; to effectuate other adjustments considered priority in the legal system, taking into account the principles of continuity of instruments and contractual relations, neutrality, transparency, and full information regarding transition rules in the introduction of the “NEW DOBRA”; to establish the fundamental rules to be observed in this process, namely regarding rounding and indexing, book designation, the simultaneous circulation period, and the need for dual price indication, in respect of the principles of legal certainty, transparency, and contractual balance; In these terms, exercising the competence provided for in paragraph c) of Article 111 of the Constitution of the Republic, the Government determines the following:

Article 1.
Object
This decree defines the rules for the introduction of the New Dobra Family and regulates, in particular, aspects regarding book designation, rounding, simultaneous circulation period, dual price indication, rules applicable to accounting and fiscal matters, as well as the continuity and legal certainty of existing contracts.

Article 2.
Scope
The provisions of this Decree-Law apply to the Monetary Reform during the transition process to the New Dobra Family.

Article 3.
Concepts
For the purposes of this Decree-Law, it is understood that:
a) Legal tender: the capacity of banknotes and coins to be used as a means of payment in a given territory, where their acceptance at nominal value is mandatory. Banknotes and coins of Dobras are the only legal tender means in STP; b) Discharge capacity: the capacity of banknotes and coins to settle debts and, in general, to effect payments; c) Dual price indication: the presentation for the same good or service of the price in the book designation of the Dobra of the New Family (nDb), followed by the book designation of the Dobra of the Current Family (Db).

Article 4.
Book Designation

1. The Dobra of the New Family, resulting from the conversion referred to in Decree-Law No. 11/2016 of November 16, shall henceforth be designated in book terms as (nDb) for the whole number part, and nct for the decimal part.
2. The book designation referred to in this article shall remain valid until June 30, 2018.
3. Upon expiry of the simultaneous circulation period provided for in paragraph 1 of Article 12 of this Decree-Law, the Dobra of the New Family shall revert to the representation established in the prevailing Monetary Law.

Article 5.
Conversion and Rounding

1. The Dobra of the Current Family (Db) is converted into the Dobra of the New Family (nDb) by dividing its value by 1,000 (one thousand) units, in accordance with Article 4 of Decree-Law No. 11/2016 of November 16.
2. The Dobra of the New Family (nDb) is subdivided into centimes, corresponding to two decimal places.
3. If the result of converting the Dobra of the Current Family to the Dobra of the New Family has a decimal part with more than two decimal places, rounding shall be performed as follows:
   a) By excess: when the third digit of the decimal part is equal to or greater than 5.
   Examples: 24,555.00 Db/1000 = 24.555 Db is rounded to 24.56 nDb; 24,556.00 Db/1000 = 24.556 Db is rounded to 24.56 nDb; b) By defect: when the third digit of the decimal part is less than 5. Example: 24,554.00 Db/1000 = 24.554 Db is rounded to 24.55 nDb.

Article 6.
Automatic Nature of Conversion

1. From January 1, 2018, amounts deposited in Dobras of the Current Family (Db) in any banking institution shall be automatically converted into Dobra of the New Family (nDb).
2. The institutions referred to in the preceding paragraph must, at the time of conversion, open new records with the abbreviation nDb, into which all balances already converted to the Dobra of the New Family shall be transferred.

Article 7.
Effects of Conversion on Banking and Foreign Exchange Operations

1. From January 1, 2018, all banking operations must be processed and posted with reference to the Dobra of the New Family (nDb), and all banking institutions must adjust their respective IT platforms accordingly.
2. To ensure full transparency and security in the conversion process, all banking institutions must ensure that their customers have:
   a) From January 1 to June 30, 2018, balances available simultaneously in Dobras of the Current Family (Db) and in Dobra of the New Family (nDb); b) From January 1 to June 30, 2018, statements available in Dobra of the New Family (nDb) and in Dobras of the Current Family (Db).
3. As a consequence of the dual price indication principle, entities authorized to conduct foreign exchange business must present their quotations and exchange rate tables with simultaneous reference to the Dobra of the New Family (nDb) and the Dobra of the Current Family (Db).

Article 8.
Treatment of Banking Accounting
The accounting aspects of banking institutions shall be defined by regulation of the Central Bank.

Article 9.
Treatment of Checks and Other Credit Instruments

1. Checks issued prior to January 1, 2018, expressed in Dobras of the Current Family (Db), shall remain valid until June 30, 2018, and the conversion rate established by Law shall be applied upon their regularization by banking institutions.
2. Other credit instruments, notably bills of exchange and promissory notes, with an issue date prior to January 1, 2018, expressed in Dobras of the Current Family (Db), shall remain valid for their specified duration and are regularized by banking institutions upon collection, in Dobra of the New Family (nDb), applying the conversion rate established by Law.
3. From January 1, 2018, banking institutions must provide their users with new check specimens, incorporating introduced changes, and deposit slips adjusted to the Dobra of the New Family (nDb).
4. Aspects not covered in this article shall be defined opportunistically by regulation issued by the Central Bank.

Article 10.
Extension of the Regime
The regime provided for in this decree regarding banking institutions is applicable, with necessary adaptations, to other financial institutions.

Article 11.
Charges
The conversion referred to in this decree shall not entail any costs or charges for holders of bank accounts within the national banking system, or possessors of notes, coins, or credit instruments susceptible to conversion.

Article 12.
Simultaneous Circulation
From January 1 to June 30, 2018, banknotes and coins of the Dobra of the Current Family (Db), at the date of entry into force of this decree, shall circulate simultaneously with banknotes and coins of the Dobra of the New Family (nDb).

Article 13.
Dual Price Indication

1. From October 10, 2017, all prices of goods and services shall be indicated simultaneously in Dobra of the New Family (nDb) and in Dobras of the Current Family (Db).
2. All economic agents and other entities providing goods or services for payment must adjust their IT platforms, documents, papers, and other commercial supports to fulfill the objective of dual price indication by December 31, 2017.
3. The dual price indication provided for in this article is mandatory during the period from January 1 to June 30, 2018.
4. Between October 10 and December 31, 2017, dual price indication is optional and may be voluntarily adopted by the entities referred to in paragraph 2 of this article.
5. The regime provided for in this article applies to commercial documents, namely invoices, invoice extracts, delivery notes, and receipts, without prejudice to accounting and fiscal provisions.
6. Dual price indication must give prominence to the value expressed in Dobra of the New Family (nDb) through visible characters by size, color, font, or other appropriate means, regardless of its relative position.

Article 14.
Rounding
Whenever the documents referred to in paragraph 5 of the preceding article present discriminated values, rounding resulting from conversion shall be performed on the total.

Article 15.
Accounting and Fiscal Treatment

1. The accounting and fiscal aspects regarding the introduction of the New Dobra Family shall be defined by order of the Minister responsible for Finance.

Article 16.
Accounting Treatment for State Bodies and Institutions

1. The accounting processes of state bodies and institutions regarding operations occurring from January 1 to June 30, 2018, must be expressed in Dobra of the New Family (nDb) with reference to the Current Family (Db).
2. Final balances to be determined on June 30, 2018, must be converted into Dobra of the New Family (nDb) and considered as initial balances for July 1, 2018, applying the conversion rate and its respective rounding rule.
3. From July 1, 2018, accounting processes shall be prepared in Dobra of the New Family (nDb).
4. The General State Account for 2018 shall be prepared in Dobra of the New Family (nDb), so as to reflect operations carried out during the entire 2018 economic year.

Article 17.
Effects on Contracts and Other Legal Acts

1. The conversion of the Dobra of the Current Family (Db) to the Dobra of the New Family (nDb) does not prejudice the existence, validity, and effectiveness of contracts and other legal acts whose effects extend beyond July 1, 2018.
2. From the date of entry into circulation of banknotes and coins of the Dobra of the New Family (nDb), all contracts concluded and other obligations incurred in Dobras of the Current Family (Db) are considered assumed in Dobra of the New Family (nDb), with respective values paid according to the conversion rule.

Article 18.
Sanction Regime
Violation of the provisions of this decree is punishable under applicable legislation.

Article 19.
Withdrawal from Circulation
From January 1, 2018, to December 31, 2019, banknotes and coins of the Current Family of the Dobra shall be withdrawn from circulation according to modalities defined by regulation of the Central Bank.

Article 20.
Doubts and Omissions
Doubts and omissions resulting from the interpretation and application of this Decree-Law shall be resolved by Government Order.

Article 21.
Enter into Force
This decree enters into force on October 10, 2017.

Reviewed and approved in Council of Ministers on August 1, 2017.- Prime Minister and Head of Government, Dr. Patrice Emery Trovoada; Minister of the Presidency of the Council of Ministers and Parliamentary Affairs, Dr. Afonso da Graça Varela da Silva; Minister of Foreign Affairs and Communities, Mr. Urbino José Gonçalves Botelho; Minister of Defense and Internal Administration, Mr. Arlindo Ramos; Minister of Justice, Public Administration and Human Rights, Drª. Ilza dos Santos Amado Vaz; Minister of Finance, Commerce and Blue Economy, Dr. Américo d'Oliveira dos Ramos; Minister of Infrastructure, Natural Resources and Environment, Eng. Carlos Manuel Vila Nova; Minister of Agriculture and Rural Development, Mr. Teodorico Campos; Minister of Education, Culture, Science and Communication, Dr. Olinto da Silva e Sousa Daio; Minister of Employment and Social Affairs, Dr. Emílio Fernandes Lima; Minister of Health, Drª. Maria de Jesus Trovoada dos Santos; Minister of Youth and Sports, Dr. Marcelino Leal Sanches.

Promulgated on October 3, 2017.
Published.
President of the Republic, Evaristo do Espirito Santo Carvalho.

OFFICIAL GAZETTE NOTICE
Correspondence regarding the publication of announcements in the Official Gazette, its subscription, or lack thereof, must be addressed to the Information and Reproduction Center of the Ministry of Justice, Public Administration and Human Rights – Telephone: 2225693 - P.O. Box No. 901 – E-mail: cir@cstome.net São Tomé and Príncipe. - S. Tomé.