Instruction No. 53 on Approval Conditions for Financial Companies, Their Directors, and Modification of Statutory Situations

BANQUE CENTRALE DU CONGO

LE GOUVERNEUR

INSTRUCTION NO. 53 ON THE CONDITIONS FOR THE APPROVAL OF FINANCIAL COMPANIES, THEIR EXECUTIVES, AND THE MODIFICATION OF THEIR STATUTORY SITUATIONS

The Central Bank of Congo,

Having regard to the Organic Law No. 18/027 of December 13, 2018, on the organization and functioning of the Central Bank of Congo, particularly Articles 10, 11, and 25;

Having regard to Law No. 22/069 of December 27, 2022, on the activity and supervision of Credit Institutions, particularly Article 167;

Having regard to Law No. 15/003 of February 12, 2015, on the leasing activity, particularly Articles 6 and 7;

Having regard to Law No. 22/068 of December 27, 2022, on the fight against money laundering and the financing of terrorism and the proliferation of weapons of mass destruction, particularly Titles I and III;

Enacts the following provisions:

TITLE I: GENERAL PROVISIONS

CHAPTER I: OBJECT AND SCOPE OF APPLICATION

Article 1:

The purpose of this Instruction is to define the required conditions and the applicable procedure for obtaining, from the Central Bank of Congo, an approval or authorization by the financial companies referred to in Article 2.

Article 2:

Without prejudice to specific contrary provisions, this Instruction applies to financial companies, including:

• leasing companies;
• factoring companies;
• guarantee companies;
• payment institutions providing the payment services referred to in Article 168 of Law No. 22/069 of December 27, 2022, on the activity and supervision of credit institutions, including electronic money institutions and financial messengers;
• specialized financial institutions, including investment banks, development banks, etc.

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CHAPTER II: DEFINITIONS

Article 3:

For the purposes of this Instruction, the following terms are defined as:

• administrator: member of the deliberative body designated by the General Assembly of shareholders;

• executive administrator: an administrator who is also a member of the executive body of the financial company;

• non-executive administrator: an administrator who is not a member of the executive body of the financial company;

• independent administrator: a non-executive administrator who is not related to the financial company. A member of the Board of Directors free of interest who contributes, through their competence and freedom of judgment, to the board's ability to fulfill its missions. They must be devoid of particular professional (significant shareholder, employee, business relationship, service provider, etc.) or personal ties of interest with the financial company and its shareholders;

• development bank: a financial institution that grants medium and long-term credits for the realization of economic development projects;

• investment bank: a financial company specialized in financial engineering operations, particularly mergers and acquisitions, initial public offerings, and financial placements;

• risk committee: a governance committee, emanating from the deliberative body, created to assist it in determining risk appetite, monitoring the implementation by the executive body of the risk appetite statement, and ensuring the supervision of the risk management function;

• deliberative body: the body responsible, on behalf of the shareholders, for defining the strategic direction of the financial company and the effective supervision of the management of its activities. It is constituted as a Board of Directors;

• executive body: the body responsible, on behalf of the deliberative body, for the day-to-day management of the financial company's activities and the effective steering of the implementation of the strategic objectives and risk policy set by the deliberative body. It corresponds to the General Management, the Management Committee, the Direction Committee, or the management, and is composed of at least two members, namely: the General Director and the Deputy General Director;

• sensitive function: an operational function linked to the core banking business or a support function requiring proven expertise, the disruption of which could cause significant risks to the financial company;

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• head of sensitive function: a senior executive of a financial company whose appointment is subject to the approval of the Central Bank of Congo, due to the sensitive operational nature of their function given the risks implied by their activity;

• essential services: financial services offered by the financial company, on the one hand, and sensitive functions, on the other hand, the interruption of which would seriously harm the normal functioning of said company;

• financial company: a legal entity under Congolese law whose activity consists, to the exclusion of any receipt of repayable funds from the public, in carrying out credit operations, performing payment operations, managing payment instruments, or conducting manual foreign exchange;

• factoring company: a financial company that habitually carries out operations by which it undertakes to collect and mobilize commercial receivables, either by acquiring said receivables or by acting as agent for the creditors, in the latter case with a guarantee of good performance;

• guarantee company: a financial company that habitually carries out operations consisting of substituting itself for the debtor in the event of the debtor's default, in exchange for remuneration.

CHAPTER III: OPERATIONS AND ACTS SUBJECT TO PRIOR APPROVAL AND AUTHORIZATION

Article 4:

Any legal entity under Congolese law wishing to carry out banking operations as a financial company in one of the categories listed in Article 2 of this Instruction must obtain the approval of the Central Bank of Congo.

In addition, financial companies are required to seek prior approval from the Central Bank of Congo for the following operations:

• the change of category of a financial company;
• participation in the share capital of a financial company;
• the appointment of members of the deliberative body;
• the appointment of members of the executive body;
• the appointment of heads of internal control functions;
• the appointment of heads of sensitive functions.

Article 5:

Financial companies are required to seek prior authorization from the Central Bank of Congo in the following cases:

• the modification of their statutes;

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- the merger, demerger, or sale of a business unit affecting a financial company;
- the sale, by a financial company, of all or, within the limits set by the Central Bank of Congo, part of its assets, clientele, or activity;
- the acquisition, by a financial company, of participations in a foreign enterprise;
- investment operations involving securities issued or guaranteed by a foreign state, an international organization, or a foreign enterprise;
- the opening, transfer, or closure of a branch or agency of the financial company on national territory or abroad;
- the voluntary dissolution of a financial company;
- the taking of participation, the exchange of shares, or any other operation that would have the effect of concentrating, directly or indirectly, for the benefit of the same natural or legal person, at least 20% of the voting rights in the financial company;
- any other strategic decision, such as derogations from the principles of organization of the internal control system, the outsourcing of internal control functions, the outsourcing of other essential service provisions, derogations from the organization of governance committees, or any other operation resulting in a significant modification of the financial company's situation.

Article 6:

The following are subject to prior information to the Central Bank of Congo:
- any development, modification, or extension of the activities carried out by the financial company;
- the opening, transfer, or closure of a counter of a financial company carrying out exclusively cash operations.
- at least one month before this operation, any acquisition or sale of shares or units, whether or not representing capital, in a financial company, with the indication of the identity of the transferor and the transferee.

Furthermore, the financial company notifies the Central Bank of Congo of its intention:
- to acquire or create, directly or indirectly, a subsidiary abroad carrying out an activity referred to in Article 60 of Law No. 22/069 of December 27, 2022, on the activity and supervision of Credit Institutions. This notification must contain information on the activities, organization, shareholding, and management of the company concerned;

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BANQUE CENTRALE DU CONGO

- to open a branch on the territory of another State in order to carry out all or part of the activities authorized to it in the Democratic Republic of Congo. This notification, accompanied by an activity program in which are indicated in particular the categories of operations envisaged, the structure of the organization of the branch, the domiciliation of correspondence in the country concerned, and the names of the branch executives.

CHAPTER IV: PROCEDURE FOR PRIOR APPROVAL AND AUTHORIZATION

Section 1: File Preparation

Article 7:

Any request for prior approval or authorization and any prior notification or information must be addressed in French to the Governor of the Central Bank of Congo.

This request or notification is supported by a file meeting the requirements of this Instruction, accompanied by the minutes of the deliberation of the competent body related to the request made.

The documents transmitted in support of the file referred to in paragraph 2 of this article must be authenticated by a notary, except for those issued by the competent public authorities.

Section 2: Examination of the File

Article 8:

The Central Bank of Congo notifies the applicant of the receipt of their request for approval or prior authorization.

It informs them, after preliminary examination, either of the completeness of their file or of the need to complete it with additional elements.

Article 9:

The Central Bank of Congo renders its decision within a period of 90 days from the receipt of the letter informing the applicant of the completeness of the file.

During its examination, the Central Bank of Congo may be required to ask the applicant to transmit additional elements. In this case, the transmission period for these elements is added to the initial 90-day period.

When a decision involves obtaining the opinion of a national or foreign regulatory authority, the period for the Central Bank of Congo to render its decision is extended by the response time observed by said authority.

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BANQUE CENTRALE DU CONGO

Article 10:

The Central Bank of Congo, if it deems it useful, may summon the representative(s) of the applicant for an interview as soon as a request for prior approval/authorization is introduced or on the occasion of prior information.

The Central Bank of Congo, depending on the risk profile of the requesting institution (new or existing), may attach additional conditions to its decision of approval or prior authorization, concerning in particular the share capital, governance structure, or operational organization.

TITLE II: APPROVAL

CHAPTER I: APPROVAL OF FINANCIAL COMPANIES

Article 11:

Approval as a financial company or the change of category of financial companies is subject to compliance with the requirements of legal texts and the entire prudential regulation applicable to them.

The request for approval is supported by a file consisting of the following elements:
- a letter of request for approval written in French and addressed to the Governor of the Central Bank of Congo;
- an original copy of the notarized statutes of the applicant;
- the duly notarized minutes of the constituent general assembly of the new company and the notarized mandate of the representatives of the legal persons, shareholders, partners, or members of the requesting company, empowering them to represent them at this constituent assembly;
- the minutes of the extraordinary general assembly of the legal person shareholders or partners authorizing them to participate in its share capital;
- the national identification number and an extract from the Commercial Register and Movable Credit Register of the applicant;
- the certificate of deposit, with a local bank, of the paid-up share capital at an amount at least equal to the minimum capital fixed by the Central Bank of Congo;
- the list of shareholders, partners, or members and executives;
- the elements allowing for the assessment of the integrity of shareholders, partners, or members, in particular the sworn declaration of non-involvement in money laundering, terrorism financing, and the proliferation of weapons of mass destruction;
- the elements allowing for the assessment of the integrity of members of the deliberative and executive bodies, heads of control functions, and other sensitive functions, in particular the Criminal Record Extract and the sworn declaration of non-involvement in money laundering, terrorism financing, and the proliferation of weapons of mass destruction;

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- the curriculum vitae of members of the deliberative and executive bodies, heads of control functions, and other sensitive functions, or any other element attesting to their professional competence and experience;

- the notarized statutes and the certified financial statements of the last three accounting years of the legal person shareholders, partners, or members;

- a document from the banking supervisory authority of the country of origin or residence, for foreign natural and legal persons, attesting to compliance with the conditions of exercise in said country;

- the location of the registered office, agencies, and other commercial establishments;

- a business plan for a minimum period of 3 years including the following elements:

    - the envisaged business model;

    - the strategic plan including the indication of envisaged partnerships and hypotheses for commercial, geographical, and sectoral development, the typology of products and services offered to clients, as well as realistic forecast financial statements, prepared according to current accounting standards;

    - the standard contracts of products and services offered to clients;

    - realistic projections regarding compliance with prudential regulation in the short and medium term;

    - the governance system;

    - the internal control and risk management system;

    - the system for combating money laundering, terrorism financing, and the proliferation of weapons of mass destruction;

    - the operational organization, including the organizational chart, the adequacy of staff, skills, technical and financial resources, and information systems;

    - the envisaged schemes for outsourcing essential service provisions;

    - the duly notarized minutes of the meeting of the deliberative body setting the activities to be developed and determining the tolerance and risk appetite policy.

Article 12:

The request for approval must also include a description of the procedures for the selection of shareholders, members of the deliberative and executive bodies, heads of control functions, and other sensitive functions.

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Article 13:

The statutes of the applicant must allow for appropriate governance, in accordance with current regulatory provisions.

CHAPTER II: APPROVAL OF SHAREHOLDERS, PARTNERS, OR MEMBERS

Article 14:

The applicant communicates to the Central Bank of Congo, for approval, the identity of all its effective shareholders, partners, or members.

To this end, it transmits to the Central Bank of Congo the identity, accompanied by a related document issued by the competent Public Administration, of natural or legal persons who, directly or indirectly, acting alone or in concert with others, hold at least one share of the share capital. This communication includes the indication of the proportions of the share capital and voting rights held by these persons.

Article 15:

Unless specific contrary provisions exist, financial companies are constituted as a multi-person anonymous company with a Board of Directors.

Article 16:

Any participation by a fund, consortium, or holding in the capital of a financial company requires the resolutive condition that it accepts, in advance, that its following linked entities be subject to both document and on-site control by the Central Bank of Congo, under its prerogatives as the Regulatory and Supervisory Authority for financial institutions of the Democratic Republic of Congo:

- the legal persons that directly or indirectly control the institution, installed in the Democratic Republic of Congo or abroad;

- the subsidiaries of these legal persons, installed in the Democratic Republic of Congo or abroad;

- any other enterprise or legal person belonging to the same group installed in the Democratic Republic of Congo or abroad.

Article 17:

The Central Bank of Congo may refuse approval when:

- even in the absence of a conviction, it considers that one or more shareholder(s) of the requesting institution present(s) significant risks, particularly in matters of combating money laundering, terrorism financing, and the proliferation of weapons of mass destruction;

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- the exercise of its mission of supervision of the requesting institution is likely to be hindered either by the existence of direct or indirect capital or control links between the requesting institution and other natural or legal persons, or by the existence of legislative or regulatory provisions of a State to which one or more of these persons belong;

- the information communicated does not allow for the identification of the beneficial owner(s) up to the highest level of the control chain or when the shareholding structure does not provide all guarantees of transparency;

- persons installed in high-risk and non-cooperative jurisdictions within the meaning of the Financial Action Task Force take participations in a financial institution in the Democratic Republic of Congo.

Article 18:

The applicant must possess a reference shareholder, partner, or member, a legal or natural person, providing all guarantees of reputation, ethical standing, financial capacity, and/or professionalism in the banking, economic, financial, or any other sector. This person must be able to meet their support obligations, particularly in case of difficulty.

The shareholder or partner, a legal or natural person, holding a participation greater than 50% of the capital of the financial company, enjoying adequate financial capacity and not demonstrating professionalism in the banking and/or financial sector, is considered a reference shareholder and must conclude a technical assistance contract with a partner of international renown operating in the banking and/or financial sector. This assistance contract must be concluded for a minimum duration of ten (10) years and submitted for prior approval to the Central Bank of Congo.

When no shareholder holds a fraction greater than 50% of the capital of the financial company, the applicant submits to the approval of the Central Bank of Congo a reference shareholder chosen among the legal persons holding its share capital and meeting the conditions listed in paragraph 1 of this article. In this case, all other shareholders are required to provide him with the necessary support at the deliberative body level. In the event of refusal by the Central Bank of Congo to approve the designated shareholder, the approval of the requesting financial company cannot be granted.

Article 19:

The reference shareholder is notably required to:

- prioritize involvement, without prejudice to the role of other shareholders, in the effective determination of the organization of the applicant and in the effective supervision of its management, particularly through the administrators who represent them within the deliberative body;

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- provide operational and financial support to the applicant to ensure permanently the means of its development, in accordance with the business plan that was submitted to the Central Bank of Congo during the request for approval and subsequently modified, if necessary;

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- produce all elements enabling the establishment of the adequacy of their expertise in the financial and banking domain, notably information on the banking or financial societies with which they have been associated. Failing this, the reference shareholder must produce partnership contracts with third-party entities possessing recognized expertise through which they will provide the applicant with the necessary professionalism and experience;

- primarily provide operational and financial support to the financial society to ensure its solvency and liquidity, notably in case of difficulty, without prejudice to the responsibility expected of all shareholders who are also required to contribute to the common effort.

**CHAPTER III: APPROVAL OF MEMBERS OF THE DELIBERATIVE BODY AND THE EXECUTIVE BODY AS WELL AS HEADS OF CONTROL FUNCTIONS AND OTHER SENSITIVE FUNCTIONS**

**Section 1: Common Provisions**

**Article 20:**

Members of the deliberative body and the executive body as well as heads of control functions and other sensitive functions must present all guarantees of honorability, professionalism, and competence necessary for the exercise of the missions assigned to them, as defined in the Instructions of the Central Bank of the Congo on this matter.

They must have a good command of the French language and must not have the status of Politically Exposed Person, within the meaning of Law n°22/068 of December 27, 2022, on combating money laundering and the financing of terrorism and the proliferation of weapons of mass destruction. If they acquire this status during their term, they must immediately resign from their positions within the financial society.

**Article 21:**

The deliberative body and the executive body must each be composed predominantly of members of Congolese nationality. Heads of control functions must also be predominantly of Congolese nationality.

Financial societies already approved have a deadline of four (4) years from the publication of this Instruction to progressively comply with the provisions of paragraph 1 above.

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CENTRAL BANK OF THE CONGO

**Article 22:**

The application for approval or renewal of the mandate of a member of the deliberative body or executive body of foreign nationality is subject to the transmission of elements on the composition of the concerned body attesting that it is predominantly constituted by Congolese nationals.

The approval of a head of control function of foreign nationality is subject to the transmission of proof that heads of control functions taken as a whole are predominantly of Congolese nationality.

**Article 23:**

The requesting institution is required to submit to the Governor of the Central Bank of the Congo an application file for approval in favor of any member of the deliberative body and executive body as well as any head of control functions and other sensitive functions comprising notably the following elements:

- curriculum vitae;
- certified copies of obtained diplomas;
- Extract from the Criminal Record dated less than three months ago and for persons who have resided abroad during the three years preceding the approval application, an equivalent document, duly legalized, issued by the host country;
- residence certificate;
- nationality certificate or certified copy of the valid passport;
- Certificate of good conduct;
- copies of notarized minutes of meetings of the deliberative and executive bodies having ruled on his designation;
- a document from the banking supervisory authority of the country of origin or residence, for foreign natural persons, attesting compliance with the approval conditions in said country;
- a sworn declaration by the interested party summarizing all administrative or judicial procedures currently ongoing or closed, lawsuits currently ongoing or closed to which he was a party, the list of decisions taken by any regulatory authority against him, including if applicable refusals of membership in a professional organization and the status of disciplinary decisions currently ongoing or closed taken against him;
- remuneration and other benefits linked to the function;
- any element enabling attestation of his capacity to exercise the functions for which approval is sought.

The Central Bank of the Congo may refuse the approval of a member of the deliberative body, a member of the executive body, a head of control functions, or a head of other sensitive functions when:

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CENTRAL BANK OF THE CONGO

- it considers that the candidate presents significant risks notably in matters of combating money laundering and the financing of terrorism and proliferation, even in the absence of a conviction;

- the applicant does not possess a document from the banking supervisory authority of the country of origin or residence attesting compliance with the approval conditions in said country for foreign natural persons. In this case, the applicant must proceed with the recruitment of a candidate of Congolese nationality and submit his approval file to the Central Bank of the Congo.

**Article 24:**

The cessation of functions of the persons covered by Article 20 of this Instruction must be communicated without delay to the Central Bank of the Congo.

The financial society transmits the minutes of the meeting of the competent body approving the cessation of functions of the responsible person as well as the reasons for this cessation of function. It informs the Central Bank of the Congo of any subsequent or antecedent litigation.

**Section 2: Approval of members of the deliberative body**

**Article 25:**

The exercise of the mandate of members of the deliberative body is subject to prior approval by the Central Bank of the Congo.

The duration of the mandate of members of the deliberative body and the conditions for its renewal are fixed in the Instruction of the Central Bank of the Congo relating to corporate governance of financial societies.

**Article 26:**

When a member of the deliberative body is a legal entity, the requirements of Article 20 of this Instruction apply to the natural person representing it.

**Article 27:**

Independent directors must present all guarantees of independence vis-à-vis approved shareholders and related persons. They must swear on oath that they present a situation conforming to the requirements of the instruction relating to the governance of financial societies.

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CENTRAL BANK OF THE CONGO                                                                 CONTINUED, PAGE 13

Article 28:

Financial societies are required to pay particular attention to gender parity in the composition of the deliberative body by reserving a quota of 50% of administrators for the female gender, to be reached in stages over a horizon of five years. Financial societies ensure the achievement of this quota notably during the renewal of the mandate of Directors.

Section 3: Approval of members of the executive body

Article 29:

The exercise of the mandate of members of the executive body is subject to prior approval by the Central Bank of the Congo.

The duly notarized minutes of designation of members of the executive body must clearly specify the extent of the powers of each of them, employment contracts, and clauses relating to remuneration and benefits in kind in accordance with the provisions of the instruction of the Central Bank of the Congo relating to the governance of financial societies.

Article 30:

The duration and conditions for the renewal of members of the executive body are fixed in the Instruction of the Central Bank of the Congo relating to corporate governance of financial societies.

Article 31:

During the renewal of the mandate of a member of the executive body, the requesting institution communicates to the Central Bank of the Congo notably the notarized minutes of the deliberative body having decided on the renewal, the Extract from the Criminal Record dated less than three months ago, and the performance contract evaluation report as provided for by the instruction of the Central Bank of the Congo relating to the governance of financial societies.

Financial societies are required to pay particular attention to gender parity in the composition of the executive body by reserving a minimum quota of 33% of the members of the executive body for women, to be reached in stages over a horizon of five years. Financial societies ensure the achievement of this quota during the renewal of the mandate of members of the executive body.

Section 4: Approval of heads of internal control functions

Article 32:

Appointments to the functions of head of second-level control of operational activity, compliance, risk management, and internal audit are subject to prior approval by the Central Bank of the Congo.

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CENTRAL BANK OF THE CONGO                                                                 CONTINUED, PAGE 14

The functions of head of permanent second-level control in its three components and those of head of periodic third-level control must be entrusted to senior management cadres, presenting all guarantees of morality, honorability, competence, and professional experience. They must hold a hierarchical rank immediately inferior to general management.

Article 33:

The approval of heads of control functions is subject to the following conditions:

- not be related to the financial society, within the meaning of Instruction n°51 of the Central Bank of the Congo;  
- not be in the case of ascendant and descendant links of the first degree with members of the deliberative and executive bodies, and not present any risk of conflict of interest with these persons, nor with the financial society;  
- not be an agent of the financial society, nor of an enterprise belonging to the group to which the financial society belongs;  
- not be a social officer in a society related to the financial society;  
- not be a supplier of the financial society;  
- not have been an auditor or statutory auditor during the three (3) last years of several financial societies of the same category as the one seeking approval.

Article 34:

To support an approval request, the applicant transmits the minutes of the meeting of the deliberative body approving the nomination proposed by the executive body as well as the employment contract, remuneration elements, and other elements required in accordance with this Instruction.

The requesting institution must, furthermore, annex to the file, notably the charter governing the function, the job description, internal procedures, staff numbers, and means allocated to the function as well as the organizational chart showing the hierarchical and functional attachment, in addition to the reinforced functional link with the deliberative body.

Section 5: Approval of heads of sensitive functions

Article 35:

Appointments to the sensitive functions listed below are subject to prior approval by the Central Bank of the Congo. These include notably:

- the head of IT security;

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CENTRAL BANK OF THE CONGO                                                                 CONTINUED, PAGE 15

- the head of IT;  
- the head of combating money laundering and the financing of terrorism;  
- the head of credit;  
- the head of finance and accounting.

TITLE III: PRIOR AUTHORIZATIONS

CHAPTER I: STATUTORY MODIFICATIONS

Article 36:

Any modification of the statutes of a financial society is subject to prior authorization by the Central Bank of the Congo. To this end, the applicant presents a file, accompanied by the minutes of the deliberation of the competent body in relation to the request made, showing the proposed modifications and the detailed statement of the reasons for the decision.

CHAPTER II: MERGER OR SPLITTING OPERATIONS

Article 37:

When two approved financial societies, or an approved financial society and a non-approved legal entity, envisage a merger or splitting operation, each of the approved entities must present a complete file, validated by the deliberative body, indicating the conditions under which this operation will take place.

The file must include a detailed analysis relating to legal consequences, including a compliance analysis, notably with regard to legislation on combating money laundering, the financing of terrorism, and the proliferation of weapons of mass destruction, the impact on governance, modifications of the business model, consequences on the internal control and risk management system, as well as effects on the financial structure and prudential situation.

The Central Bank of the Congo, after analyzing the file comprising obligatorily the complete assessment report of the assets, liabilities, and off-balance-sheet commitments of the two entities by an approved auditor or accredited external auditor, where applicable, grants, where applicable, prior authorization to proceed with the operation.

CHAPTER III: TAKING PARTICIPATION IN AN ENTITY REGISTERED ABROAD

Article 38:

Any taking of participation by a financial society in an entity registered abroad is subject to prior authorization by the Central Bank of the Congo. To this end, the applicant is required to transmit a complete file comprising:

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CENTRAL BANK OF THE CONGO

• the description of the economic and legal logic of the operation, validated by the deliberative body, notably showing the impact on the financial and prudential situation, on the risk profile, as well as possible remediation measures;

• detailed information on the entity in which a taking of participation is envisaged, notably its statutes, an extract from the commercial register dated less than three months ago, the detailed list of its shareholding, the indication of its beneficial owners with their identity documents, its activity, its certified financial statements covering the last three exercises, where applicable the identity of the supervisory authority from which it depends;

• the results of the valuation diligence;

• the description of the measures taken to ensure effective internal control of the entity namely first, second, and third-level control;

• the analysis of the device for combating money laundering and the financing of terrorism.

The Central Bank of the Congo may require any complementary information deemed useful.

CHAPTER IV: OPERATIONS OF CESSION OR ACQUISITION OF ASSETS, CLIENTELE, OR ACTIVITY

Article 39:

Any operation below of cession or acquisition of assets, clientele, or activity beyond the limits fixed by this Instruction must be the object of prior authorization by the Central Bank of the Congo:

• operation concerning patrimonial assets: amount equivalent to 10% of Tier 1 own funds;

• operation concerning operating financial assets, activity, or clientele: amount equivalent to 10% of the total balance sheet, whether it concerns financial assets or liabilities, deposits, or credits concerned.

Operations having a common overall logic must be appreciated globally.

Below the aforementioned thresholds, any operation significantly modifying the activity or risk profile notably in matters of money laundering and the financing of terrorism and the proliferation of weapons of mass destruction, or the financial balances of the applicant must be the object of a prior authorization request to the Central Bank of the Congo.

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CENTRAL BANK OF THE CONGO

Article 40:

The prior authorization request file must comprise notably the following information:

• the notarized minutes of the deliberative body;

• the description of the economic logic of the operation;

• the description of the legal conditions of the operation;

• the compliance analysis of the operation, notably with regard to legislation on combating money laundering and the financing of terrorism and the proliferation of weapons of mass destruction;

• the assessment report of the assets, liabilities, or goodwill elements concerned, established by an auditor, enumerating the acquired or ceded elements, and justifying their recognition at fair value;

• the assessment of the impact of the operation on the financial structure, forecasted results, prudential situation, operational configuration, and risk profile as well as consequent risk management measures.

CHAPTER V: PLACEMENT IN FOREIGN SECURITIES

Article 41:

Any placement operation bearing on foreign securities is subject to prior authorization by the Central Bank of the Congo.

These operations can only be authorized for securities issued or guaranteed by a foreign state, an international organization, or a foreign company listed on a regulated market or securities that present the necessary guarantees of liquidity and valuation.

Article 42:

The authorization request file must comprise notably the following information:

• the notarized minutes of the deliberative body having ruled on the question;

• the characteristics of the projected operation, namely: the nature of the securities, the listing venue, the prospectus or the characteristic of the securities, the liquidity of the securities, the volume of the operation, the valuation methods, the compliance analysis; notably with regard to legislation on combating money laundering and the financing of terrorism and proliferation;

• the internal control device to be put in place for the surveillance and mastery of market risks.

563, Boulevard Colonel Tshatshi - Kinshasa – Gombe Email : sgouverneur@bcc.cd - Website : http://www.bcc.cd

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CENTRAL BANK OF THE CONGO

CHAPTER VI: OPENING, TRANSFER, OR CLOSURE OF A SUBSIDIARY, BRANCH, AGENCY, AND REPRESENTATION OFFICE ON NATIONAL TERRITORY OR ABROAD

Article 43:

Any modification in the list of implantations of the network of branches or agencies of a financial society is subject to prior authorization by the Central Bank of the Congo.

These modifications concern:

• any opening of a subsidiary, branch, agency, or representation office abroad;

• any transfer of a subsidiary, branch, agency, or representation office abroad;

• any closure of a subsidiary, branch, agency, or representation office abroad.

Prior authorization by the Central Bank of the Congo for the opening of a subsidiary or representation office abroad is given to the requesting institution under the suspensive condition of obtaining, within a deadline of one year, the necessary authorizations from the supervisory authority of the host country.

Article 44:

The prior authorization request file accompanied by information relating to the objectives pursued and the modalities for exercising the activities of financial societies must comprise notably the following elements:

• the notarized minutes of the deliberative body having ruled on the question;

• forecasted profitability statements and assessment of assets and liabilities over a period of at least three years, notably with regard to deposit collection and credit distribution, supported by underlying hypotheses;

• the modalities for taking into account the modification of the financial society's network of implantations in the risk management and internal control structure.

CHAPTER VII: GENERAL ORGANIZATION OF THE FINANCIAL SOCIETY

Section 1: Derogation from internal control organization principles

Article 45:

Any financial society not belonging to a financial group may solicit a derogation to merge certain second-level internal control functions in accordance with Instruction n°17 of the Central Bank of the Congo.

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CENTRAL BANK OF THE CONGO

To this end, the financial society accompanies the request with a complete file comprising notably the following documents:

• the notarized minutes of the deliberative body having ruled on the question;
• an organizational chart showing hierarchical and functional links;
• the internal control charter and internal procedures relating to control and the functionalities of automated internal control systems;
• the job description, mission letter, and/or employment contract as well as the curriculum vitae of the head of the merged functions, showing their diplomas, training received, and professional experience.

Article 46:

In case of change of holder of a mandate or function subject to approval or significant modification in the risk tolerance strategy, risk appetite policy, or geographic or functional perimeter of activities exercised, the financial society must solicit a new authorization to maintain potentially the fusion of second-level permanent control functions.

Article 47:

The Central Bank of the Congo reserves the right to reject the fusion request. In this case, a maximum deadline of two (2) years is granted to the financial society to comply with the provisions of Instruction n°17 of the Central Bank of the Congo.

Article 48:

The Central Bank of the Congo may withdraw an authorization granted at any time if circumstances require, notably in the event of a change in the financial institution's risk profile, its development strategy, or its legal or economic environment.

Section 2: Outsourcing of Internal Control Functions

Article 49:

In application of Instruction No. 17 of the Central Bank of the Congo, first-level control and compliance control cannot be outsourced.

Article 50:

The outsourcing of second-level control of operational activity and risk management can only take place within the belonging group, after prior agreement of the Central Bank of the Congo, subject to the conformity of the processes to be implemented on site by the requesting institution, in application of Instructions No. 17 and 22 of the Central Bank of the Congo.

563, Boulevard Colonel Tshatshi - Kinshasa – Gombe Email: sgouverneur@bcc.cd - Website: http://www.bcc.cd

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CENTRAL BANK OF THE CONGO

Article 51:

In application of Instruction No. 17 of the Central Bank of the Congo, the partial outsourcing of third-level control is subject to the prior agreement of the Central Bank of the Congo.

The use by the subsidiary of a group audit resource on its own initiative or that of said group for the conduct of a specific mission requires prior authorization from the Central Bank of the Congo.

The use of an audit resource outside the belonging group for the conduct of a specific mission requires prior authorization from the Central Bank of the Congo.

Article 52:

The financial institution is required, in support of the authorization request for the partial outsourcing to the belonging group of certain second or third-level internal control functions, to produce all elements demonstrating that its organization respects all the related provisions as provided for by Instructions No. 17 and 22 of the Central Bank of the Congo.

Article 53:

The intra-group organization of outsourced functions must provide all guarantees regarding the following requirements in particular:

• supervision by a supervisory authority, under conditions at least equivalent to those of the Central Bank of the Congo, of the belonging group to which the internal control functions will be outsourced;

• the capacity of the belonging group to carry out internal control and risk management missions remotely with shared steering with the subsidiary licensed in the Democratic Republic of Congo and respecting current standards and required quality standards;

• the capacity of the group to make regular trips within the subsidiary, in order to guarantee sufficient presence of internal controllers or risk managers regarding the activities carried out in the Democratic Republic of Congo;

• the implementation of an appropriate reporting system ensuring appropriate information flow to the group and information feedback to the subsidiary;

• the access of the Central Bank of the Congo to all necessary documentary and on-site information for the exercise of its mission, including, where applicable, within the belonging group. The contacts of the belonging group responsible for the implementation of outsourced functions must be available to the Central Bank of the Congo by all means and at first request within the framework of its supervision mission.

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