LAW NO. 002/2002 OF FEBRUARY 2, 2002 ON PROVISIONS APPLICABLE TO SAVINGS AND CREDIT COOPERATIVES

Source: Official Gazette No. special May 2002

Important Notice to Users
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STATEMENT OF REASONS

The purpose of this Law is to define a specific institutional framework for savings and credit cooperatives intended to safeguard the particularities inherent in their organization and operation methods, without calling into question their status as Credit Institutions.

It is important to recall that to date, cooperatives are governed by the provisions of the Decree of March 24, 1956, relating to indigenous cooperatives.

However, it appears that when this legislative text was drafted, savings and credit cooperatives had not yet come into existence.

Indeed, the first savings and credit cooperatives in the Democratic Republic of Congo were successfully established from the beginning of the 1970s.

In 1985, a first effort to regulate these financial structures was attempted by the Central Bank, which issued an instruction aimed at regulating their activity, pursuant to the powers recognized to it by the Ordinance-Law No. 72-004 of January 14, 1972, relating to the protection of savings and the control of financial intermediaries.

The recognition of savings and credit cooperatives as Credit Institutions will occur with the Law relating to the activity and control of Credit Institutions.

This legal text completely remodeled the national financial system, by defining a unique framework applicable to all companies sharing the performance of banking operations, without however affecting the particularities of each category of Credit Institution.

This Law incorporates into its provisions the main particularities that make the Savings and Credit Cooperative a particular type of Credit Institution, with the vocation to provide assistance to its members by ensuring them sufficient access to financial services.

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TITLE ONE:
DEFINITIONS, SCOPE AND APPLICATION MODALITIES

This title comprises two chapters which treat successively the definitions of the key concepts used in this Law, on the one hand, as well as its scope and application modalities, on the other hand.

CHAPTER I: DEFINITIONS

Savings and credit cooperatives are groups of persons endowed with legal personality, which pursue primarily a social objective through the services rendered to their members. This aspect distinguishes them from commercial companies whose activities have as their primary goal the realization of profit.

Furthermore, the legislator has, for reasons of efficiency, structured the cooperative system in an overall architecture comprising the following three levels:

• the primary savings and credit cooperative, acronym COOPEC;
• the central savings and credit cooperative, acronym COOCEC;
• the FEDERATION of central savings and credit cooperatives, abbreviated Federation.

These umbrella structures are also called upon to ensure the cooperative training and education of members, at the same time as they should serve as a relay to favor efficient supervision by the Central Bank over the entire network.

CHAPTER II: SCOPE AND APPLICATION MODALITIES

Savings and credit cooperatives are credit institutions within the meaning of the Banking Law.

However, the Banking Law applies to savings and credit cooperatives only to the extent that this Law contains express provisions to that effect.

Since this Law is specific to savings and credit cooperatives, its provisions prevail over those of the Banking Law which is the general common framework for all Credit Institutions.

The provisions of the Decree of March 24, 1956, relating to indigenous cooperatives, do not apply to savings and credit cooperatives.

The savings and credit cooperative is governed by the principle of cooperation and its central values of equality, equity, and mutual aid. (Article 9)

TITLE TWO:
CONSTITUTION, APPROVAL AND SHARE CAPITAL

Title II applies mainly to primary savings and credit cooperatives (COOP EC). It comprises three chapters dealing with the constitution, approval, and share capital of primary savings and credit cooperatives.

The constitution of a primary savings and credit cooperative requires the holding of an inaugural general meeting during which the founding members adopt its statutes and sign a declaration of foundation.

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The declaration of foundation and the statutes are filed with the Registry of the High Court in the jurisdiction where the primary savings and credit cooperative has its registered office (articles 10 and 11).

It obtains legal personality only after its approval by the Central Bank. The conditions for obtaining this approval are set out in articles 15 to 19 of the Law.

The share capital of the primary savings and credit cooperative is constituted of social shares whose value is determined by the statutes. (Article 20)

TITLE THREE:
MEMBERS - GOVERNING BODIES - MANAGEMENT

Title III defines in four chapters the conditions for access to membership of savings and credit cooperatives as well as the modalities of their organization and functioning.

1. CONDITIONS FOR ACCESS TO MEMBERSHIP (CHAPTER 1 - Articles 22 to 27)

While affirming that COOP ECs are mainly composed of natural persons, the legislator does not exclude the possibility for a legal person to become a member of this type of Credit Institution.

The main condition to be met to access the membership of a primary savings and credit cooperative is the sharing of a "common link" defined in article 2 of this Law.

Additional conditions are also provided, notably the subscription and payment of at least one social share, the signing of an application for membership, etc. (art. 22).

COOPECs may also provide in their respective statutes a category of auxiliary members (art. 23).

Since membership in a COOPEC is free, the legislator has also safeguarded the freedom for any member to withdraw from the COOPEC.

The resigning member is however required to settle their commitments towards the COOPEC. Likewise, a resignation may be refused for a maximum of two years, when it results in the de facto dissolution of the COOPEC.

2. ORGANIZATION AND FUNCTIONING OF THE PRIMARY SAVINGS AND CREDIT COOPERATIVE (CHAPTER II to IV - Articles 28 to 57)

The bodies of the COOPEC are:

• The General Assembly;
• The Board of Directors;
• The Supervisory Board;
• The Credit Commission.

The Legislator fixes the attributions of each body and leaves to COOPECs the freedom to determine the rules of functioning in their statutes and internal regulations.

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Among the principles retained by the legislator in this framework, it is necessary to indicate:

• the prohibition of cumulating management and control functions by the same body;
• all executives are elected for a renewable three-year term which they exercise free of charge, except for the manager who is salaried.

The legislator also fixes the strict criteria of morality and competence that a member must meet to claim to become an executive of a COOPEC.

TITLE FOUR:
MANAGEMENT RULES, FINANCIAL DISCLOSURE AND REGISTERS

The activity of savings and credit cooperatives, like that of other Credit Institutions, generates risks capable of endangering the savings of their members.

Through the provisions of articles 58 to 61, the Legislator intends to establish the fundamental principles of a prudential regulation of the activities of savings and credit cooperatives in order to guarantee sound management and financial solidity of these Credit Institutions, which must now present themselves as an alternative offered to the monetary authority, in the banking of population layers not yet served.

Tax incentives are also provided to promote the activities of savings and credit cooperatives and ensure the social promotion of their members, without hindering the normal play of competition that should exist in the national financial system (article 62).

The protection of members' savings also requires the implementation of mechanisms, norms, and rules intended to ensure transparency in the management of savings and credit cooperatives in order to allow the supervisory authority, control bodies, members, and any interested third party to obtain any necessary information (articles 63 to 66).

Savings and credit cooperatives are thus required to produce and publish, as the case may be, documents, reports, and information in the forms and following a periodicity fixed by the Central Bank.

TITLE FIVE:
SELF-CONTROL, EXTERNAL CONTROL AND SUPERVISION

The control bodies set up by the legislator have the mission of ensuring that savings and credit cooperatives respect the rules of sound management, in view of better protection of members' savings.

1. Control within a network (Self-Control)

Any COOCEC not affiliated or any Federation is required to carry out on-site and documentary control as well as inspection of COOPECs or COOCECs, as the case may be, affiliated with it (article 69).

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Inspectors of the COOCEC or the Federation have the right, within the framework of the inspection mission, to communication of all documents and information necessary for the exercise of their function without professional secrecy being opposable to them (article 71).

They may, by conservatory measures, suspend for a duration not exceeding three months any executive following any serious act harming the interests of the savings and credit cooperative or its members (articles 73).

2. External control and supervision

The Central Bank monitors the conformity of the operations of savings and credit cooperatives with the regulations in force, based on the periodic documents they establish and the reports resulting from the inquiries of the network inspectors to which they are affiliated.

The Central Bank may carry out or have carried out documentary and on-site control of a savings and credit cooperative in order to examine in particular the conditions of operation and the quality of its financial situation.

It must carry out or have carried out, at least once a year, the inspection of unaffiliated COOPECs and must ensure their documentary and on-site control.

The Central Bank's control may also extend to companies controlled by the savings and credit cooperative.

The verification of an unaffiliated primary savings and credit cooperative is carried out by a Statutory Auditor, designated by the members gathered in the annual general meeting for a one-year renewable term (article 76).

TITLE SIX:
PROFESSIONAL SECRECY AND WITHDRAWAL OF APPROVAL

This title comprises two chapters devoted, the first, to professional secrecy and the second, to the withdrawal of approval.

CHAPTER I: PROFESSIONAL SECRECY

Any person who participates or has participated in the management or control of a savings and credit cooperative is invested with a function of trust and may, for this reason, be considered as a depositary of the secrets confided to them in the context of their profession.

The general and absolute character of professional secrecy must, consequently, subject them criminally to the obligation of silence.

However, the Legislator brings limitations to this obligation not to reveal professional secrecy,

Thus, professional secrecy cannot be opposed either to the Central Bank, nor to the judicial authority acting within the framework of a criminal procedure.

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CHAPTER II: WITHDRAWAL OF APPROVAL

The Central Bank pronounces the withdrawal of approval of a savings and credit cooperative by virtue of the administrative and disciplinary powers it exercises over all Credit Institutions.

1. Withdrawal of approval as an administrative measure

Withdrawal of approval may occur in the following cases:

• at the express request of the COOPEC;
• when the start of activities does not occur within the year following the approval decision or when the COOPEC has not exercised any activity for more than one year;
• upon the transfer of the COOPEC's activities;
• in case of merger or split.

2. Withdrawal of approval as disciplinary sanctions

Withdrawal of approval is pronounced in case of serious or repeated breach of this Law, subject to the respect of the rights of the defense.

TITLE SEVEN:
MERGER, SPLIT, DISSOLUTION AND LIQUIDATION

The operations of merger, split, dissolution, and liquidation of savings and credit cooperatives are carried out under the supervision of the Central Bank.

Specifically regarding liquidation, when, at the closing, a surplus remains, the General Assembly may decide to allocate it to the reimbursement of members' social shares.

The balance potentially available after this operation is devolved to another savings and credit cooperative or to works of social interest.

The assets of a savings and credit cooperative, which are often the product of the savings of several generations of cooperators, should, upon its liquidation, serve the interests of the community rather than those of individuals who, moreover, by adhering to the cooperative ideal, do not pursue an essentially lucrative goal.

TITLE EIGHT:
GROUPING OF SAVINGS AND CREDIT COOPERATIVES

The legislator retains as umbrella structures of savings and credit cooperatives, the central savings and credit cooperative, COOCEC in acronym, and the FEDERATION of savings and credit cooperatives Federation in acronym.

These umbrella structures are endowed with legal personality distinguishing them clearly from their members who cannot be, except in exception, primary savings and credit cooperatives, for COOCECs, and central savings and credit cooperatives, for federations.

Like COOPECs, COOCECs and Federations can only exercise their activity after their approval by the Central Bank.

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COOCECs and Federations have the double role of ensuring the cooperative education of their members and helping the Central Bank in the control of the entire networks to which they are respectively affiliated.

TITLE NINE:
SANCTIONS

As a reminder, the legislator provides for disciplinary, administrative, and criminal sanctions to which savings and credit cooperatives as well as any person who participates directly or indirectly in their administration, management, or control are subject.

The Central Bank may constitute itself a civil party before the judicial instances seized of violations of the provisions of this Law.

TITLE TEN:
TRANSITIONAL AND FINAL PROVISIONS

The Central Bank defines, as needed, by regulatory means, the application modalities of this Law (article 105).

The control of the legality of acts performed by the Central Bank in this context is the competence of the administrative courts established by the legislation in this matter.

Savings and credit cooperatives duly approved and in activity before the entry into force of this Law are considered as approved upon simple declaration to the Central Bank.

They have a deadline of one year, from the date of entry into force of this Law, to comply with its provisions.

LAW

The Constituent and Legislative Assembly, Transitional Parliament, has adopted; The President of the Republic promulgates the law whose text follows:

TITLE ONE:
DEFINITIONS, SCOPE AND APPLICATION MODALITIES

CHAPTER I: DEFINITIONS

Article 1:

For the purposes of this Law, are considered as:

1. "Savings and Credit Cooperatives": any group of persons, with variable capital, endowed with legal personality and founded on the principles of union, solidarity, and mutual aid and having primarily as its object to collect the savings of its members and grant them credit;

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2. "Primary Savings and Credit Cooperative" or "COOPEC": any savings and credit cooperative mainly composed of natural persons and counting at least twenty members, and operating according to the principles enumerated in article 9. The denomination of a primary savings and credit cooperative includes the acronym "COOPEC";

3. "Central Savings and Credit Cooperative" or "COOCEC": any savings and credit cooperative whose members are exclusively COOPECs. The denomination of a central savings and credit cooperative includes the sign "COOCEC";

4. "Federation of Central Savings and Credit Cooperatives" or "FEDERATION": any savings and credit cooperative formed exclusively of COOCECs.

5. "NETWORK": a set of savings and credit cooperatives affiliated with the same central cooperative or FEDERATION according to the grouping modalities defined by this Law.

Article 2:

In this Law, the following expressions are understood:

1. "Common Link": the identity of profession, employer, place of residence, association, or objective;

2. "Executive": a member of the board of directors, the supervisory board, the credit commission, and the manager;

3. "Banking Law": Law relating to the activity and control of Credit Institutions.

4. "Central Bank": Central Bank of Congo.

CHAPTER II: SCOPE AND APPLICATION MODALITIES

Article 3:

This Law applies to savings and credit cooperatives exercising their activities on the territory of the Democratic Republic of Congo.

Article 4:

The Banking Law applies to savings and credit cooperatives governed by this Law only to the extent that the latter contains express provisions to that effect.

Article 5:

Savings and credit cooperatives constitute a Credit Institution within the meaning of article 1 of the Banking Law and fall into the categories of credit institutions provided for in article 2 of said Law.

Article 6:

The clarifications concerning banking operations provided for in article 6, the first paragraph of article 7, and article 8 of the Banking Law also apply to savings and credit cooperatives.

However, in accordance with the second paragraph of article 3 of the Banking Law, deposits made with savings and credit cooperatives are not transferable.

Article 7:

No one may claim in their social denomination or trade name one of the following appellations

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or a combination of these: "savings and credit cooperative", "primary savings and credit cooperative" or "COOPEC", "central savings and credit cooperative" or "COOCEC" and "Federation of central savings and credit cooperatives", nor use them for their activities, nor create the appearance of such quality, without having been previously approved under the conditions provided for in articles 15 to 19.

Any notice of change of denomination must be communicated to the Central Bank and to the competent High Court.

Article 8:

The savings and credit cooperative cannot exercise any activity other than collecting the savings of its members and granting them credit, except under the conditions determined by the Central Bank.

In this case, these operations must remain of limited importance compared to the overall main activities and are deemed not to constitute the operation of a business or a means of profit.

Subject to the first paragraph, the activities of the savings and credit cooperative are reserved for its members.

Article 9:

The savings and credit cooperative is governed by the principle of cooperation and its central values of equality, equity, and mutual aid, self-determination, and democratic control.

It acts according to the following cooperative action rules:
1° membership is free and voluntary;

2° the number of members is not limited;
3° members enjoy the same voting right according to the principle "one person, one voice" regardless of the number of social shares they hold; 4° a member cannot vote by proxy; 5° interest on social shares is limited; 6° annual overpayments are first paid to the general reserve within the limits provided in the statutes, then the balance is distributed to members pro rata of the operations carried out by each of them with the savings and credit cooperative; 7° actions aiming at the cooperative education of members are privileged.

TITLE TWO:
CONSTITUTION, APPROVAL AND SHARE CAPITAL

CHAPTER I: CONSTITUTION

Article 10:

The COOPEC is constituted, in accordance with this Law, in the form of a cooperative with variable capital having primarily as its object to collect the savings of its members and grant them credit.

The constitution of a COOPEC requires the holding of an inaugural general meeting having notably as its object to rule on the object of the COOPEC, its denomination, and its registered office.

The inaugural general meeting must also establish the list of subscribers to the share capital, approve the draft statutes, and proceed to the election of the members of the bodies.

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The founding members must sign, during the inaugural meeting, a declaration mentioning the denomination of the COOPEC, its registered office, the common link, the names, profession, and domicile of the signatories as well as the denomination of the COOCEC to which the COOPEC may eventually affiliate.

Article 11:

The Foundation Declaration referred to in article 10 must be signed by at least twenty persons capable of contracting, and filed with the Registry of the High Court in the jurisdiction where the COOPEC has its registered office.

The Declaration must be accompanied by the statutes of the COOPEC.

Article 12:

The statutes of the COOPEC define in particular:
1° The object, denomination, registered office, and geographic area of intervention; 2° The common link; 3° The rights and obligations of members; 4° The lifespan of the COOPEC; 5° The nominal value as well as the conditions for acquisition, transfer, and repayment of shares; 6° The conditions and procedures for admission, suspension, resignation, or exclusion of members; 7° The conditions for members' access to COOPEC services; 8° The liability of members towards third parties; 9° The bodies, their role, composition, and mode of operation; 10° The minimum and maximum number of members of the bodies, their powers, the duration of their term, and the conditions for their renewal or dismissal; 11° The rules and standards of financial management as well as the distribution of annual surpluses, subject to Article 59; 12° The control of the COOPEC.

Article 13:

Any modification of the statutes must be adopted by the Extraordinary General Meeting by a decision taken by a two-thirds majority of the votes cast by the members present.

This modification is subject to the approval of the Central Bank within one month from the date of the General Meeting that ruled on the modification. It is then filed with the clerk of the competent court. A copy of the modification is transmitted to the COOCEC or the Federation, as the case may be.

CHAPTER II: APPROVAL

Article 14:

The primary savings and credit cooperative must, before exercising its activities on the territory of the Democratic Republic of Congo, be previously approved by the Central Bank, under the conditions provided for in Articles 15 to 19.

The approval confers legal personality upon it.

Article 15:

The application for approval is submitted to the Central Bank. The approval file includes the following information and documents:

1° The statutes duly signed by the founders;
2° The minutes of the Constitutive General Meeting;

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3° The declaration of foundation provided for in Article 10; 4° The names, addresses, and professions of the managers; 5° The documents attesting to the payments made for subscriptions to the capital; 6° The forecasts for activities and organizational implementation; 7° The details of the technical and financial means as well as human resources that the COOPEC intends to implement regarding its objectives and needs; 8° The accounting and financial rules and procedures; 9° All other documents and information likely to clarify the decision of the Central Bank.

Article 16:

In the process of examining the approval application, the Central Bank is authorized to collect all information and documents deemed useful for the processing of the application.

Article 17:

The application for approval is deposited at the place indicated by the Central Bank.

In the case of a COOPEC in the process of affiliating with a COOCEC, the application for approval may be introduced by the latter to the Central Bank.

Article 18:

Upon receipt of the approval application, the Central Bank issues a receipt. The examination of the approval application may be entrusted to other structures or persons under the conditions specified by the Central Bank.

Article 19:

Approval is granted within 90 days from the date mentioned on the receipt; if this deadline is exceeded, the cooperative is deemed approved.

The act of approval is published, at the expense of the applicant, in the Official Journal and in at least one major national press organ.

The act of approval specifies the activities that the COOPEC may exercise.

Refusal of approval is notified to the applicant by the Central Bank within the same deadline as that fixed in the first paragraph.

CHAPTER III: SHARE CAPITAL

Article 20:

The share capital of the COOPEC consists of shares whose nominal value is determined by the statutes.

The share capital varies according to the evolution of the value and number of shares as well as the number of members.

Article 21:

The shares must be fully paid up.

They are named and non-negotiable; they are transferable only according to the provisions of the statutes. The shares are attachable, except for the minimum required to obtain the status of member, and to the extent that their attachment does not lead to the dissolution of the COOPEC. The shares may be remunerated within the limits set by the General Meeting.

TITLE THREE:
MEMBERS - GOVERNING BODIES - MANAGEMENT

CHAPTER I: MEMBERS

Article 22:

Any legal or natural person capable of contracting who:

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1° shares the common link, as defined in Article 2; 2° subscribes to and pays for at least one share; 3° signs an application for membership, except in the case of a founder; 4° undertakes to respect the statutes and regulations of the COOPEC; 5° pays the membership fee fixed, if applicable, by the General Meeting; 6° is admitted by the Board of Directors.

Article 23:

The COOPEC may provide in its statutes for a category of auxiliary members. These members are natural or legal persons who do not meet the conditions provided for in Article 22 for the admission of members.

The statutes further determine the conditions for their admission as well as their rights and obligations, subject to the following paragraph.

These members have the right to attend Meetings, but cannot vote or hold any position within the COOPEC.

Article 24:

A member may withdraw, provided that he is not a borrower or endorser of a loan. However, a resignation may be refused for a maximum of two years when it results in the de facto dissolution of the COOPEC. The decision refusing the resignation of a member may be subject to an appeal before the General Meeting.

Article 25:

The Board of Directors may exclude any member who does not respect the principles of cooperation as defined in this Law, the statutes, or the internal regulations of the COOPEC, or who jeopardizes the proper functioning of the COOPEC. The decision to exclude a member may be subject to an appeal before the General Meeting.

Article 26:

Regarding the debts of the COOPEC, the financial liability of members is engaged up to the amount of their shares.

Article 27:

Loss of member status gives rise to the settlement of their claims and obligations towards the COOPEC.

CHAPTER II: BODIES

Article 28:

The COOPEC is endowed with the following bodies:

• The General Meeting;
• The Board of Directors;
• The Supervisory Council;
• The Credit Commission.

The statutes and internal regulations of the COOPEC specify the rules of operation of its bodies.

SECTION I: GENERAL MEETING

Article 29:

The General Meeting is the supreme body of the COOPEC. It is constituted by all members convened in accordance with the Statutes.

Article 30:

The General Meeting has competence in particular to:

1. ensure the good administration and proper functioning of the COOPEC;

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2. modify the statutes and internal regulations of the COOPEC;
3. modify the registered office and the common link of the COOPEC;
4. approve the reports of the other bodies;
5. elect and dismiss the members of the COOPEC bodies;
6. decide on the allocation of annual overpayments;
7. define the credit policy of the COOPEC;
8. create reserves and any structure it deems useful for the realization of the object of the COOPEC;
9. deal with all other questions related to the organization and functioning of the COOPEC.

Article 31:

Excluding the provisions relating to the modification of the statutes, the election of the members of the bodies, the approval of the accounts, and the allocation of results, the General Meeting may delegate some of its powers to any other body of the COOPEC.

Article 32:

The members meet in Ordinary General Meeting at least once a year, mainly within the three months following the closing of each financial year, in particular to:

1. adopt the activity report of the year;
2. examine and approve the accounts of the year;
3. give discharge to the members of the management bodies;
4. elect the members of the bodies;
5. appoint an auditor, if applicable.

Article 33:

The members may meet in Extraordinary General Meeting convened at the initiative of:

1. the Board of Directors of the COOPEC;
2. at least one-third of the members of the COOPEC;
3. the Supervisory Council of the COOCEC to which the COOPEC is affiliated;
4. the Supervisory Council of the COOPEC;
5. the Central Bank.

Only the questions appearing in the notice of convocation may be the subject of deliberations of the Extraordinary General Meeting.

SECTION II: BOARD OF DIRECTORS

Article 34:

The Board of Directors of the COOPEC is composed of at least five directors. However, the statutes of the COOPEC may provide for a higher odd number of directors which cannot exceed nine.

No employee of the COOPEC can be part of the Board of Directors. The manager attends with a consultative vote at the meetings of the Board of Directors, for which he also assumes the secretariat.

Article 35:

The Board of Directors exercises, within the limits of the statutes and internal regulations, the powers generally or specifically delegated to it by the General Meeting.

To this end, it must in particular:
1° define the management policy of the resources of the COOPEC;

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2° ensure compliance with legal, regulatory, and statutory provisions; 3° facilitate the work of inspectors dispatched by the Central Bank, by the COOCEC or by the Federation, as the case may be; 4° promote, by any useful measure, the economic, social, and cooperative education of members; 5° rule on appeal on the decisions of the Credit Commission regarding a member; 6° propose solutions for the amicable settlement of disputes; 7° implement the decisions of the General Meeting; 8° report periodically on its mandate to the General Meeting.

Article 36:

The Board of Directors meets in the forms provided for by the statutes and internal regulations of the COOPEC.

Article 37:

The majority of the directors constitutes the quorum of the Board of Directors. The decisions of the Board of Directors are taken by a majority of the directors present.

SECTION III: SUPERVISORY COUNCIL

Article 38:

The Supervisory Council is composed of three members elected by the General Meeting.

Article 39:

The Supervisory Council is responsible for monitoring the operations of the COOPEC. It has access to all documents and can obtain all the information it requires.

Article 40:

The Supervisory Council is responsible in particular for:

1. verifying the assets and commitments of the COOPEC;
2. controlling the operations resulting from the decisions of the credit commission;
3. submitting its recommendations to the Board of Directors;
4. ensuring that the operations of the COOPEC are controlled periodically and in accordance with Articles 69, 74, 75, and 76;
5. convening an Extraordinary General Meeting if it considers that the Board of Directors is slow to take the measures required by the situation;
6. ensuring that the ethical rules applicable to the COOPEC are respected.

The Supervisory Council of a COOPEC not affiliated adopts the rules relating to the protection of the interests of the COOPEC and its members.

SECTION IV: CREDIT COMMISSION

Article 41:

The Credit Commission is composed of three members.

Article 42:

The majority of the members constitutes the quorum of the Credit Commission. The Manager of the COOPEC ex officio ensures the secretariat and attends, with a consultative vote, the meetings.

Article 43:

The Credit Commission is responsible for managing the distribution and repayment of credit in accordance with the policies and procedures defined in this regard.

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The decisions of the Credit Commission are taken unanimously.

Any member of the COOPEC may appeal to the Board of Directors against a decision of the Credit Commission.

SECTION V: COMMON PROVISIONS FOR GOVERNING, MANAGEMENT, AND CONTROL BODIES

Article 44:

Within a COOPEC, the functions of management and control are exercised by distinct bodies.

Article 45:

The term of office of the members of the Board of Directors, the Supervisory Council, and the Credit Commission is three years, renewable each year by one-third of the members.

The statutes fix the procedures for renewal.

Article 46:

The functions exercised by the members within the bodies are voluntary.

Only the expenses incurred by the members of the bodies in the exercise of their functions can be reimbursed to them under the conditions fixed by the General Meeting.

Apart from such reimbursements, no direct or indirect advantage can be granted to them in any form whatsoever.

Article 47:

The members of the bodies exercise their mandate until the election of their successors.

Any vacancy within a body is filled for the unexpired term of the mandate by a member elected by the General Meeting.

Article 48:

The Supervisory Council and the Credit Commission transmit, at the end of the financial year of the COOPEC, their activity reports to the Board of Directors and present them at the annual General Meeting.

CHAPTER III: MANAGERS

Article 49:

No one can be a manager of a COOPEC if he:

1. is not a member of the COOPEC;
2. has a dispute with the COOPEC or with the COOCEC to which the COOPEC is affiliated;
3. exercises a paid activity within the COOPEC or the network, except regarding the manager;
4. holds, other than as a member, any interest in the savings and credit cooperative, or exercises another function likely to call into question his impartiality;
5. is not of good conduct and good morals;
6. has been convicted in the Democratic Republic of Congo or abroad as an author, accomplice, or for attempt of one of the following offenses:
   a. counterfeiting; b. counterfeiting or falsification of banknotes, public instruments, or marks;
   c. counterfeiting or falsification of seals,

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stamps, punches, and marks; d. forgery and use of forgery in writings; e. theft, extortion, misappropriation or abuse of confidence, fraud, handling, or petty theft; f. simple or fraudulent bankruptcy, fictitious circulation of commercial instruments; g. issuance of a check without provision; h. corruption or extortion;  
i. money laundering;  

7. has already lost the status of manager of a savings and credit cooperative following a serious breach or gross misconduct;
8. has been convicted of an offense under this Law or exchange regulations;
9. has been declared bankrupt, except rehabilitation in his favor, even if the bankruptcy opened abroad;
10. has taken part in the administration, direction, or day-to-day management of a Credit Institution whose forced liquidation has been ordered or whose bankruptcy has been declared.

When the decision resulting in one of the prohibitions provided for in this article is subsequently withdrawn or overturned, the prohibition ceases by right, unless the new decision is subject to appeal.

Article 50:

No one can be a manager of a savings and credit cooperative if he exercises functions of responsibility in a competing establishment, having wholly or partially the same corporate object. Agents of the Central Bank cannot occupy a permanent position within a Cooperative.

Article 51:

No one can be a manager in several COOPECs, whether they are or are not affiliated with the same COOCEC.

Likewise, in a COOPEC, COOCEC, or Federation, no one can be a member of several bodies at the same time.

Article 52:

Managers cannot obtain credits or other services dispensed by the savings and credit cooperative under more advantageous conditions than those benefiting other members.

The same applies to employees or any other interested or related person to a manager within the meaning of ethical rules.

Article 53:

Managers are financially responsible, individually or jointly, for faults committed in the exercise of their functions.

Article 54:

A member of a body may resign from his functions in the forms and conditions fixed by the statutes.

A member of a body may be suspended or dismissed by the Board of Directors for serious fault, notably for violation of legal, regulatory, or statutory provisions.

The dismissed member loses the right to exercise any function within the COOPEC or the network.

Article 55:

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A person who has lost the status of manager of a savings and credit cooperative following a serious breach or gross misconduct cannot be elected manager of a COOPEC, a COOCEC, or a Federation.

The same applies to any employee of a savings and credit cooperative.

CHAPTER IV: MANAGEMENT

Article 56:

The manager is appointed by the Board of Directors, which fixes the terms of his engagement and dismissal, the nature of his contract, the amount of his remuneration as well as the other benefits that may be granted to him.

He exercises his functions under the authority of the Board of Directors.

Article 57:

The manager is responsible for the day-to-day management of the COOPEC. The extent of his powers is determined by the internal regulations of the COOPEC.

TITLE FOUR:
MANAGEMENT RULES, FINANCIAL DISCLOSURE, AND REGISTERS

CHAPTER I: MANAGEMENT RULES

Article 58:

The savings and credit cooperative must ensure the maintenance of the balance of its financial structure as well as, in the case of the COOCEC and the Federation, that of the savings and credit cooperatives affiliated with them.

Article 59:

For the application of Article 58, the savings and credit cooperative must respect the following standards, the elements taken into account in their calculation as well as the calculation methods being defined by instruction of the Central Bank.

1. constitute a general reserve by an annual withdrawal of at least 15% on the net surpluses before rebate of each year, after imputation of any deficit carried forward;
2. cover, at all times, medium and long-term uses with stable resources;
3. ensure that its available, realizable, and mobilizable short-term values represent permanently, at least 80% of the total of its exigible liabilities and the outstanding amount of its short-term commitments by signature;
4. ensure that the total outstanding amount of loans granted to its managers does not exceed 20% of the total of its members' deposits;
5. ensure that the risks it carries cannot exceed double the total of its members' deposits;
6. not take, from a single member, risks for an amount exceeding 10% of the total of its members' deposits.

Article 60:

For the purposes of paragraphs 5° and 6° of Article 59, "risk" means all loans granted and all commitments by signature taken by the savings and credit cooperative.

The risks carried by funders, on affected resources, are not covered by paragraphs 5° and 6° of Article 59.

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Article 61:

The standards provided for in paragraphs 2°, 4°, 5°, and 6° of Article 59 may be subject to derogations from the Central Bank.

CHAPTER II: TAX INCENTIVES

Article 62:

The savings and credit cooperative is exempt from all taxes and duties related to its savings collection and credit distribution operations. The member of the savings and credit cooperative is also exempt from all taxes on shares and on the income from his savings.

CHAPTER III: FINANCIAL DISCLOSURE

Article 63:

The financial year of a savings and credit cooperative begins on January 1 and ends on December 31 of each year, except for the first year which starts from the date of obtaining approval.

Article 64:

Within 60 days following the end of the financial year, the Board of Directors has prepared, for approval by the General Meeting, an annual report which includes, in addition to information on the activities of the COOPEC, the certified statements established according to the standards of the Central Bank.

Article 65:

The Board of Directors of the COOPEC sends the annual report, as the case may be, to the COOCEC or the Federation to which it is affiliated, which is responsible for preparing the annual report on a consolidated basis for the network.

The financial statements and annual reports of affiliated savings and credit cooperatives, prepared on a consolidated basis, are communicated to the Central Bank within a period of six months following the closing of the year.

Unaffiliated COOPECs transmit, within the same deadline, their certified annual reports and financial statements to the Central Bank.

Article 66:

The COOPEC must produce all documents, reports, and information in the form, content, and periodicity fixed by the Central Bank.

It transmits copies of said documents, reports, and information to the COOCEC to which it is affiliated. If applicable, the same applies to the COOCEC towards the FEDERATION.

CHAPTER IV: REGISTERS

Article 67:

The savings and credit cooperative must keep and preserve at its registered office, books or registers whose contents and conditions of access are determined by the internal regulations.

Article 68:

A member may consult the documents filed in the register or obtain extracts or copies in the cases and according to the conditions fixed by the internal regulations.

TITLE FIVE:
SELF-CONTROL, EXTERNAL CONTROL, AND SUPERVISION

CHAPTER I: SELF-CONTROL

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Article 69:

Any unaffiliated COOCEC or any Federation is responsible for ensuring the document and on-site control of the operations of COOPECs or COOCECs, as the case may be, affiliated with it.

To this end, it may issue any manual of procedures conforming to the standards issued in this matter by the Central Bank.

The unaffiliated COOCEC or the Federation is required, as the case may be, to proceed or have the financial statements certified and to inspect, at least once a year, the COOPECs and COOCECs affiliated with it.

Article 70:

The inspection aims, in particular, to evaluate the financial policies and practices of savings and credit cooperatives, as well as their internal control system, and to ensure the reliability of their financial statements and compliance with the provisions of this Law and its implementing measures.

Article 71:

Inspectors from the COOCEC or the Federation, as the case may be, have the right, within the framework of the inspection mission, to access all documents and information necessary for the exercise of their functions, without professional secrecy being invoked against them.

Article 72:

Observed anomalies must be the subject of a report accompanied by recommendations addressed to the Board of Directors of the concerned COOPEC and to the COOCEC to which it is affiliated. A copy of this report is transmitted to the Central Bank.

Article 73:

For the purpose of an investigation, the COOCEC or the Federation, as the case may be, may suspend any manager of a COOPEC following any serious act harming the interests of the COOPEC or its members. This suspension may not exceed three months.

CHAPTER II: EXTERNAL CONTROL AND SUPERVISION

Article 74:

The Central Bank ensures the supervision of the control activities of savings and credit cooperatives. It carries out or has carried out, at least once a year, documentary and on-site inspections of COOPECs, COOCECs, and Federations, as well as any enterprise under the control of these latter entities.

Article 75:

The Central Bank must carry out or have carried out, at least once a year, inspections of Unaffiliated Cooperatives and must ensure their documentary and on-site control.

The concerned COOPECs share in the inspection and control costs, in accordance with the provisions of Article 91 of the law relating to the activity and control of Credit Institutions.

Article 76:

The certification of the financial statements of an unaffiliated COOPEC is carried out by an auditor, designated by the members gathered in the annual general meeting for a one-year term renewable.

The Auditor may not carry out the verification of the COOPEC of which he is a member.

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Article 77:

The standards relating to the selection and remuneration of auditors are determined by the Central Bank.

Article 78:

When the Central Bank finds:

1. that the operations of a COOPEC are conducted contrary to this Law, the Laws and Regulations in force;
2. that the management bodies of a savings and credit cooperative, its administrative and accounting organization, as well as its internal control, present serious deficiencies;
3. that a savings and credit cooperative refuses to submit to control or hinders such control in any way; and depending on the seriousness of the facts, it may:
   a. issue a warning, after having given its managers the opportunity to present their explanations; b. issue an injunction to take, within a specified deadline, all appropriate corrective measures;
   c. take any protective measures deemed necessary, notably the designation, for a period not exceeding six months, of a Provisional Representative;
   d. place a savings and credit cooperative under administrative management. These measures are taken in accordance with the rules established by the Central Bank.

The COOCEC or Federation, as the case may be, is informed of any initiative taken by the Central Bank regarding its members under this article.

TITLE SIXTH:
PROFESSIONAL SECRECY AND WITHDRAWAL OF APPROVAL

Article 79:

Any person who, in any capacity, participates or has participated in the management or control of a savings and credit cooperative is bound by professional secrecy under penalty of sanctions provided for in Article 73 of the Congolese Penal Code Book I.

Except where the law provides otherwise, professional secrecy may not be invoked against the Central Bank or the judicial authority acting within the framework of criminal proceedings.

CHAPTER II: WITHDRAWAL OF APPROVAL

Article 80:

Withdrawal of approval may occur in the following cases:

1° at the express request of the COOPEC;
2° when the start of activities does not occur within the year following the approval decision or when the COOPEC has not exercised any activity for more than one year; 3° upon the cessation of activities of the COOPEC; 4° in the event of merger or division; 5° in the event of serious or repeated breach of this Law.

Article 81:

The decision to withdraw approval is notified to the COOPEC. It must specify the reason and the effective date of the decision.

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The Central Bank proceeds, at the expense of the COOPEC, to its publication in the Official Journal and in at least one national mass-circulation press organ.

Article 82:

Withdrawal of approval entails ipso facto the deletion of the COOPEC from the list of approved Credit Institutions.

TITLE SEVENTH:
MERGER, DIVISION, DISSOLUTION AND LIQUIDATION

CHAPTER I: MERGER AND DIVISION

Article 83:

Two or more savings and credit cooperatives of the same level may merge.

A savings and credit cooperative may be divided into two or more savings and credit cooperatives of the same level. The conditions and procedures for merger or division are specified by the Central Bank.

The decision to merge or divide is subject to prior authorization from the Central Bank. It must first ensure that the interests of the members are preserved.

CHAPTER II: DISSOLUTION AND LIQUIDATION

Article 84:

The dissolution of a savings and credit cooperative may be voluntary or forced. Dissolution is said to be voluntary when it is decided, in the cases provided for in the statutes, by a three-quarters majority of the members gathered in an Extraordinary General Meeting.

Dissolution is said to be forced when the decision emanates from the Central Bank or the judicial authority, upon application by any interested party.

Article 85:

The decision to dissolve entails the liquidation of the savings and credit cooperative. It must be accompanied by the nomination of one or more liquidators by the Extraordinary General Meeting when the dissolution is voluntary, or by the Central Bank if it is a forced dissolution.

COOCECs and Federations, as the case may be, may be associated with the conduct of liquidation operations for COOPECs or COOCECs affiliated with them.

Article 86:

At the closing of the liquidation, when a surplus remains, the General Assembly may decide to allocate it to the repayment of shares to members.

Any remaining balance after this operation is devolved to another COOPEC or to works of social or humanitarian interest.

Article 87:

Subject to the provisions of this Law, liquidation is carried out in accordance with the rules fixed by the law relating to the activity and control of Credit Institutions.

TITLE EIGHTH:
GROUPING OF SAVINGS AND CREDIT COOPERATIVES

CHAPTER I: PROVISIONS COMMON TO GROUPING

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Article 88:

Unless incompatible, the provisions of Titles II and III as well as their implementing measures apply, mutatis mutandis, to COOCECs and Federations.

Article 89:

When several savings and credit cooperatives of a network are entrusted by this Law with the same mission, it is up to them to determine, by regulation, which of them must exercise this attribution.

CHAPTER II: CENTRAL SAVINGS AND CREDIT COOPERATIVE OR "COOCEC"

Article 90:

At least seven primary savings and credit cooperatives may, with the approval of the Central Bank, group together to form a central savings and credit cooperative or COOCEC.

Article 91:

COOCECs wishing to form a COOCEC must sign a founding declaration indicating:

1. The name of the projected COOCEC;
2. the common link;
3. the names of the affiliated COOPECs and the number of shares subscribed by each of them;
4. the names, profession, and domicile of the person designated to act as provisional secretary of the COOCEC for the convening of the Constituent Assembly;
5. its registered office.

This declaration must be signed by the representatives of the COOPECs, who must be authorized to this end by resolutions of their respective boards of directors, ratified by the general assemblies of their members. These resolutions must mention the names of the persons authorized to sign the founding declaration.

A copy of this declaration, as well as the statutes and internal regulations, is filed with the Registry of the High Court within the jurisdiction of which the COOCEC has its registered office.

Article 92:

A COOCEC aims to promote and protect the interests of its members. To this end, it may notably:

1. receive and grow the deposits of COOPECs;
2. grant loans to its members;
3. conclude agreements with an affiliated COOPEC to direct or manage its affairs for a specified period;
4. establish the payment method for contributions from affiliated COOPECs;
5. handle, at the request of COOPECs, collections and receipts, facilitate the exchange of negotiable instruments between member COOPECs and other Credit Institutions;
6. make investments and contract loans deemed necessary for its own account and for that of the COOPECs;
7. carry out administrative and management control of COOPECs;
8. formulate opinions on the creation and approval of a COOPEC;

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9. organize training and technical assistance sessions;
10. define, for the use of its members, rules of ethics.

Article 93:

The statutes of the COOCEC determine, within the limits fixed by this Law, notably the conditions for admission, resignation, or exclusion of members, the modes of administration and control.

CHAPTER III: FEDERATION OF CENTRAL SAVINGS AND CREDIT COOPERATIVES

Article 94:

At least two central savings and credit cooperatives or COOCECs may, with the approval of the Central Bank, group together to form a Federation of savings and credit cooperatives or Federation, abbreviated.

Article 95:

The Federation has the following objectives:

1. to assume technical, administrative, and financial functions for the benefit of its members;

2. to represent COOCECs vis-à-vis partners both nationally and internationally;

3. to consolidate the links uniting COOCECs and defend their common interests;

4. to favor their growth and development;

5. to carry out control of the administrative and financial management of COOCECs and COOPECs;

6. to promote the expansion of the cooperative philosophy and ensure its respect;

7. to define common objectives to achieve unity of thought and action among COOCECs and COOPECs;

8. to propose any measure to orient and coordinate the activities of COOCECs;

9. to formulate opinions on the creation and approval of a COOPEC or a COOCEC;

10. to define, for the use of its members, rules of ethics;

11. to assume any other task entrusted to it by COOCECs.

Article 96:

The statutes of the Federation define, within the limits fixed by this Law, the rules relating to its organization and functioning.

TITLE NINTH:
SANCTIONS

CHAPTER I: DISCIPLINARY AND ADMINISTRATIVE SANCTIONS

Article 97:

If a savings and credit cooperative violates a legal or regulatory provision relating to its activity, does not comply with an injunction, or ignores a warning, the Central Bank may impose one of the following disciplinary sanctions:

1. Warning;
2. Reprimand;
3. Prohibition of carrying out certain operations or activities;
4. Suspension or automatic resignation of responsible managers;

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5. Revocation of the auditor;
6. Withdrawal of approval.

Article 98:

Without prejudice to the provisions of Article 97, the Central Bank may set a deadline for a savings and credit cooperative to:

1. comply with certain provisions of this Law and its implementing measures;
2. carry out the adaptations required for its organization and functioning.

Failing to do so, the concerned savings and credit cooperative is subject to an administrative fine, the rate of which is fixed by the Central Bank.

Disciplinary sanctions are taken without prejudice to criminal sanctions under common law.

CHAPTER II: PENALTIES

Article 99:

A savings and credit cooperative that does not respect the prudential standards established by the Central Bank is subject to a penalty, the rate of which is fixed by the latter. The proceeds of the penalty are paid to the Treasury by the Central Bank.

CHAPTER III: CRIMINAL SANCTIONS

Article 100:

Subject to a penalty of imprisonment from one month to one year and a fine of 30,000 to 300,000 Congolese Francs, or one of these penalties only:

1° any person who violates the provisions of Articles 7, 8, and 49;

2° any person who, participating directly or indirectly in the administration, direction, control, or management of a savings and credit cooperative:

a) hinders the mission of persons mandated by the Central Bank to carry out an inspection provided for in Articles 71, 74, and 75; b) hinders the mission of the Provisional Representative provided for in Article 78; c) communicates to the public, the Central Bank, or persons mandated by them, knowingly false or incomplete information;

3° any person who, participating directly or indirectly in the administration, direction, control, or management of a savings and credit cooperative, knowingly violates the provisions of Articles 13, 49 to 79, and 83;

4° Any person who refuses to submit their books, accounts, and files to the examination of the Central Bank in accordance with Article 66.

Article 101:

Savings and credit cooperatives are civilly liable for fines imposed under the provisions of Articles 98 and 100 against any person who participates, directly or indirectly, in their administration, management, or control.

However, the civil liability of savings and credit cooperatives does not apply regarding administrators, managers, and provisional representatives as well as auditors designated by the Central Bank.

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Article 102:

Any information relating to an offense under this Law must be brought to the knowledge of the Central Bank by the judicial or administrative authority seized of the matter.

Article 103:

Judicial authorities seized of proceedings relating to offenses provided for in this Law may, at any stage of the procedure, request from the Central Bank all useful opinions and information.

For the application of this Law, the Central Bank may join as a civil party.

Article 104:

The Central Bank is authorized to settle and to fix itself the conditions of the settlement for offenses committed against the provisions of this Law.

The settlement accepted by the Public Ministry extinguishes the public action, even regarding penalties of imprisonment.

TITLE TENTH:
TRANSITIONAL AND FINAL PROVISIONS

Article 105:

Instructions and regulations of the Central Bank define, as necessary, the implementation modalities of this Law.

Article 106:

Decisions of the Central Bank may be subject to appeal before the competent jurisdiction.

Article 107:

Savings and credit cooperatives, duly approved in accordance with the legal provisions in ---