Law No. 2/2008 Establishing the National Payments System and Creating the National Payments System Coordination Committee

BOLETIM DA REPÚBLICA OFFICIAL PUBLICATION OF THE REPUBLIC OF MOZAMBIQUE NATIONAL PRESS OF MOZAMBIQUE NOTICE

The matter to be published in the "Boletim da República" must be submitted in a duly authenticated copy, one for each subject, which must include, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the "Boletim da República".

SUMMARY

Assembly of the Republic: Law No. 2/2008: Establishes the National Payments System and creates the Coordination Committee of the National Payments System.

Summons: Convenes the VIII Ordinary Session of the Assembly of the Republic, with the start scheduled for March 10, 2008.

Council of Ministers: Resolution No. 4/2008: Recognizes Minhembetí Foundation as a subject of law with legal personality.

Resolution No. 5/2008: Designates Zauria Amisse Agy Amisse Abdula as a member with permanent seat in the plenary sessions of the National Elections Commission.

ASSEMBLY OF THE REPUBLIC Law No. 2/2008 of February 27

Considering that the increase in transactions in national and international financial markets, the sophistication of financial products, and the globalization of markets, embodied by technological advances, require the development of effective, secure, and efficient payment systems, in order to preserve the stable functioning of financial systems and provide more adequate support to the productive, commercial, financial, and service activities of economies.

In these terms, the Assembly of the Republic, under the provisions of paragraph 1 of Article 179 of the Constitution, determines:

CHAPTER I General Provisions

ARTICLE 1 (Object) This Law aims to establish the National Payments System, the fundamental principles and provisions governing its organization, functioning, and control.

ARTICLE 2 (Definitions)

1. Payment System is the systematic and structured set of participants, services, subsystems, payment instruments, technology, and procedures that facilitate the transfer of funds or monetary values for the finalization of payments and their circulation in the economy.
2. The other terms used in this Law have the meaning contained in the glossary attached, which forms an integral part of it.

ARTICLE 3 (Composition)

1. The payment system is composed of the following subsystems: a) real-time gross settlement of transfers; b) settlement of fund transfers and other financial assets; c) clearing houses for: (i) checks; (ii) electronic credit orders; (iii) securities; (iv) other negotiable instruments.
2. The Bank of Mozambique may create other subsystems whenever necessary.

ARTICLE 4 (Public Interest Objectives)

1. Payment systems must fulfill public interest objectives, namely: a) security; b) reliability; c) transparency; d) efficiency.
2. To fulfill the security objective, payment subsystems must possess appropriate infrastructures, consistent with internationally accepted standards for similar operations, the type of operations they process, as well as operate with competent personnel and adequate and transparent rules to allow: a) the control of credit, liquidity, legal, operational, and systemic risks; b) the containment of risks for the Central Bank arising from its responsibilities as a financial settlement agent; c) the immediate, automatic, and unconditional execution of offered guarantees.
3. To fulfill the reliability objective, subsystems must be equipped with minimum business continuity plans that ensure operations proceed continuously and uninterruptedly within established hours, once equipped with replica facilities for recovery in case of failures or disasters.
4. The fulfillment of the transparency objective requires that subsystems have their own regulations, disclosed to participants in a timely manner, and that the final beneficiary is previously informed about prices and deadlines for fund availability and the cessation of payment service provision activities.
5. To satisfy the efficiency objective, subsystem operators must ensure competitiveness and equity in the prices of services provided.

CHAPTER II Participants in the National Payments System

ARTICLE 5 (Participants) The following are participants in the payment system: a) the State; b) the Bank of Mozambique; c) Banks and bank groupings, legally constituted or not; d) payment subsystem operators; e) payment service providers; f) stock exchanges; g) other entities that the Bank of Mozambique may determine.

ARTICLE 6 (Competences)

1. It is the competence of the Bank of Mozambique to supervise the provisions of this Law, without prejudice to the competence in matters of supervision of credit institutions and financial companies conferred upon it by specific legal instrument.
2. It is especially the competence of the Bank of Mozambique to: a) ensure compliance with public interest objectives, as provided in this Law, through the control and permanent monitoring of payment subsystem activities; b) coordinate and promote the good functioning of the Payment System; c) define, by notice, the terms and conditions for the constitution and functioning of payment subsystems; d) authorize the constitution of other subsystems, under the terms of paragraph 2 of Article 3 of this Law; e) whenever public interest justifies, arbitrate conflicts between payment system participants; f) cooperate with other central banks and with other national or foreign entities that exercise activities related to the control and monitoring of payment systems; g) consult books, records, physical or electronic files and registers of participants; h) demand proof of operations, accounting records, contracts, agreements, and other documents related to the payment subsystem.

ARTICLE 7 (Duty of Information) Payment system participants are obliged to provide the Bank of Mozambique with information that it considers necessary for verification, namely: a) their degree of liquidity and solvency; b) the risks they incur; c) their security, control, and replication processes in the field of communication and information systems; d) volumes, values, instruments, or payment and settlement obligations; e) compliance with legal and regulatory norms governing their activity; f) the price and commission table.

ARTICLE 8 (Confidentiality of Information) Without prejudice to the necessary duty of disclosure, provided for in the following article, information obtained under the provisions of Article 7 is considered confidential and covered by the duty of secrecy, with its violation subject to the sanction provided for in Article 290 of the Penal Code.

ARTICLE 9 (Duty of Disclosure) In the public interest, the Bank of Mozambique discloses, through the means it deems appropriate, all relevant information regarding the payment system.

ARTICLE 10 (Creation and Composition) The Coordination Committee of the National Payments System, abbreviated as CCSNP, is created, presided over by the Bank of Mozambique and composed of representatives of the following entities: a) Bank of Mozambique; b) Ministry of Finance; c) National Institute of Communications; d) Mozambique Stock Exchange; e) Mozambican Bank Association; f) Commercial Banks; g) Payment Service Providers.

ARTICLE 11 (Competences) The CCSNP is competent, inter alia, to: a) pronounce itself, on its own initiative or when requested, on matters related to the improvement or modernization of the National Payments System; b) submit to the Bank of Mozambique studies, suggestions, or recommendations that contribute to the continuous development of the National Payments System; c) constitute technical subgroups to collaborate in the preparation of studies and appreciation of specific matters regarding the National Payments System; d) others that may be assigned to it.

CHAPTER III SECTION I Settlement of Operations General Provisions

ARTICLE 12 (Definitive Nature of Settlement) The settlement of any operation processed, under the terms of this Law and regulations approved for its execution, through payment subsystems, is always considered definitive, irrevocable, and unconditional, and cannot be annulled in any way.

ARTICLE 13 (Moment of Payment Finalization)

1. Payment processed through payment subsystems is considered final when the funds related to the payment are made available in the bank account of the respective final beneficiary, or their legal representative, or when they receive the respective payment in cash.
2. The finalization of payment not settled through payment subsystems occurs when the payment service provider makes the payment or deposit in the respective account to the final beneficiary or their legal representative, in cash.
3. The regulation of each payment subsystem establishes the deadline and consequences of the lack of payment finalization.

ARTICLE 14 (Guarantees and their Imprescriptibility)

1. The following may serve as guarantee for the settlement of obligations assumed in payment subsystems: titles that the Bank of Mozambique considers eligible with regard to monetary policy objectives, namely: a) treasury bonds; b) treasury bills; c) monetary authority securities.
2. Any guarantees constituted for the purposes referred to in the previous paragraph are considered imprescriptible, as long as the obligations to which they are attached are not settled.

ARTICLE 15 (Execution of Guarantees)

1. Without prejudice to the provisions of their respective regulations, the settlement of obligations arising from the establishment in the previous article or non-compliance by any participant in the payment subsystems takes place with: a) transfers of securities or funds in favor of the creditor participant; b) transfers of funds resulting from the execution of guarantees under the terms of letter c) of paragraph 2 of Article 4 of this Law, when negotiated securities or funds to be transferred are non-existent or insufficient.
2. Once the measures referred to in letters a) and b) of the previous paragraph are adopted, if there is a positive balance, it is transferred in favor of the debtor participant. In the inverse situation, it constitutes a credit in favor of the creditor participant.

ARTICLE 16 (Participants under Special Legal Regimes) The bankruptcy, insolvency, financial rehabilitation, extrajudicial liquidation, or equivalent acts, to which any participant is subject, does not affect the fulfillment of obligations assumed within the scope of payment subsystems, which must be settled under the terms established in this Law and regulations approved for its execution.

ARTICLE 17 (Payment Instruments, Transactions, and Electronic Archives)

1. The processing of operations provided for in this Law and regulations approved for its execution may take the form of electronic transactions.
2. Electronic transactions carried out under the terms of this Law and their supporting documents and electronic archives have legal value and full probative force.
3. Copies of electronic documents, on identical or different types of support, are valid and effective and have the probative force attributed to photographic copies under the general terms of Civil Law and Civil Procedure Law.
4. The Bank of Mozambique issues specific norms on payment instruments, transactions, and electronic archives used within the National Payments System.

SECTION II Settlement in Payment Subsystems SUBSECTION I Settlement in Fund Transfer Operations

ARTICLE 18 (Settlement Account) Settlement in payment subsystems is carried out through the account held by the participant at the Bank of Mozambique.

ARTICLE 19 (Settlement Intermediaries) Only entities holding a settlement account at the Bank of Mozambique may be intermediaries in fund transfers for payment settlement.

SUBSECTION II Settlement in Securities Operations

ARTICLE 20 (Principle of Delivery versus Payment)

1. In securities operations, definitive settlement processed through fund transfer is carried out under the terms provided in Article 18 of this Law.
2. Without prejudice to the stipulated in the securities market regulation and other regulations emanating from the stock exchange, in the operations referred to in the previous paragraph, there must be simultaneity between the settlement of fund transfer and the settlement of securities transfer, observing the principle of delivery versus payment.
3. Whenever it is not possible to observe the principle of delivery versus payment established in the previous paragraph, additional credit and liquidity risk control measures must be adopted for the clearing and settlement of operations carried out in securities markets.

ARTICLE 21 (Central Counterparty in Financial Transactions)

1. Participants of a payment subsystem, in obedience to public interest objectives, may assume the position of central counterparty or contracting party, for the purpose of settling obligations through the same payment subsystem, with authorization from the Bank of Mozambique.
2. Operators who assume the position of central counterparty or contracting party do not respond for the payment obligation of the title of the responsibility of the respective issuer.

SECTION III Settlement in Clearing Houses SUBSECTION I Settlement in Multilateral Clearing Operations

ARTICLE 22 (Multilateral Clearing) For the purpose of settling financial obligations, multilateral clearing of obligations contracted in the same payment subsystem is permitted.

ARTICLE 23 (Mechanism for Multilateral Clearing Settlement)

1. Payment subsystem operators may be holders of a settlement account, in the name of the respective operator, at the Bank of Mozambique, intended for the settlement of operations, under the terms regulated by it.
2. The account referred to in the previous paragraph must present a balance equal to zero, after the daily closing of the definitive settlement of operations processed in it.

SUBSECTION II Settlement in Truncation Operations

ARTICLE 24 (Admissibility)

1. Truncation of checks and other titles in value and other conditions defined by the Bank of Mozambique, after hearing the Coordination Committee of the National Payments System, is permitted.
2. For the purposes of the previous paragraph, bilateral, total, or partial truncation may be adopted, depending on the analysis of market risk.

CHAPTER V Offenses

ARTICLE 25 (Applicable Law) Offenses provided for in this chapter are governed by the provisions contained therein and other provisions applicable to Credit Institutions and Financial Companies, and subsidiarily, by general criminal law in everything that does not contradict the provisions of those.

ARTICLE 26 (Misdemeanors and Sanctions)

1. A misdemeanor is generally considered, within the payment system, the violation of the provisions of this Law or regulations aiming at its execution.
2. It constitutes in particular a misdemeanor of this Law: a) the failure to constitute guarantees in the form of funds or other assets, namely securities that may respond for eventual non-compliance or defective compliance in payment subsystems; b) the non-realization or serious compromise of payment finalization within the legally established deadlines; c) the truncation of checks or other titles in contravention of norms emanating from the Bank of Mozambique; d) the assumption of the central counterparty position for the purpose of settling obligations without being authorized for this effect; e) the deliberate practice of operations that may aggravate the situation of impossibility of fulfilling obligations contracted in the payment subsystem; f) the practice of any acts that contribute to create, increase, or aggravate credit and liquidity risk in a payment subsystem; g) the practice of acts that may prevent, hinder, or in any way frustrate the observance of the duty of simultaneity in the definitive settlement of fund transfers in securities operations; h) the practice of any act that puts into question the effective exercise of control, supervision, and monitoring by the Bank of Mozambique, namely, through impediment to the consultation of books and records, files and registers, physical and electronic, or by not providing information requested by the Bank; i) the violation of any other provision of this Law or regulations aiming at its execution.
3. The offenses provided for in paragraphs 1 and 2 of this article are punishable by a fine of ten to one hundred thousand meticais or forty to four hundred thousand meticais, for natural persons or legal entities, respectively.
4. Whenever necessary, the Council of Ministers may update the limits of the fine penalty provided for in the previous paragraph.

ARTICLE 27 (Accessory Sanctions)

1. Depending on the gravity of the offense, in conjunction with the fine, the offender may be subjected to the accessory penalty of: a) suspension of participation in the payment subsystem; b) exclusion from the payment subsystem.
2. The suspension of participation in one or more payment subsystems, referred to in letter a) of the previous paragraph, may be up to one year from the date of notification of the decision to the suspended participant.
3. In the cases referred to in letter b) of paragraph 1 of this article, the participating entity may request readmission into the payment subsystems where it was excluded, at any time, upon proof of the cessation of the cause determining the exclusion.

ARTICLE 28 (Responsibility of Legal Entities, Companies, and Individual Agents)

1. For the practice of offenses referred to in this Law, natural or legal persons, even if irregularly constituted, and associations without legal personality, may be held responsible, jointly or not.
2. The responsibility of the collective entity does not exempt from individual responsibility, including criminal, of the members of its bodies who exercise management positions or those who act in its legal or voluntary representation.
3. It does not obstruct the responsibility of individual agents representing others the fact that the legal type of offense requires certain personal elements and these only occur in the person of the represented, or require that the agent practice the act in their interest having the representative acted in the interest of the represented.
4. Natural or legal persons, even if irregularly constituted, and associations without legal personality are responsible for offenses committed by members of their respective bodies and by holders of management, leadership, or directorship positions, in the exercise of their functions, as well as for offenses committed by their representatives in acts practiced in their name and interest, even if the legal instrument of representation proves ineffective.
5. The legal entities and companies referred to in this article are jointly responsible for the payment of fines in which their representatives or employees are condemned, unless it is proven that they acted against the order or instruction of the represented or employing entity.

ARTICLE 29 (Instruction and Decision of Processes)

1. It is the competence of the Bank of Mozambique to instruct and decide on processes of misdemeanors of this Law.
2. Once the process is instituted, the accused is notified to, if desired, present the defense, in writing, within a period of ten days.
3. The notification referred to in the previous paragraph is made by registered mail with acknowledgment of receipt.
4. When the accused is not found or refuses to receive the notification or their address is unknown, it is made following the rules of citation by edict.
5. If the Bank of Mozambique, during the instruction, finds the existence of criminal indications, it informs the Public Ministry for the purpose of instituting the competent criminal procedure.

ARTICLE 30 (Contentious Appeal)

1. Against condemnatory decisions taken within the scope of this Law, appeal lies under general terms, to be lodged within a period of fifteen days after the notification of the condemnatory decision, to the Provincial Judicial Court where the offense occurred.
2. The appeal has suspensive effect when the accused deposits previously, in a banking institution, to the order of the Bank of Mozambique, the amount of the fine applied.

ARTICLE 31 (Judicial Decision by Order)

1. The judge of the competent Judicial Court may decide by order, when they do not consider the hearing of judgment necessary, the archiving of the process in appeal, the acquittal of the accused, the maintenance or alteration of the conviction.
2. In case of maintenance or alteration of the conviction, the judge must justify their decision.
3. In case of acquittal, the judge must indicate why they do not consider the facts proven.
4. The Bank of Mozambique may always appeal the order, if they do not conform with the grounds of the acquittal.

ARTICLE 32 (Participation of the Bank of Mozambique in the Contentious Phase) The Bank of Mozambique may always participate, through a representative, during the contentious process.

ARTICLE 33 (Compliance with Omitted Duty) Whenever the offense results from the omission of a duty, the application of the sanction and the payment of the fine do not dispense the offender from its fulfillment if this is still possible.

CHAPTER VI Conflict Resolution

ARTICLE 34 (Conciliation and Mediation)

1. The resolution of any disputes arising in the execution of this Law and involving two or more participants of the payment subsystem may be resolved amicably between the parties, with or without the involvement of a third person in mediation, before and during the processing of the process and in the absence of an amicable solution, under the terms of the subsequent articles.
2. For the purposes of speed of the process, under the terms provided in the previous paragraph, a third party is understood to be the Bank of Mozambique or any other participant of the payment subsystem.

ARTICLE 35 (Arbitration) Whenever consensus is not reached under the terms of the previous article, the conflict between participants may be resolved via arbitration, either at the request of any of the parties, or in the public interest by initiative...