BANK OF THE REPUBLIC OF BURUNDI

THE GOVERNOR

CIRCULAR NO. 007/RC/2023 REGARDING THE MATRIX OF SANCTIONS APPLICABLE TO BANKS AND EXCHANGE OFFICES UNDER FOREIGN EXCHANGE REGULATIONS

Pursuant to Law No. 1/34 of December 2, 2008 establishing the Statutes of the Bank of the Republic of Burundi;

Pursuant to the Foreign Exchange Regulations of December 28, 2023;

The Bank of the Republic of Burundi, hereinafter referred to as the "Central Bank", hereby issues:

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Article 1: Purpose and Scope

This circular aims to specify the sanctions applicable to banks and exchange offices under the Foreign Exchange Regulations.

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Article 2: Compliance with Legal and Regulatory Provisions

Banks and exchange offices are required to comply with the legal and regulatory provisions governing their activities.

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Article 3: Types of Sanctions

When an approved bank or exchange office infringes a legal or regulatory provision related to its approval conditions or activities, violates an agreement signed with the Central Bank, fails to comply with an injunction or disregards a warning, resorts to unsafe or unreliable practices, obstructs or refuses submission to supervision, the Central Bank may impose upon it the sanctions listed in the annex to this circular.

Sanctions are of two types, namely criminal sanctions and administrative sanctions.

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Article 4: Gradual Application of Sanctions

To ensure a gradual application of sanctions and to give banks or exchange offices the opportunity to implement appropriate corrective measures, the Central Bank follows the procedure below:

1. upon finding a breach, the Central Bank sends a letter to the concerned bank or exchange office, recommending that it regularize the situation;

2. in case of a breach requiring immediate regularization and where the provided explanation is deemed unsatisfactory, the Central Bank issues an injunction with a deadline beyond which a sanction may be imposed;

3. in case of a breach requiring complex corrective measures, the Central Bank may grant the bank or exchange office a deadline for their implementation. Otherwise, the Central Bank issues an injunction with a deadline beyond which a sanction may be imposed.

In case of breaches involving a Manager/Director, the same procedure is applied.

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Article 5: Sanctions for Serious Cases

Notwithstanding the procedure described in Article 4 of this circular, for cases deemed serious, the Central Bank may directly apply the sanctions provided by the matrix, following a request for explanations where the response is unsatisfactory.

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Article 6: Payment Method for Penalties

In case of penalties or criminal sanctions, the corresponding amounts are immediately settled by automatic debit from the account of the bank or exchange office held in the books of the Central Bank. The penalties incurred by them must not be passed on to clients.

In case of a debit operation on an exchange office's account related to potential criminal sanctions, the exchange office is required, within 30 calendar days, to replenish the bank guarantee to maintain it within regulatory standards.

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Article 7: Entry into Force

This circular enters into force on the day of its publication in the Official Gazette of Burundi and on the Central Bank's website.

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Issued in Bujumbura, December 28, 2023

Edouard Normand BIGENDAKO
Governor.

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ANNEX

MATRIX OF SANCTIONS APPLICABLE TO BANKS

No.	Breaches	Regulatory References	Sanctions
1	Foreign currency payment for a transaction concluded between residents (except formally indicated exception cases)	Article 4	10% of the transaction amount, with a maximum of 5% of the mandatory minimum capital or withdrawal of approval for bank directors.
2	Failure to display buying and selling rates as well as fees and commissions applied to foreign exchange operations	Article 6	1,000,000 BIF or withdrawal of approval for directors
3	Market manipulation	Article 9	0.5% of the mandatory minimum capital or withdrawal of approval for bank directors.
4	Obstruction to a Central Bank supervision mission	Article 10	Pecuniary sanction of 1% of the mandatory minimum capital or withdrawal of approval for Directors Or Forfeiture of the bank
5	Failure to transmit reports to the Central Bank within deadlines.	Article 20	Penalty of BIF 1,000,000 per day of delay or withdrawal of approval for Directors
6	Failure to follow the transmission model for reports to the Central Bank.	Article 20	Penalty of BIF 2,000,000 or withdrawal of approval for Directors
7	Transmission of incomplete information or reports.	Article 20	Penalty of BIF 2,000,000 or withdrawal of approval for Directors
8	Declaration and/or transmission of unreliable information/reports.	Article 20	Pecuniary sanction of 0.25% of the mandatory minimum capital or withdrawal of approval for Directors
9	Validation of Import Declarations (DI) without required supporting documents.	Article 24	2% of the transaction amount, not exceeding 5% of the mandatory minimum capital
10	Validation of multiple DI for a split order	Article 29	2% of the split order amount, not exceeding 5% of the mandatory minimum capital or withdrawal of approval for directors
11	Validation of Export Declarations (DE) without required supporting documents.	Article 36	2% of the transaction amount, not exceeding 5% of the mandatory minimum capital or withdrawal of approval for directors
12	Failure to declare a transaction.	Article 41, 43, 45, 46	2% of the transaction value, not exceeding 5% of the mandatory minimum capital. or withdrawal of approval for directors
13	Exceeding foreign currency sales standards.	Article 42,43	100% of the excess amounts, not exceeding 5% of the mandatory minimum capital. or withdrawal of approval for directors
14	Transfer before importation of an amount exceeding the authorized ceiling without bank guarantee	Article 29	100% of the excess amounts, not exceeding 5% of the mandatory minimum capital or withdrawal of approval for directors
15	Manual foreign exchange or payments without required supporting documents	Article 86	100% of the foreign exchange amount without supporting documents, not exceeding 5% of the mandatory minimum capital or withdrawal of approval for directors
16	Failure to comply with BRB instructions		Pecuniary sanction; 0.5% of the mandatory minimum capital or withdrawal of approval for directors and/or administrators

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MATRIX OF SANCTIONS APPLICABLE TO EXCHANGE OFFICES

No.	Breaches	Regulatory References	Sanctions
1	Obstruction to a BRB supervision mission	Article 10	Withdrawal of approval for the manager in case of unconvincing explanations.
2	Opening an agency without prior BRB approval	Article 75	Immediate closure of the agency and penalty of 1,000,000 BIF
3	Modification of one of the required elements during approval without authorization from the Bank of the Republic of Burundi.	Article 79	3,000,000 BIF.
4	Approval of an exchange office based on false information or a fraudulent act.	Article 82	Withdrawal of approval for the exchange office
5	Failure to commence activities by an exchange office within six months following its approval.	Article 82	Withdrawal of approval for the exchange office
6	Inability to permanently maintain the required bank guarantee over a 30 calendar day period	Article 83	1,000,000 BIF
7	Inability to permanently maintain the required bank guarantee over a 90 calendar day period	Article 83	Withdrawal of approval for the exchange office
8	Prohibited transactions	Article 85	Seizure of funds collected by the competent authority. Withdrawal of approval without prejudice to judicial proceedings against the owners of the Exchange Office.
9	Failure to declare, register, or retain transaction documents	Article 86	100% of the amount of the concerned transaction or withdrawal of approval for the manager
10	Failure to transmit reports and financial statements within deadlines.	Article 88	20,000 BIF per day of delay if explanations are not convincing.
11	Suspension of activities without prior notification to the Bank of the Republic of Burundi within deadlines.	Article 90	1,000,000 BIF or withdrawal of approval for the exchange office
12	Cessation of activities due to voluntary liquidation or bankruptcy without notifying the Central Bank within deadlines.	Article 91	5,000,000 BIF
13	Opening accounts abroad.	Article 85	5,000,000 BIF and immediate closure of these accounts. or withdrawal of approval for the manager
14	Sale of foreign currency without supporting documents	Article 86	100% of the amount of the concerned transaction or withdrawal of approval for the manager
15	Failure to comply with an instruction from the Bank of the Republic of Burundi.	Article 86	1,000,000 BIF or withdrawal of approval for the manager