Regulation No. 003 of 2024 on Commercial Agent Activities in Banking Operations and Payment Services

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BANQUE DE LA REPUBLIQUE DU BURUNDI THE GOVERNOR

REGULATION NO. 003/2024 REVISING REGULATION NO. 002/2017 ON THE ACTIVITIES OF COMMERCIAL AGENTS IN BANKING OPERATIONS AND PAYMENT SERVICES

STATEMENT OF REASONS

The intention to revise this Regulation stems from the need to update its legal references.

Indeed, certain legal and regulatory texts to which it should refer were promulgated or enacted after its entry into force. These texts are as follows:

• Law No. 1/17 of August 22, 2017, governing banking activities;
• Law No. 1/07 of May 11, 2018, establishing the national payment system;
• Regulation No. 001/2018 on microfinance activities;
• Regulation No. 001/2023 issued in application of Law No. 1/02 of February 4, 2008, on the fight against money laundering and the financing of terrorism;
• Regulation No. 001/2019 on the protection of consumers of financial products and services;
• The Foreign Exchange Regulations of December 28, 2023.

This Regulation is structured into nineteen (19) articles.

While Article 1 specifies its object and scope, Article 2 provides definitions of key concepts under this Regulation. In this regard, the concept of "Commercial Agent" refers to any person acting on behalf of and in the name of one or more supervised establishments, that is to say, establishments authorized by the Central Bank to carry out one or more banking activities, such as credit institutions, payment institutions, microfinance institutions, and the National Post Office for its banking and/or microfinance activities subject to the authorization and control of the Central Bank.

Article 3, for its part, gives supervised establishments the possibility to use the services of commercial agents.

Regarding the creation of a commercial agency contract and the status of commercial agents, Article 4 stipulates that the supervised establishment must conclude a written contract with an entity for the provision, in its name, of payment services. These entities, which are commercial agents, act independently, in the name and on behalf of the mandating establishments, but under the full responsibility of the latter.

In order to prevent access to the activity by persons of dubious morality and/or economic offenders, Article 5 lists the selection criteria for anyone wishing to be approved as a Commercial Agent.

All commercial agents of supervised establishments must be registered with the Central Bank. Article 6 details the documents and information required.

Subsequently, the regulation outlines the responsibilities of the agent and their mandator while explicitly stating that the supervised establishment remains primarily responsible for the proper conduct of the operation (Article 7).

Without being exhaustive, the said regulation lists the mandatory provisions to be integrated into the agency contract (Article 8), determines the powers of the Central Bank (Article 9), indicates the modalities for the retention of information (Article 10), and imposes, on the one hand, the types of information to be made public (Article 11) and, on the other hand, the mechanisms related to the physical and technical security of operations to be put in place (Article 12).

Articles 13 and 14, for their part, inventory the activities in which commercial agents may engage and those prohibited to them.

Under the provisions of Article 15, supervised establishments are authorized to organize their commercial agents into primary commercial agents and secondary commercial agents to provide services closer to the clientele. Said establishments also provide their agents with the necessary training to fulfill their mandate (Article 16).

As with any participant in financial intermediation activities, Article 17 subjects commercial agents to professional secrecy.

Finally, Article 18 lists the circumstances for the termination of the agency contract other than those that must be recorded in said contract.

The entry into force date of this Regulation is the date of its publication in the Official Bulletin of Burundi and on the website of the Banque de la République du Burundi (Article 19).

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[Logo: BRB]

BANQUE DE LA REPUBLIQUE DU BURUNDI

REGULATION NO. 003/2024 REVISING REGULATION NO. 002/2017 ON THE ACTIVITIES OF COMMERCIAL AGENTS IN BANKING OPERATIONS AND PAYMENT SERVICES

July 2024

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REGULATION NO. 003/2024 REVISING REGULATION NO. 002/2017 ON THE ACTIVITIES OF COMMERCIAL AGENTS IN BANKING OPERATIONS AND PAYMENT SERVICES

Having regard to Law No. 1/34 of December 2, 2008, establishing the Statutes of the Banque de la République du Burundi;

Having regard to Law No. 1/02 of February 4, 2008, on the fight against money laundering and the financing of terrorism;

Having regard to Law No. 1/34 of December 2, 2008, establishing the Statutes of the Banque de la République du Burundi and its implementing texts;

Having regard to Law No. 1/09 of May 30, 2011, establishing the Code of Private and Publicly Participating Companies;

Having regard to Law No. 1/01 of January 16, 2015, revising Law No. 1/07 of April 26, 2010, establishing the Commercial Code;

Having regard to Law No. 1/17 of August 22, 2017, governing banking activities and its implementing texts;

Having regard to Law No. 1/07 of May 11, 2018, establishing the national payment system;

Having regard to Law No. 001/10 of March 16, 2022, on the prevention and repression of cybercrime in Burundi;

Having regard to Regulation No. 002/2024 revising Regulation No. 001/2017 on payment services and the activities of payment institutions;

Having reviewed Regulation No. 002/2017 on the activities of commercial agents in banking operations and payment services.

The Banque de la République du Burundi, hereinafter referred to as the "Central Bank":

Enacts this Regulation.

Article 1: Object and Scope This Regulation specifies the rules and procedures relating to the activities of commercial agents of supervised establishments in banking operations and payment services.

Article 2: Definitions Within the framework of this Regulation, the terms cited below are understood as follows:

1. Commercial Agent, any person acting on behalf of and in the name of one or more supervised establishments as defined by this article;
2. Central Bank, the Banque de la République du Burundi;
3. Agency Contract, a mandate by which a person undertakes to provide, on a regular basis, financial services, in the capacity of a Commercial Agent, in the name and on behalf of a supervised establishment, in accordance with the agreed terms and conditions and in compliance with the provisions of this Regulation;
4. Supervised Establishment, any establishment authorized by the Central Bank to carry out one or more banking activities, such as credit institutions, payment institutions, microfinance institutions, and the National Post Office for its banking and/or microfinance activities subject to the authorization and control of the Central Bank.

Article 3: Use of Commercial Agents in Banking Operations and Payment Services

Supervised establishments may use the services of one or more Agents to exercise, on their behalf, within the limits of their authorization, payment service activities.

Any Agent acts pursuant to a mandate given by a supervised establishment. Agents are required to inform users of their status as agents when they come into contact with them.

An Agent may receive mandates from several supervised establishments.

Article 4: Creation of a Commercial Agency Relationship and Status of Commercial Agents

The supervised establishment must conclude a written contract with an entity for the provision, in its name, of payment services. The concluded contract must comply with the provisions of this Regulation and any other law in force.

Commercial agents act, independently, in the name and on behalf of the supervised establishments as defined in this Regulation.

A supervised establishment, as defined in the law governing banking activities, may act as a Commercial Agent on behalf of other supervised establishments.

Article 5: Selection Criteria for Commercial Agents No one may be a Commercial Agent of a supervised establishment if:

1. They have been declared personally bankrupt in Burundi or abroad and have not been rehabilitated;
2. They played a leading role in a company that, under their direction, was declared bankrupt, and have not been rehabilitated;
3. They are being prosecuted or have been convicted, in Burundi or abroad, as a perpetrator or accomplice and have not been rehabilitated for the following offenses:

a. counterfeiting; b. counterfeiting or falsification of public securities or commercial instruments, shares, bonds, interest coupons, or banknotes; c. counterfeiting or falsification of seals, stamps, punches, or marks; d. forgery and use of forgery; e. violation of exchange and foreign trade rules; f. corruption and related offenses; g. theft, extortion, embezzlement, breach of trust, fraud, or fencing; h. issuing checks without sufficient funds; i. bankruptcy or assimilated offenses; j. money laundering, financing of terrorism, or any other economic and financial crime.

4. They are in default with supervised establishments, which, in the view of the Central Bank, impairs their honorability;
5. They have violated the provisions of this Regulation in their previous performance as a Commercial Agent.

The functions of Commercial Agent for a supervised establishment are also incompatible with those of an employee or a member of a management or control body of that establishment.

Article 6: Registration of Commercial Agents Supervised establishments transmit to the Central Bank, for registration, the list of Agents they intend to use no later than one (1) month after recruitment, according to the template in the Annex to this Regulation.

Upon registration, in addition to the list of Commercial Agents, the supervised establishment transmits a copy of the model of the contract linking it to its agents.

Article 7: Responsibility of Commercial Agents and Their Mandators Supervised establishments are financially responsible, vis-à-vis their clients, for the proper conduct of operations carried out with them through the Commercial Agent, as if they had carried out the operation with their own employees, notwithstanding any contrary contractual clause. They guarantee the realization of fund repayment operations to the parties to the payment operation in the event of the Commercial Agent's default.

The mandating supervised establishment also remains fully responsible vis-à-vis third parties for the acts of any Agent it has mandated.

The mandating supervised establishment ensures that its Agents continuously comply with the legal and regulatory provisions applicable to them.

This responsibility does not prevent the mandating supervised establishment from providing, in its relations with the agent, a sharing of responsibilities in respect of commercial law, contract law, and financial law in force.

Article 8: Mandatory Provisions to Include in the Agency Contract Any agency contract must contain, at a minimum, the following information:

1. The rights, obligations, and responsibilities of each party;
2. The types of payment services the Commercial Agent intends to offer;
3. Operational procedures related to the provision of payment services;
4. Measures aimed at mitigating risks related to commercial agency activities, including client transaction limits, cash management, security of funds and premises, and insurance policy;
5. Requirements for the fight against money laundering and the financing of terrorism;
6. The obligation for the Commercial Agent to issue a receipt for each transaction performed;
7. The prohibition of imposing additional fees of any nature on clients;
8. Confidentiality of client and user information;
9. Consumer protection and dispute resolution;
10. The circumstances under which the contract may be modified or terminated, as well as the rights and obligations of each party in the event of termination of the agency contract.

Article 9: Powers of the Central Bank over Commercial Agents The Central Bank has the powers to:

1. order at any time the cessation of activity, temporary or permanent, of any Commercial Agent, when it considers that the conditions for carrying out operations are not met satisfactorily;
2. require at any time any modification of contractual or operational relations between the mandating supervised establishment and the Primary Commercial Agent or its Secondary Commercial Agent referred to in Article 14 below, when it deems it necessary;
3. access at any time, the documents, internal systems, personnel, and premises of the Commercial Agent as part of the control of its activities.

Article 10: Retention of Information The supervised establishment keeps up to date, at its registered office, information relating to each Commercial Agent it mandates. For savings and credit cooperatives organized in a network, files are kept at the registered office of the umbrella structure.

These information include in particular:

1. the contract(s) linking it to the agent;
2. the identification elements of the agent, namely: a. for natural persons, an official identity document bearing a photograph and a copy of the proof of registration in the commercial register; b. for legal entities, its statutes and proof of registration in the commercial register;
3. any information necessary to attest that the Commercial Agent complies with the provisions on incapacities and incompatibilities referred to in Article 5 of this Regulation;
4. any sufficient element relating to the ability of the Commercial Agent to fulfill their mandate and in particular the description of the technical and technological means available to them to carry out the mandate entrusted to them by the supervised establishment.

Article 11: Information to be Made Public Any supervised establishment ensures that any Commercial Agent it has mandated makes the following information known to the clientele and the public, by any appropriate means and in a visible and legible manner:

1. the corporate name, address, and trade name of the supervised establishment that mandated it;
2. its registration number and the address of the agents register allowing verification of this registration;
3. the list of financial services it offers;
4. the list of fees and commissions applied per financial service and paid by the client to the supervised establishment;
5. the dedicated telephone line for communication between clients and the supervised establishment.

Article 12: Physical and Technical Security of Operations The contract between the mandating supervised establishment and its Agent defines the physical, technical, and operational security standards to which the Commercial Agent is subject. These must be proportional to the risks incurred.

The agency contract must include the express commitment of the supervised establishment to ensure the realization of fund repayment operations to the parties to the payment operation in the event of the Commercial Agent's default.

Article 13: Authorized Activities and Operations Commercial agents are authorized to provide the following financial services:

1. deposit and withdrawal of cash;
2. receipt of cash payments for invoices;
3. receipt of cash payments of pensions for retirees and other social benefits;
4. receipt of cash payments of salaries;
5. fund transfers;
6. participation in the opening and/or closure of accounts.

For the purposes of paragraph 1 of this article, it is incumbent on the supervised establishment to determine, based on the risk assessment of the Commercial Agent, the services that the latter must provide.

All cash transactions carried out by the Commercial Agent must be made in local currency.

Article 14: Unauthorized Activities and Operations Commercial agents are prohibited from:

1. requesting fees and commissions directly from clients;
2. carrying out commercial agency activities when the supervised establishment notes that the initial commercial activity of the Commercial Agent has ceased or significantly decreased;
3. acting as guarantor for a supervised establishment or a client;
4. offering financial services for their own account;
5. continuing to offer commercial agency activities if their criminal record indicates they have been convicted of fraud, dishonesty, or any other financial irregularity;
6. offering a financial service that is not specifically authorized in the agency contract or authorized, in writing, by the supervised establishment;
7. handling the collection of checks;
8. carrying out transactions in foreign currencies;
9. granting overdrafts/advances on salary;
10. subcontracting another entity to carry out commercial agency activities in their name.

Article 15: Categorization of Commercial Agents The mandating supervised establishment may categorize its commercial agents into Primary Commercial Agents and Secondary Commercial Agents.

Any Primary Agent may have several Secondary Commercial Agents under their supervision.

The contract of the mandating supervised establishment with the Primary Commercial Agent specifies the conditions for the recruitment of Secondary Commercial Agents.

The sub-delegation contract to Secondary Commercial Agents is concluded between the mandating supervised establishment, the Primary Commercial Agent, and the Secondary Commercial Agent.

Sub-delegation does not modify the responsibility of the mandating supervised establishment vis-à-vis its clients and third parties as defined in Article 4 of this Regulation.

Article 16: Training of Agents The supervised establishment ensures that the Commercial Agents it mandates receive all necessary training for the fulfillment of their mandate.

Article 17: Professional Secrecy Commercial Agents are subject to professional secrecy in the framework of their mandate, on the same footing as the mandating supervised establishments.

Any violation of professional secrecy by the agent:

1. engages their responsibility vis-à-vis clients and the mandator(s);
2. constitutes an offense under this Regulation punishable by the prohibition of exercising the activity of Commercial Agent, without prejudice to possible judicial proceedings.

The contract between the supervised establishment and its Commercial Agent(s) settles issues related to the ownership of information contained in the database used for the realization of banking operations, in respect of standards related to professional secrecy.

In the event of rupture or end of the contract between the supervised establishment and the Commercial Agent, the latter can no longer use data covered by professional secrecy.

These data may nevertheless be provided to another supervised establishment in the context of a new mandate, insofar as this would not be contractually prohibited by their previous mandator.

Under no circumstances may a Commercial Agent use information covered by professional secrecy for personal purposes.

Article 18: Termination of the Agency Contract In addition to the provisions relating to the circumstances of termination of the agency contract stated in the contract, the agency contract is terminated if the Commercial Agent:

1. is guilty of a criminal offense related to fraud, dishonesty, or any other financial irregularity;
2. suffers a financial loss or damage to such an extent that, in the opinion of the supervised establishment, it is impossible for them to regain their financial solidity within three months following the date of the loss or damage;
3. is dissolved or in judicial liquidation;
4. moves or ceases their commercial agency activities without the prior written agreement of the supervised establishment;
5. violates the provisions of this Regulation that may occasion such a sanction.

For the purposes of paragraph 1 of this article, the termination of the contract may be initiated by one of the parties to the contract in accordance with the contractual clauses or ordered by the Central Bank pursuant to the provisions of Article 9 of this Regulation.

The supervised establishment must ensure that the Commercial Agent does not continue their commercial agency activities when they are affected by one or the other of the provisions of paragraph 1 of this article.

In the event of termination of the agency contract, the supervised establishment must notify it, in writing, to the Central Bank and inform the public by any means of the cessation of the agency contract.

Article 19: Entry into Force This Regulation enters into force on the date of its publication in the Official Bulletin of Burundi and on the website of the Central Bank.

Done in Bujumbura, on July 30, 2024.

Edouard Normand BIGENDAKO Governor

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ANNEX

Template for Presentation of Commercial Agents

No.	Agent Name	Representative	ID Card	Phone	Province

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