Regulation No. 01-09 CEMAC-UMAC-COBAC Establishing the Central African Deposit Guarantee Fund

COMMUNAUTE ECONOMIQUE ET MONETAIRE DE L'AFRIQUE CENTRALE Regulation No. 01-09 CEMAC/UMAC/COBAC establishing the Deposit Guarantee Fund in Central Africa

MONETARY UNION OF CENTRAL AFRICA

Having regard to the Monetary Cooperation Convention of 22 November 1972; Having regard to the revised Treaty of the Economic and Monetary Community of Central Africa (CEMAC); Having regard to the revised Convention governing the Monetary Union of Central Africa (UMAC); Having regard to the Convention of 16 October 1990 establishing a Banking Commission of Central Africa (COBAC); Having regard to the Convention of 17 January 1992 on the Harmonization of Banking Regulations in the States of Central Africa; Having regard to Regulation No. 01/04/CEMAC/UMAC/COBAC establishing the Deposit Guarantee Fund in Central Africa of 31 March 2004; Having regard to the Banking Commission Regulations on the Net Own Funds of Credit Institutions; Having regard to the Statutes of the Bank of Central African States (BEAC);

After the advisory opinion of the BEAC Board of Directors, delivered during its session on 02 April 2009 in Bata, Republic of Equatorial Guinea; On the proposal of the Governor of the BEAC; In its session on 03 April 2009 in Bata, Republic of Equatorial Guinea.

PRELIMINARY TITLE
ON THE ESTABLISHMENT OF A DEPOSIT GUARANTEE FUND IN CENTRAL AFRICA

Article 1.
A Deposit Guarantee Fund in Central Africa is hereby established, hereinafter referred to as "the Fund", abbreviated FOGADAC, responsible for:

• compensating savers of a credit institution in the event of unavailability of their deposits as defined by a Banking Commission Regulation;
• providing assistance to a credit institution whose situation suggests that total or partial unavailability of deposits or all other refundable funds may occur in the near future.
  The conditions and procedures for the Fund's intervention are specified by this Regulation and subsequent texts.

Article 2.
The Deposit Guarantee Fund in Central Africa is a public institution of sub-regional scope, possessing legal personality and enjoying financial autonomy.

Article 3.
The Fund's headquarters are located within the General Secretariat of the Banking Commission of Central Africa (COBAC).

TITLE I
ON CREDIT INSTITUTIONS AND ELIGIBLE DEPOSITS

The deposit guarantee mechanism applies mandatorily to all credit institutions established in the territory or territories of one or more CEMAC States.

Article 5.
Creditor balances denominated in CFA francs, resulting from funds left on account or transitional situations arising from normal banking operations, which the credit institution must repay in accordance with applicable legal and/or contractual conditions, are guaranteed for the benefit of natural or legal persons, within the limits of intervention set out in Article 23 of this Regulation. These are:
a) demand or time deposits; b) passbook accounts; c) the creditor balance of current or ordinary accounts; d) guarantee deposits when they become due; e) amounts due in respect of named treasury bills, payment instruments of any kind, or other banking credit instruments denominated in CFA francs issued by the concerned credit institution; f) any other amounts due to clients in respect of banking operations ongoing on the date of account closure.

Article 6.
The following deposits are excluded from any reimbursement by the Guarantee Fund:

1. Deposits made by the following persons:
   a) States, central administrations, state agencies and local authorities; b) credit institutions and investment firms, in their own name and for their account; c) insurance companies; d) collective investment schemes for transferable securities; e) retirement and pension funds; f) personally liable and limited partners; g) shareholders holding at least 10% of the capital of the credit institution; h) members of the Board of Directors, approved managers and auditors of the institution, as well as any depositor holding the same qualities in other group companies and any third party acting on behalf of these persons; i) companies having, directly or indirectly with the credit institution, capital links conferring on one of the affiliated enterprises effective control over the others; j) other financial institutions.
2. Deposits resulting from operations for which a final criminal conviction has been pronounced against the depositor for money laundering or terrorist financing;
3. Deposits for which the depositor has obtained, individually, from the credit institution, interest rates and financial benefits that have contributed to worsening the financial situation of that institution;
4. Deposits for which the depositor has obtained advances and facilities of any kind from the institution, up to the amount of these facilities;
5. Eligible deposits and other assets for which the holder has made false declarations regarding the application of the deposit guarantee system or committed fraud, particularly in relation to this system or with regard to laws and regulations applicable to credit institutions or between them and their clients.
6. By virtue of their own nature:
   a) the liabilities forming part of the definition of the institution's own funds as provided for by the Banking Commission Regulations on Net Own Funds of Credit Institutions; b) non-named deposits other than amounts due in respect of payment instruments of any kind issued by the institution; c) negotiable credit instruments; d) other credit instruments against the credit institution and obligations arising from own acceptances and promissory notes; e) foreign currency deposits.

TITLE II
ON THE GOVERNING BODIES OF THE DEPOSIT GUARANTEE FUND IN CENTRAL AFRICA

Article 7.
The Fund comprises two bodies: the Management Committee and the Permanent Secretariat.

Chapter I
The Management Committee

Article 8.
The Management Committee is composed as follows:
the Governor of the Bank of Central African States, President or, in case of absence, the Vice-Governor as substitute; the Presidents of the Professional Associations of Credit Institutions. The General Secretary of the Banking Commission of Central Africa or, in case of absence, the Deputy General Secretary attends Fund meetings with a consultative vote. When called upon to rule on the Fund's interventions in a CEMAC State, the Management Committee is enlarged with the national monetary authority and the national Director of the Bank of Central African States. The monetary authority participates in voting within the Management Committee, while the national Director has only a consultative vote.

Article 9.
The Management Committee is responsible for:
defining the general policy of the Fund; ruling on the Fund's interventions in CEMAC States; deciding on the compensation procedures for depositors, within the limits set by a Banking Commission Regulation; and adopting the Internal Rules as well as the Financial Regulation determining the procedures for the collection, use, management and investment of the Fund's resources.

Article 10.
The sums received as reimbursement for travel, transportation and other expenses incurred in the interest of the Fund after written approval from its President are reimbursed. The functions of member of the Management Committee are unpaid. These expense reimbursements give rise to a special report by the statutory auditor.

Article 11.
Members of the Management Committee as well as all persons authorized to act on behalf of the Fund or its structures are bound by professional secrecy, which cannot be invoked against the judicial authority acting within the framework of a criminal procedure; nor against the Banking Commission of Central Africa.

Chapter II
The Permanent Secretariat

Article 12.
The day-to-day management of the Fund is entrusted to a Permanent Secretariat headed by a Permanent Secretary.

Article 13.
The Permanent Secretary is appointed and dismissed by the Management Committee on the proposal of the General Secretary of COBAC.

Article 14.
The Permanent Secretary reports on matters placed on the Fund's meeting agenda.

Article 15.
The Management Committee specifies the powers and operating procedures of the Permanent Secretariat.

TITLE III
ON THE ORIGIN AND PROTECTION OF THE FUND'S RESOURCES

Article 16.
The Fund is funded by contributions from credit institutions, the investment income from these contributions, donations and subsidies.

Article 17.
Credit institution contributions are based on collected deposits and doubtful claims net of provisions.
Credit institutions that do not collect public deposits or that collect deposits not eligible for coverage by the Guarantee Fund in case of a claim pay a fixed contribution. The methods of determination as well as the amounts of annual contributions and fixed contributions of credit institutions are set by a Banking Commission Regulation.

Article 18.
In the event of insufficient resources in the Guarantee Fund, supplementary contributions from credit institutions are called upon and, where applicable, state guarantees according to procedures defined by a Banking Commission Regulation.

Article 19.
An account is opened in the name of the Fund in the books of the Bank of Central African States.

Article 20.
Credit institution contributions, definitively acquired by the Fund and regardless of their form, are current expenses deductible from the tax base.

Article 21.
The Fund's claims in principal and accessories against a credit institution as part of the resources of the deposit protection system are privileged over the general body of movable and immovable property of that institution. For unpaid contributions, the rank of this privilege is that enjoyed by fiscal, customs and social security institution claims. Following a preventive intervention, the Fund's privilege ranks with that of creditors' expenses incurred for the conservation of the debtor's property in the interest of creditors.

Article 22.
The Fund's resources are protected against any attachment action carried out in its hands or in those of a third party.

Article 23.
The Fund's resources, as well as the income derived from investing these resources, are exempt from all taxes, duties and other charges.

Article 24.
The Fund is subrogated to the rights of beneficiaries of its intervention up to the amount it has paid.

Article 25.
The Guarantee Fund may bring any liability action against the de jure or de facto managers of credit institutions for which it intervenes, in order to obtain reimbursement of all or part of the amounts paid by it, and shall inform the Banking Commission thereof.

TITLE IV
ON THE LIMIT AND COMPENSATION PROCEDURES

Article 26.
The compensation limit for holders of deposits and other assets eligible for the guarantee mechanism is set at 5 million CFA francs per beneficiary and per credit institution.

Article 27.
Depending on particular circumstances, the Management Committee ruling unanimously may, after the advisory opinion of the Banking Commission, adjust reimbursement amounts to the Fund's intervention capacity, according to procedures defined by a Banking Commission Regulation.

Article 28.
A Banking Commission Regulation describes the compensation procedure for holders of deposits and other eligible assets.

Article 29.
Voluntary appeals regarding the compensation of depositors fall within the competence of the Management Committee.

Article 30.
The Management Committee's decisions on compensation are subject to judicial appeals before the Court of Justice of CEMAC, which rules as a court of first and last instance.

TITLE IV
ON THE PREVENTIVE ACTION OF THE FUND

Article 31.
The Guarantee Fund may provide assistance to enable the financial rehabilitation or total or partial takeover of a credit institution's activities whose proper completion is compromised, when the situation of that institution suggests that total or partial unavailability of deposits or all other refundable funds may occur in the near future. The procedures for the Guarantee Fund's preventive intervention benefiting credit institutions are set out in a Banking Commission Regulation.

TITLE VI
ON SANCTIONS

Article 32.
Without prejudice to sanctions provided by national legislations, violation of the provisions of this Regulation as well as those of texts taken by the Banking Commission in application of its provisions, are subject to sanctions provided for in Articles 15 of the Annex to the Convention of 16 October 1990, and Articles 39, 45 and following of the Annex to the Convention of 17 January 1992.

Article 33.
Without prejudice to sanctions provided by the Penal Codes of Member States of the Community, any person who has carried out maneuvers with a view to fraudulently obtaining the benefit of the compensation provided for in Article 23 of this Regulation, either for their own account or on behalf of a third party, shall be punished by imprisonment from one month to one year and a fine of 100,000 to 5,000,000 CFA francs.

TITLE VII
ON MISCELLANEOUS AND FINAL PROVISIONS

Article 34.
The organizational and operating procedures of the Guarantee Fund are specified by a Banking Commission Regulation.

Article 35.
The provisions of this Regulation may be amended by the Ministerial Committee of the Monetary Union of Central Africa, on the proposal of the BEAC Governor after the advisory opinion of the Management Committee.

Article 36.
This Regulation enters into force from the date of its signature and is published in the Official Bulletin of the Economic and Monetary Community of Central Africa.

20 APR 2009