PROCLAMATION No. 718/2011
A PROCLAMATION TO PROVIDE FOR NATIONAL PAYMENT SYSTEM
WHEREAS, the national payment system is an essential component of the financial infrastructure of the country, whose safety, security and efficiency is critical to ensure financial stability, economic growth and financial inclusiveness;
WHEREAS, it has became necessary to provide rules on establishment, governance, operation, regulation and oversight of the national payment system so as to ensure its safety, security and efficiency;
NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia it is hereby proclaimed as follows:
1. Short Title
This Proclamation may be cited as the “National Payment System Proclamation No.718/2011”.
In this Proclamation unless the context requires otherwise:
1/ “book, record, account, document or information” means a book, record, account, document or information recorded or stored in any media including paper or data stored by electronic, optical, magnetic or in any other form;
2/ “card” means any card, or other device, including a code or any other means of access to an account, that may be used from time to time to obtain or deposit money or to make payment, and includes a debit, credit and stored-value card;
3/ “central counter party” means an entity that is the buyer to every seller and the seller to every buyer in a settlement system;
4/ “central securities depository” means an entity in whose register securities or other financial instruments are immobilized so as to enable their transactions to be finally processed by book entry;
5/ “clearing” means the process of transmitting, reconciling and confirming funds or securities transfer instructions prior to settlement and includes the netting of instructions and the establishment of final positions for settlement;
7/ “clearing system” means a system whereby participants present and exchange information relating to the transfer of funds, securities or other financial instruments to each other through a centralized system or at a single location and includes mechanisms for the calculation of participants’ positions on a bilateral or multilateral basis with a view to facilitating the settlement of their obligations;
8/ “electronic” mans electrical, digital, magnetic, optical, biometric, electrochemical, wireless or electromagnetic technology or any other technology used in relation to the national payment system;
9/ “electronic communication” mans electronic exchange of messages in a standardized format that allows:
a)visual display or listening of data that is clear and readily understandable; and
b)receiving and retaining the information in the message for subsequent retrieval such as by printing, recording or any other means for later use;
10/ “electronic equipment” means electronic terminal including computer, points of sale, automated teller machine, telephone and other similar devices;
11/ “electronic signature” means a data in an electronic form, affixed to or logically associated with, an electronic message, which may be used to guarantee the authenticity and identify the signatory in relation to the date message and to indicate the signatory’s approval of the information contained in the data message;
12/ “financial institution” means a bank, a micro-financing institution, postal savings, money transfer institution, an insurance company or such other similar institution as determined by the National Bank;
13/ “funds transfer” means any transfer of funds, either representing an order of payment or a transfer of money, which is initiated by a person by way of instruction, authorization or order to a financial institution to debit or credit an account maintained with that financial institution and includes point of sale transfers, automated teller machine transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, internet, card or other devices;
14/ “large value funds transfer system” means large value electronic fund transfers, the amount of which shall be determined by the National Bank, which consists of:
a)an inter-bank funds transfer system;
b)high priority and time critical government fund transfer;
c)clearing and settlement of securities of the government; or
d)any other fund transfer system prescribed by the National Bank as large value.
16/ “national payment system” means a system in the Federal Democratic Republic of Ethiopia that consists of the following :
a)sending, receiving and processing of orders of payment or transfers of money in domestic or foreign currencies:
b)issuance and management of payment instruments;
c) payment, clearing and settlement systems;
d)arrangements and procedures associated to those systems specified under paragraph (c) of this sub-article; and
e)payment service providers, including operators, participants, issuers of payment instruments and any third party acting on behalf of them, either as an agent or by way of outsourcing agreements, whether entirely or partially operating in the country;
17/ “netting” means the determination of the net payment obligations or the determination of the net termination value of settlement obligations by setting off or adjusting the payment obligations between two or more participants within the payment system;
19/ “participant” means a party who participates in a payment, clearing or settlement system as a direct participant which opens and maintains a settlement account at the National Bank or any other settlement entity or an indirect participant which shall only be able to settle its obligations due through the account of a direct participant;
20/ “payment instrument” means any instrument, whether tangible or intangible, that enables a person to obtain money, goods or service or to otherwise make payment or transfer money such as cheques, drafts and cards;
21/ “person” means any natural or juridical person;
22/ “retail funds transfer system” means a fund transfer system consisting of the cheque clearing system operated and administered by the National Bank and any type of retail fund transfer system authorized by the National Bank;
23/ “settlement” means the act of discharging obligations by transferring funds, securities or financial instruments between two or more parties;
24/ “settlement rule” means the rule that provide the basis upon which payment obligations are calculated, netted or settled;
25/ “settlement system” means a system for the discharge of payment and settlement obligations established and operated by National Bank or any other settlement system authorized by the National Bank;
26/ “stored value” means a representation of value that is intended to be used to make a payment which includes units of value recorded in a computer chip or any other device and may or may not be denominated by reference to units of a currency;
27/ “stored value card” means a prepaid card in which the record of funds can be increased or decreased;
28/ “system” includes a payment, clearing and settlement system;
29/ any expression in the masculine gender includes the feminine.
3. Scope of Application
This Proclamation shall be applicable to all matters related to the national payment system.
POWERS AND DUTIES OF THE NATIONAL BANK, AND ISSUANCE OF AUTHORIZATION
4. Powers and Duties
1/ The National Bank shall establish, own, operate, participate in, regulate and supervise:
a)an integrated payment system consisting of a large value funds transfer system and retail funds transfer system ; and
b) central securities depository.
2/ Without prejudice to the generality of sub-article (1) of this Article, in addition to the powers vested in it under Article 5(15) of Proclamation No. 591/2008, the National Bank shall have the powers and duties to:
a) authorize persons to:
(1) establish and operate a system; and
(2) issue payment instruments;
b) designate payment instruments that can be issued and determine conditions, limitations and standards for their issuance;
c) establish conditions, rules, procedures and standards for the governance, operation and management of systems and verify from time to time that such conditions, rules, procedures or standards are met;
d) prescribe to participants and operators:
/1/ investments in relation to building system infrastructure and system interoperability;
/2/ cost sharing;
/3/ charges for the service they provide; and
/4/ limits on the maximum amount of onetime cash payments.
e) prescribe the basic criteria for appointment of directors and chief executive officers of operators and issuers of payment instruments;
f) provide short term loans to participants or a central counterparty;
g) act as a central counterparty in relation to federal government securities;
h) provide custodian and settlement services to participants;
i)prescribe the nature, form, effectiveness and means of realization of collaterals used for smooth functioning of the national payment system;
j)issue an order to or enter into any agreement with an operator, participant, or a clearing house, in respect of:
(1) risk sharing and risk control
(2) the operational systems and financial soundness of clearing houses; and (3) such other matters that, in its view, pertain a risk to the financial system;
k)act as a forum for the consideration of matters of policy and mutual interest concerning the national payment system;
l)cooperate with monetary authorities in other countries and international organizations dealing with regulation and oversight of payment systems; and
m) perform any such other functions relating to the national payment system.
5. Authorization and Prohibition
2/ The Ethiopian Postal Service Enterprise, in its financial services activities as regulated by Council of Ministers Regulation No. 165/2009, shall be subject to the duty of obtaining an authorization and to any oversight requirements imposed by the National Bank under this Proclamation.
3/ Without the prior written approval of the
National Bank, no operator may:
a) introduce new system;
b)merge with or take over a system of another operator;
c)enter into any arrangement or agreement for the sale or disposal, by amalgamation or otherwise, of its business, or effect major changes in its line of business;
d)redeem its own shares or effect a reduction of its capital other than through reduction due to operating losses;
e) amend its memorandum and articles of association; or
f) alter the name under which it is authorized to operate a system.
4/ The National Bank may, by written notice, prohibit an operator from operating any system where:
a)the system is detrimental to the reliable, safe, efficient and smooth operation of the national payment system; or
b) the prohibition is otherwise in the interest of the public;
6. Application for Obtaining Authorization
1/ Application for authorization to establish and operate a system shall be submitted to the National Bank.
2/ An applicant for authorization shall pay authorization fee as may be prescribed by the National Bank.
3/ After the receipt of application, the National Bank may make such inquiries as it may consider necessary for the purpose of satisfying itself about the genuineness of the particulars furnished by the applicant, his capacity to operate a system, the credentials of the participants of the applicant’s system and any other matter related to the application.
4/ The National Bank may, if satisfied, after an inquiry under sub-article (3) of this Article, that the application is complete and conforms to the provisions of this Proclamation and directives issued by the Bank, issue an authorization for operating the system under this Proclamation having regard to the following considerations:
a)the need for the proposed system or the service proposed to be undertaken by the operator;
b)the technical standards or the design of the proposed system;
c)the terms and conditions of operation of the proposed system, including any security procedure;
d)the manner in which transfers may be effected within the system, including specifications on clearing and netting procedures;
e)the financial status, experience of management and integrity of the applicant;
f)interests of consumers, including the terms and conditions governing their relationship with operators, when relevant;
g)the impact on monetary and credit policies; and
h)such other factors as it may consider relevant in relation to the national payment system.
5/ The National Bank shall respond to the application submitted in accordance with sub-article (1) of this Article within 60 days of submission of all required information.
6/ The National Bank may prescribe information to be submitted by the applicant and other conditions required for authorization.
7. Suspension of Authorization
1/ Until such time as the short comings indicated below are rectified or the National Bank completes its investigation to decide whether to revoke the authorization, the National Bank may suspend an authorization where an operator:
a) has failed to observe this Proclamation, or regulations and directives issued hereunder
b)has failed to supply accurately and on time the information requested by the appropriate authority pursuant to this Proclamation;
c)failed to comply with the order issued by the National Bank; or
d)with whom the National Bank has reason to believe that the operator is dangerous to the safety, security and efficiency or financial stability of the country until it decides to revoke the license in accordance with Article 9(1) of this Proclamation.
2/ Where the authorization is suspended under sub-article (1) of this Article, the National Bank shall notify the operator, in writing, of the reasons of suspension and the measures to be taken to rectify the shortcomings with in a fixed period of time.
3/ The operator which has received a written notification pursuant to sub-article (2) of this Article shall have the obligation to rectify the shortcomings within the fixed period of time.
4/ Notwithstanding the provisions of sub-article
(1) to (3) of this Article, the National Bank may revoke the authorization of an operator when the occurrence of sub-article (1) of this Article threaten the safety, security and efficiency or financial stability of the country.
8. Effect of Suspension of Authorization
A suspended operator shall not involve in the activities it was authorized for under this Proclamation.
9. Revocation of Authorization
1/ Without prejudice to sub-article (3) of this Article, the National Bank may revoke an authorization where the operator;
a)was authorized on the basis of submission of false or wrong information;
b)operates the system contrary to the purpose and conditions subject to which the authorization was issued;
c)has repeatedly committed the faults specified in Article 7 of this Proclamation;
d)has failed to rectify the shortcomings within the fixed period of time as per Article 7 (3) of this Proclamation;
e)has failed to commence operation within 12 months following the issuance of authorization;
f) has become insolvent, dissolved or winds up; or
g) its business license has been canceled.
2/ Before deciding to revoke the authorization for the reasons specified in sub-article (1) of this Article, the National Bank shall require the operator to submit its written opinion on the anticipated revocation of the authorization. The authorization shall be revoked where the operator has not submitted his opinion within 30 days from the day the letter was received by him or his opinion is not adequate.
10. Use of Agents
1/ When a person provides services linked to payment instruments to customers through an agent, it shall immediately communicate the following information to the National Bank:
a)the name and address of the agent;
b)a description of the internal control mechanisms that will be used by the agent in order to comply with the obligations in relation to control money laundering and terrorist financing; and
c)the identity of persons responsible for the management of the agent in providing the services and evidence that they are fit and proper persons as may be prescribed by directive of National Bank.
2/ Upon receipt of the information in accordance
with sub-article (1) of this Article, the National Bank shall list the agent in a register available to the public.
3/ Before listing the agent in the register, the
National Bank may, if it considers necessary, verify the information provided to it.
4/ If the National Bank is not satisfied with the fitness and propriety of the agent, it may refuse to list the agent in the register in which case the principal shall discontinue the agency relation with this person and notify its customers.
5/ The National Bank may issue directive to prescribe the criteria for being an agent of operator and issuer of payment instruments.
11. Obligation to Ensure Compliance
When operators or issuers of a payment instrument rely on outsourced entities or agents for the performance of operational functions, they shall take reasonable steps to ensure that the requirements of this Proclamation and regulations and directives issued hereunder are complied with.
PART THREE SETTLEMENT, NETTING AND FINALITY
12. Settlement Account and Indirect Participation
1/ Every direct participant to a system shall open and maintain a settlement account on the books of the National Bank or authorized settlement system operator, including the maintenance of minimum balances, on such terms and conditions as the National Bank or authorized settlement system operator may specify.
2/ Every indirect participant to a system shall appoint a direct participant as its agent to settle all its obligations due.
3/ In the case where an indirect participant appoints an agent under sub-article (2) of this Article, the agent shall give the operator notice in writing of the appointment, accompanied by a written confirmation from the indirect participant.
4/ An agent, who intends to terminate its appointment under sub-article (2) of this Article, shall notify the operator in writing not less than 15 days before the date of termination of such appointment.
13. Settlement of Payments
1/ The discharge of settlement obligations between system participants shall be effected by means of entries passed through the National Bank or authorized settlement system on settlement accounts opened under sub-article (1) of Article 12 of this Proclamation.
2/ The settlement rules of the National Bank or authorized settlement system shall be valid and binding on operators, clearing houses, participants, a central counterparty, the National Bank itself and any other party participating in the system.
14. Finality of Payment
1/ Any system shall specify the rules to achieve finality of payment in its operations. This shall include rules establishing irrevocability of orders once these have entered into the books of the system.
2/ The entry or payment that has been effected in terms of rules issued under sub-article (1) of this Article shall be final and may not be revoked, reversed, or set aside, including, without limitation, by insolvency or bankruptcy proceedings or any other law or practice similar in purpose and effect and is not subject to any provision of law or order of an administrative or judicial authority that operates as a stay of that payment.
3/ The National Bank may issue directives to prescribe finality of payment, settlement, netting, and loss allocations and apportionment.
1/ Where an operator, a participant of a system or issuer of payment instruments becomes bankrupt, placed in scheme of arrangement or wound up it shall immediately lodge a copy of the decision or order with the National Bank.
2/ An operator, a participant or issuer of payment instruments which has lodged an order or a decision pursuant to sub-article (1) of this Article is prohibited from operating or participating in a system.
16. Winding Up or Placement in a Scheme of Arrangement of a Participant
Notwithstanding any provision of law to the contrary relating to insolvency or bankruptcy, the winding up or the opening of scheme of arrangement of a participant in a system shall not affect the finality or irrevocability of any entry or payment which became final and irrevocable in accordance with sub-article (2) of Article 14 of this Proclamation before the copy of the relevant order or decision was lodged with the National Bank.
17. Arrangements and Rules Binding Liquidators
Notwithstanding any provision of law to the contrary relating to insolvency or bankruptcy, if a participant is wound up or placed in a scheme of arrangement or otherwise declared insolvent by a court, any arrangement in relation to the national payment system to which the participant is a party or any netting rules or practices applicable to the system shall be binding upon the liquidator.
18. Collateral for Payment and Settlement Obligation
The rights and remedies of an operator, a participant, a clearing house, a central counterparty with respect to collateral granted to it as security for a payment or the performance of an obligation incurred in a system shall not be affected by insolvency or bankruptcy proceedings or any other law similar in purpose and effect. In particular, such rights and remedies may not be the subject of any stay provision or order affecting the ability of creditors to exercise rights and remedies with respect to the collateral.
PART FOUR ELECTRONIC FUND TRANSFER
19. Terms and Conditions
1/ Any issuer of payment instruments shall prepare clear and standard sample terms and conditions, in relation to electronic fund transfers and stored value cards, applicable to all its customers in similar manner and make it available for their review and possible agreement.
2/ Sample standard terms and conditions stated under sub-article (1) of this Article and any subsequent amendments thereof shall be subject to prior approval of the National Bank.
3/ The National Bank may prescribe by direct- ive basic terms and conditions to be applicable to contracting parties in the business of electronic fund transfers and stored value facilities.
20. Complaint Resolution
1/ Operators, participants and issuers of payment instruments shall establish internal complaint handling procedures in relation to electronic fund transfers and stored value facilities, and shall advise users on the procedures for lodging complaints.
2/ The National Bank may prescribe by direct- ive the procedures for investigating and handling complaints in relation to electronic fund transfers and stored value facilities.
21. Electronic Communication
1/ Where any law provides that information or any other matter shall be in writing, such requirement shall be deemed to have been satisfied if such information or matter is rendered or made available in an electronic form and accessible so as to be usable for subsequent reference.
2/ Notwithstanding any law or customary practice to the contrary, a user may agree that any information which any law or agreement requires an operator or a participant to provide by writing or other means may be provided:
a)to the user’s electronic equipment or electronic address nominated by the user; or
b)by being made available at the operator’s or participant’s electronic address for retrieval by electronic communication to the user on the condition that the operator or the participant:
(1) promptly notifies the user by electronic communication; and
(2)provides the user with the ability to readily retrieve the information by electronic communication.
22. Use of Shared Systems
1/ For the purposes of this Article, parties to a shared system include operators, participants, retailers, other merchants, communications service providers, and other entities providing electronic fund transfer facilities to users.
2/ The rights and responsibilities of parties to a shared system shall be determined by bilateral or multilateral agreement of the parties; provided, however, that the National Bank may, by directive, set basic rights and responsibilities to be incorporated in such agreements.
3/ Operators, participants or issuers of payment instrument may not avoid any obligations owed to their users by reason only of the fact that they are party to a shared system and that another party to the system has actually caused the failure to meet the obligations.
4/ Any operator, participant or issuer of payment instrument shall resolve complaints or disputes with its customers in relation to the processing of electronic fund transfers or stored value cards promptly through its internally established systems. Furthermore, such persons may not require its customers to present their complaints to any other party to the shared system, or to have those complaints or disputes investigated by any other party to the shared system.
23. Validity of Electronic Data
1/ Notwithstanding any provision to the contrary in any other law or customary practice, information as to any transfer of funds through a system which is contained in any document, computer print-out, hard copy, microfilm, floppy or hard disc or any other electronic media or form shall be admissible in any court as evidence of the transfer concerned.
2/ Photographic images such as film, microfilm, microfiche or computer images of original documents such as cheques, securities, certificates of deposits, account ledgers, government securities or other payment instruments shall be admissible as prima facie evidence of the matters or transactions of the original instrument.
3/ Payment instructions, messages and funds transfers that are initiated, processed or executed through electronic means including electronic signatures shall be admissible as prima facie evidence of the matters or transactions carried out.
24. Presentment of Image for Payments
1/ A cheque or other paper based payment instrument may be converted to an electronic data by the exchange and storage of its image and the corresponding information which shall represent the original instrument.
2/ The image of a cheque or any other paper based payment instrument transmitted through a system shall be recognized as the equivalent of the paper that it represents.
3/ Once payment is effected using the image, the original paper may not be negotiable and can be destroyed.
4/ If the transfer of funds is not effected for any reason using the image, the original item may be presented for payment.
5/ The National Bank may issue directive on imaging of paper based payment instruments and their processing.
PART FIVE REGULATION AND OVERSIGHT
25. Rules of Authorized Systems
1/ Each operator shall establish written rules for the governance, management and operations of a system that it runs.
2/ Rules established by an operator under sub-article (1) of this Article shall be approved by the National Bank.
3/ The National Bank may vary or revoke any rules of the operator established under sub-article (1) of this Article, where it considers appropriate to do so, having regard to:
a) whether the variation or revocation is in the public interest;
b)the interests of the participants in the system;
c)the interests of people who, in the future, may desire access to the system; and
d)any other matters it may consider relevant to smooth, safe and secure functioning of the system.
4/ The rules established in respect of an authorized system shall cease to be in force on:
a)the prescribed expiry date, if any, of such rules;
b)revocation of the rules by the National Bank;
c)voluntary cessation of operations by the operator; or
d) suspension or revocation of authorization of the operator.
26. Changes in a System
No operator may cause any change in the structure, operation or administration of its system without:
1/ prior approval of the National Bank; and
2/ giving notice of not less than thirty days, after the approval of the National Bank, to the other participants of the system.
27. Financial Records
1/ The National Bank may direct operators, participants, issuers of payment instruments and central counterparties to prepare financial statements in accordance with international financial reporting standards.
2/ Any institution which is referred to under sub-article (1) of this Article shall keep such records as are necessary to enable the National Bank to acertain in a manner:
a)exhibit clearly and correctly the state of its affairs;
b)explain its transactions and financial position; and
c)whether it had complied with the provisions of this Proclamation and regulations and directives issued for the implementation of this Proclamation.
3/ Operators, participants and issuers of payment instruments shall register and keep documents for each type of transaction. The form and required entries of such documents may be prescribed by the National Bank.
4/ Without prejudice to the provisions of the Ethiopian National Archives and Library Proclamation No. 179/1999, operators, participants, central counterparties, a clearing house and issuers of payment instruments shall retain all records obtained by them during the course of their operation and administration for a period of 10 years from the date of the establishment of a record.
5/ The retention of records under sub-article (4) of this Article may be effected by electronic means.
28. Audit and Examination
1/ The National Bank may conduct audits or commission independent auditors to conduct an audit of the accounts, books, documents and any other records of an operator, a participant, issuer of a payment instrument or a central counterparty; and each such entity shall assist the National Bank or its auditors to the extent necessary for carrying out the audit.
2/ The National Bank may, where it is of the opinion that it is necessary for the purposes of carrying out its functions under this Proclamation, examine, with or without any prior notice, the premises, apparatus, equipment, computer, machinery, books or other documents, accounts or transactions of an operator, a participant, issuer of a payment instrument or a central counterparty.
3/ An operator, a participant, issuer of a payment instrument or a central counterparty shall provide any information requested by the National Bank and produce all book, minutes, accounts, cash instruments, securities, vouchers, reports or any documents relating to its business or the business of its affiliates for the examination by any examiner or auditors appointed by the National Bank at such time and manner the National Bank, the examiner or auditor specifies.
4/ Any information obtained by the National Bank pursuant to sub-article (3) of this Article shall not be directly or indirectly disclosed to another person except:
a)for the purposes of fulfilling the requirements of this Proclamation;
b)it is necessary to ensure the financial integrity, effectiveness and security of the system;
c)to a recipient who is legally authorized to get such information;
d)ordered by a court of law;
e)to the body which the National Bank is accountable; or
f)it is required for the purpose of meeting obligations which Ethiopia has entered into under international agreements.
29. Appointment and Obligations of External Auditors
1/ An operator, a participant or payment instrument issuer shall appoint an external auditor. The appointment of such auditor shall be approved by the National Bank.
2/ If an operator, a participant or payment instrument issuer fails to appoint an external auditor satisfactory to the National Bank, the Bank may appoint an auditor for such person; and the remuneration of such auditor shall be determined by the Bank and paid by the person to whom the auditor is appointed.
3/ The National Bank shall determine the basic criteria for appointment and tenure of external auditors.
4/ Where in the course of the performance of his duties, the external auditor is satisfied that:
a)there has been a breach of or noncompliance with this Proclamation or regulation, directive, notice or order issued under this Proclamation; or
b)there is evidence that a criminal offence involving fraud or other dishonesty may have been committed;
he shall immediately report the matter to the auditee, the National Bank and other concerned law enforcement agencies.
5/ The National Bank may obtain copies of reports submitted to the auditee by both its internal and external auditors.
6/ An auditor appointed under sub-article (1) or
(2) of this Article or sub-article (1) of Article 28 of this Proclamation may not be liable for reason of compliance with sub-article (4) or
(5) of this Article or any request for information by the National Bank.
PART SIX MISCELLENEOUS PROVISIONS
30. Service Charges
The National Bank may collect service charges from operators, participants and issuers of payment instruments.
31. Settlement of Disputes
1/ Disputes among parties involved in the national payment system concerning any civil matter arising under this Proclamation shall be resolved by mediation.
2/ Where the disputes cannot be resolved through mediation as per sub-article (1) of this Article the matter shall be settled by arbitration.
3/ Without prejudice to provisions of the Civil Procedure Code relating to appeals, the arbitral award under sub article (2) of this Article shall be final and binding on the parties.
4/ The National Bank may issue directive for the resolutions of disputes arising in relation to national payment system in accordance with the provisions of this Article.
32. National Payment System Council
The government may establish a National Payment System Council which shall have an advisory role to the National Bank with regard to the national payment system.
33. Protection for Acts Done in Good Faith
No suit shall lie against the National Bank or officers, employees or agents of the National Bank in respect of anything done in good faith to implement this Proclamation or regulation or directive issued pursuant to this Proclamation, or order or customary practice.
34. Infringements and Administrative Measures
The National Bank may, as appropriate, take one or more of the following administrative measures against any operator, participant or issuer of payment instruments, where it determines that an infringement was committed on any provision of this Proclamation or regulations or directives issued pursuant to this Proclamation, or order or customary practice:
1/ issue written warning to the perpetrator;
2/ impose restrictions or fines on the perpetrator in an amount up to Birr 20,000 per day for each day that the infringement continues;
3/ suspend or dismiss directors, chief executive or other officers or employees of the perpetrator; or
4/ suspend or revoke the authorization of the perpetrator.
35. Offences and Penalties
1/ Unless a higher penalty is applicable under any other law any person who contravenes the provisions of sub-article (1) of Article 5 or sub-article (1) of Article 8 of this Proclamation shall be punished with a rigorous imprisonment from 10 to 15 years and with a fine of Birr 20,000 in respect of each day on which the contravention continues.
2/ If a director, a manager or an employee of an operator, a participant, or issuer of payment instrument:
a)obstructs the proper performance, to be conducted in accordance with this Proclamation, of an auditor or an inspector duly authorized by the National Bank; or
b)damages, destroys, alters or falsifies accounts, books or records of the operator, participant or issuer of payment instrument; or
c)makes false entries or fails to enter material items in the accounts of an authorized system; or
d)fails to provide information which is required to be disclosed pursuant to this Proclamation or regulation or directive issued hereunder or give false or inaccurate information; or
e)discloses any confidential information relating to any person except required or ordered by court, law, legally authorized person or National Bank; shall be punished with a rigorous imprisonment from 10 to 15 years and with a fine from Birr 50,000 to Birr 100,000.
3/ Whosoever without lawful authority makes, or forges or alters any payment instrument shall be punished with rigorous imprisonment from 10 to 15 years and with a fine from Birr 50,000 to Birr 100,000.
4/ Whosoever uses or attempts to use, exports, imports, purchases, acquires, accepts in trust, sells or offers for sale or donates any payment instrument which he knows to be forged, fictitious, altered, lost, stolen, expired, revoked or fraudulently obtained shall be punished with rigorous imprisonment from 5 to 15 years and with a fine from Birr 50,000 to Birr 100,000.
5/ Whosoever, with the intent of unlawful use of them, possesses, imports, exports or transfers machinery, mould, die, paper, metal or other material to be used for making any forged payment instrument shall be punished with rigorous imprisonment from 7 to 10 years and with a fine from Birr 50,000 to Birr 100,000.
a)furnishes goods, services or any other valuable interest upon presentation of a payment instrument which he knows is forged, fictitious, altered, lost, stolen, expired, revoked or fraudulently obtained; or
b)knowingly receives, conceals, uses, transfers or transports money, goods or services obtained by use of any forged, fictitious, altered, lost, stolen, expired, revoked or fraudulently obtained payment instrument; shall be punished with imprisonment from 2 to 5 years and with a fine.
a)without being an issuer or agent thereof, sells a payment instrument; or
b)buys a payment instrument from a person other than the issuer or its agent;
shall be punished with an imprisonment up to 3 years and with a fine up to Birr 5000.
8/ Without prejudice to the provisions from sub-article (1) to (7) of this Article, any person who contravenes or obstructs the implementation of other provisions of this Proclamation or regulations or directives issued hereunder shall be punished with an imprisonment up to 3 years and with a fine up to Birr 10,000.
9/ Without prejudice to the rights of third parties, any asset derived from the commission of an offence referred to in this Article shall be confiscated by the government.
36. Transitory Provisions
The provisions of this Proclamation shall apply on operators, participants, issuers of payment instruments and their agents conducting business on the effective date of this Proclamation within the time period to be specified by the National Bank.
37. Power to Issue Regulation and Directive
1/ The Council of Ministers may issue regulations necessary for the proper implementation of this Proclamation.
2/ The National Bank may issue directives and orders necessary for the proper implementation of this Proclamation and regulations issued pursuant to sub-article (1) of this Article.
38. Inapplicable Laws
No laws, orders or customary practices, shall, insofar as they are inconsistent with the provisions of this Proclamation, be applicable with respect to matters provided for by this Proclamation.
39. Effective Date.
This Proclamation shall enter into force up on the date of publication in the Federal Negarit Gazeta.
Done at Addis Ababa, this 18th day of July, 2011
PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA