Financial Crime World

The Congolese Banking System: Legislative Framework and Regulatory Measures

Overview

This article provides an analysis of the legislative framework regulating financial institutions in the Democratic Republic of Congo (DRC), focusing on laws and regulations governing money laundering, terrorist financing, and the proliferation of weapons of mass destruction.

Relevant Legislation

  • Constitution of 18 February 2006 as amended by Law No. 11/002 of January 2011: This law provides the foundation for regulating financial institutions in the DRC.
  • United Nations Security Council Resolutions Nos 1267, 1988, 1989, and 1373: These resolutions are incorporated into national laws to combat terrorism financing and money laundering.
  • 40 FATF recommendations and their subsequent updates: The Financial Action Task Force (FATF) recommendations are implemented to prevent money laundering and terrorist financing.
  • DRC mutual evaluation report: This report identifies areas for improvement in the DRC’s anti-money laundering and combating the financing of terrorism framework.

Establishment of Institutions

The following institutions have been established to combat financial crimes:

  • National Financial Intelligence Unit (CENAREF): Collects and processes financial intelligence on money laundering and terrorist financing.
  • Interministerial Committee on Combating Money Laundering and the Financing of Terrorism and Proliferation (CILB): Defines, facilitates, and coordinates government policy in this area.
  • Advisory Committee on the Fight Against Money Laundering and the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction (COLUB): Assists the Government in defining and implementing national policy.

Preventive Measures

To prevent financial crimes, the following measures have been implemented:

  • Constant monitoring by taxable persons: Financial institutions and companies are required to constantly monitor transactions for suspicious activity.
  • Limitations on cash transactions: Transactions exceeding US$10,000 may not be paid in cash or by bearer security.
  • Declaration of large amounts of currency: Individuals entering or leaving the DRC must declare cash and negotiable instruments exceeding US$10,000.

Sanctions Regime

The sanctions regime includes:

  • Freezing and seizure of assets: Assets belonging to perpetrators of money laundering, terrorist financing, and proliferation of weapons of mass destruction may be frozen and seized.
  • Tightening of sentencing regime: The penalties for these crimes are increased.

Fintech Developments

The DRC has seen an increase in the use of digital tools:

  • Internet banking services: Internet banking services have become more popular, allowing customers to manage their accounts online.
  • E-wallets and other digital tools: E-wallets and other digital tools are being adopted by financial institutions to improve customer experience.
  • National Digital Plan (PNN) - Horizon 2025: This plan aims to popularize artificial intelligence, connected objects, and other technological innovations.

Conclusion

The Congolese banking system is subject to regulatory control to prevent anomalies and ensure financial inclusion and consumer protection. The creation of common minimum standards of supervision aims to harmonize the banking system and promote reliable entities in the market. Continuous technological innovations require constant observation and adaptation of the system to follow international developments. Revisions, adaptations, and new laws will be taken to address challenges in terms of banking security and solvency of credit institutions.