Angola approved a new Law regarding the Angolan Payments System, Law no. 40/20, of December 16, which revoked Law no. 5/05 of July 29.
The purpose of the new legislation is to adapt the legal framework to the actual volume of transactions in the Angolan market and between Angolan and international markets, and to the evolution of the financial products, which forced a modernization of the Payments System, promoting greater safety, effectiveness, and reliability. Law no. 40/20 also defines the proceeding which permits the establishment of the entities that intervene in the Payments System and rules related with their activity, intervention, supervision, and control. This reform demonstrates the actual importance of the Payments System to the Angolan economy.
After presenting the glossary with the relevant technical concepts adopted in the Law, the Angolan Legislator expressly defined that the Angolan Payments System safeguards public interests connected to objectives as safety, operational reliability, efficiency, and transparency.
Are considered Payments Services, the services which permit to deposit or raise currency in a payment account, execution of payment operations, issuance of payment instruments, acquisition of payment operations, issuance of electronic currency, among others, with relevant exceptions, as the payment operations performed directly without intermediation, and payment operations between Payments Services Providers and their agents or branches, by their own account.
The supervision and regulation of the Angolan Payments System will be made by the Angolan National Bank, who has authority to grant and revoke licenses for the constitution of Payments Services Providers and Operators, grant licenses for the constitution and operation of systems as the payments, deposits, and registries systems, regulate Payments Systems, demand specific information and execute inspections in Companies part of the Payments System, initiate contravention proceedings, apply sanctions (which are foreseen in the dense and severe penalty regime included in this Law), and control/influence price politics regarding the Payments System.
The Angolan National Bank will have powers as well to control and authorize any amendment to the By-Laws of System’s Companies and to demand the demerger of a Company which intends to be part of the System, separating Company sector which operates or provides Payments Services from other activities.
It is formed the Technical Commission for the Development of the Payments System, presided by the Angolan National Bank and composed by representants of the entities which intervein in the Angolan Payments System. This Commission is strictly consultive, analyzing regulation matters and defining strategies for the development of the System, with the purpose of assuring its modernization and efficiency.
Regarding the access to the function of Provider/Operator of the Payments System, the Government established an exclusivity principle. Only the entities foreseen, as banking institutions, companies which provide Payments Services, financial institutions, Angolan National Bank, and some public entities, among others, may provide these services.
To constitute a company which provides or operates Payments Services, is needed an authorization by the Angolan National Bank, granted after a request which needs to include several documents, as the project of By-Laws, activity program, geographic implementation, human resources information, related companies/people, safety proceedings, risk assessment and internal control proceedings and mechanisms, clients protection proceedings (as complaint proceedings or dispute settlement schemes), data protection policy, among others. The decision of Angolan National Bank shall be notified to the applicant until 3 months after the application.
The authorization expires if the Company activity is suspended for more than 6 months. It may as well be revoked, if the Company constitutes a threat to the stability of the Payments System or if it breaches severely the duties foreseen in this Law.
Entities that intervein in the Angolan Payments System shall maintain archived all the payments operations, and documents related with the provision and operation of services connected with the Payments System, for 10 years.
Each Payments System Operator shall establish rules to the administration, management and operation of the operated system, which need to contain norms regarding risk assessment, and management, governance, access and protection of the system, as well as regulations about duties and rights of the Operator and Users/Participants. These rules need to be approved by the Angolan National Bank, who may also order the amendment or revocation of any of the them.
This Law also establishes important rules regarding bankruptcy procedures. If the transfer or compensation order was made before the beginning of the bankruptcy procedure, it is considered effective and may be opposed against the Creditors. They may also be opposed the orders which are introduced in the system after the beginning of the bankruptcy procedure and are executed in the same workday, when the System Operator may prove that he did not had knowledge of the procedure and had not the obligation of knowing it. Warranties provided by the entities which participate in the System are not affected by any bankruptcy procedure or any other debts or liabilities of the participant entity.
The new legislation imposes several duties of information to the Payments Services Providers, in relation to Users/Consumers, as to transmit the relevant information in an easily comprehensible, clear, and simple way, which permits that people with the average visual acuity may read it. The Service Provider has the burden of proof concerning the fulfillment of the information duties. Angolan National Bank will foresee the concrete terms that the information provided shall respect.
Payments Services Users may unilaterally terminate the contract anytime, unless if the contract foresees a notice period, which cannot be largest than one month. The termination is exempt of any costs to the User, except if the contract was in force for only 6 months or less.
In regard to the payment operations incorrectly executed or non-authorized, the User may obtain the operation rectification if communicates to the Payments Services Provider the occurrence, on a 13 months period after the operation date. If the User denies having authorized the operation, the Provider has the burden of proof regarding the existence and validity of the operation order. If the operation was not authorized by the User, the Provider shall immediately reimburse the User. There are also foreseen the situations in which it is considered that the User contributed to the non-authorized operation (for example, if he knew that his payment instrument was stolen and have not informed the Provider).
This Law also establishes important rules regarding data protection. It is possible the treatment of personal data by the Payments Services Providers when they are necessary to prevent or detect fraud related to the services. In general, the Provider may accede only to the personal data which are necessary to provide the services and may treat that data merely if the User gave his express consent. Data treatment shall be notified to the Data Protection Agency and respect the Personal Data Protection Law.
Regarding dispute resolution, Law no. 40/20 divides disputes between the Providers/Operators and the Angolan National Bank, and disputes between Providers/Operators and Users. For the first type of disputes is established a three-step proceeding, which starts with the attempt of the parties to reach a consensus for five workdays; if the parties cannot agree in a solution, follows a mediation phase, for ten workdays; finally, if the mediator is not able to achieve a consensus between both parties, follows the arbitration stage, in which an arbitrator has ten days to solve the dispute. In the second kind of disputes, the Legislator foresaw an obligation for Payments Services Providers and Operators, of permitting that Users may access to alternative dispute resolution methods.
The new regulation does not affect the validity of previous debit authorizations. Regarding previous contracts, its validity is not affected as well, being applied to those cases the legal rules which are more favorable to the Users, however, Providers must adapt the contracts in force to the new legislation in a six-month period. The amendments shall be informed to the Users and are considered accepted if the Users do not notify of their opposition to the new conditions in a two-month period after the reception of the information. Users may oppose to the new conditions, terminating unilaterally their contract, without any cost.
With this new legal framework, the Angolan Government intends to establish fair, transparent and clear rules, regarding the operation, monitorization, regulation, and management of the Payments System, with the ultimate objective of enhance the growth of Angolan economy, assuring that the economic agents have the best conditions with regard to the Payments System.
Article by Duarte Marques da Cruz
Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialized in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.