Bank Act 1956
Under the Bank Act 1956 (prevailing text S.B. 173 of 2010) the Central Bank of Suriname (CBoS) is responsible for the supervision of banks, insurance companies, credit unions, pension funds, money exchange offices and money transfer offices and stock exchange and securities firms.
Article 9, sub d., mentions as one of the Bank’s duties: supervising the banking and credit sector, the pension and insurance sector, currency exchange operations, and transfers of financial resources from and to other countries, all on the basis of the applicable provisions of law; supervision is also aimed at ensuring the integrity of the institutions active in these sectors and sub-sectors.
Supervision of the Banking and Credit System Act 2011
The Supervision of the Banking and Credit System Act 2011, which was adopted in November 2011, replaces the Act on the Supervision of the Banking and Credit System 1968 (Bulletin of Acts, Orders and Decrees 1968 no. 63 as amended by Decree of 1986 no. 82).
The new legislation incorporates the Basel Core Principles and broadens the scope of supervision in general. Main elements are:
- A new licensing system in which the Central Bank is the only authority to grant a license to a credit institution. Formerly the Minister of Trade and Industry issued a banking license and the Bank issued a declaration of no objection;
- Fit and proper test of management, qualifying shareholders and directors of the board;
- The implementation of a deposit insurance system;
- Administrative penalty provision;
- Provisions to instruct the authorized organs of the credit institution to follow a particular line of conduct. If the institution does not comply as instructed, the Bank can place it under guardianship/undisclosed custody.
- Emergency regulations and bankruptcy provisions can be applied when a credit institution is affected by a development in which the interest of the joint creditors calls for special measures In such cases the Bank requests the Subdistrict Court to declare the emergency regulations.
- Provisions regarding cross-border supervision which allows for foreign supervisory agencies, subject to the Bank’s approval and conditions, to conduct their onsite inspections in Suriname in respect of affiliates and subsidiaries of credit institutions that are subject to their supervision.
Currently the five existing regulations on capital, credit classification & provisioning, large exposure, insider lending and investments in fixed assets are being revised. The supervision department is now working on the following regulations: foreign exchange risk, interest rate risk, liquidity risk, operational risk, internal audit, external audit and internal control and corporate governance
Supervision Money Transaction Offices Act 2012
The Central Bank of Suriname is responsible for the supervision of money exchange offices and money transfer companies and will also be entrusted with the supervision of the stock exchange and related companies.
The Supervision of Money Transaction Offices Act came into force in October 2012 and currently the Bank is drafting the guidelines for the implementation of this Act. Two types of money transaction offices, currency exchange offices and money remittance offices are under supervision of the CBoS. The Bank is the only licensing authority for these entities and has the authority to revoke these licenses. Supervision of the Bank includes: on-site inspection, review of annual statements of account and periodically statements within the relevant deadlines. The Bank may also conduct a special investigation under specific circumstances stipulated in the Act.
The Act also provides for requirements for directors, managers, supervisory directors and holders of a qualified holding of these entities. Furthermore the Bank has the authority to issue guidelines for the business operations and the administrative organisation of the money transaction office, including the financial accounting system and the internal auditing procedures. These include regulations regarding the combating of money laundering and financing of terrorism.
The Act has a provision to provide data or information to a supervisory authority or an authority charged with the supervision of other financial markets in another country in accordance with or pursuant to the law.
Lastly, the Central Bank has drafted an Act on the supervision of Capital Markets that is expected to be presented to Parliament this year.
Anti-Money Laundering and the Combating of Terrorist Financing Directive 2012
The CBvS’ authority to issue specific guidelines related to the combating of money laundering and the financing of terrorism stems from article 16 of the Banking and Credit System Supervision Act. In April 2012, the Central Bank issued an “Anti-Money Laundering and the Combating of Terrorist Financing Directive”.
The Money Transaction Offices Supervision Act 2012 and the draft Act on the supervision of Capital Markets also cover the area of AML/CFT supervision.
Update on the AML/CFT progress to meet the CFATF requirements
Since the last Mutual Evaluation in March 2009 Suriname has taken significant steps to comply with the CFATF Recommendations:
- Legislation regarding terrorism and terrorist financing has been promulgated (Act of July 29, 2011, embodying (further) amendment of the Penal Code, the Fire Arms Act and the Act Reporting Unusual Transactions related o criminalization of terrorist offences and the financing thereof (Official Gazette 2011 No. 96).
- By Act of 29 October 2012 (Official Gazette 2012 No. 169) the accession to the “International Convention for the Suppression of the Financing of Terrorism”, (UN, December 1999) has been approved.
- Suriname is in the process of reviewing the State Decree Indicators Unusual Transactions regarding the transaction amounts that are required for all financial institutions and the designated-non financial businesses and professionals. Also the threshold amounts are being reviewed.
- In May 2013 a draft Act on International Sanctions (regarding the freezing of funds and other financial assets) was presented to the Minister of Justice and Police.
- The U.S. Department of the Treasury provides technical assistance in strengthening the -Supervision Department by training and guiding the staff in conducting AML/CFT examination. A Manual for AML/CTF supervision has been prepared and is tested in the practical application during the onsite inspections.
- Meanwhile the Supervision Department (Banking Section) has conducted a first AML/CFT on-site examination at one of the commercial banks.
Insurance corporations and pension funds
The CBvS is the supervisor of the banking and credit system, a task that was expanded by amendment of article 9 in 2005, to explicitly include the pension funds, insurance companies, foreign exchange houses and money transfer companies.
By the 1986 amendment of the Banking and Credit System Supervision Act 1968, credit unions, insurance companies and pension funds were placed under prudential supervision of the CBvS.
For insurance companies the 1968 legislation remains in force, until the new Supervision Act on Insurance Companies comes into force. The Act has been drafted and it is scheduled to be enacted by the end of this year. The act has a similar framework as the Banking and Credit System Supervision Act 2011, except that the IAIS Core Principles will apply. Similarities include the licensing framework, the sanction policy, on and off site supervision and so on.
The Pension and Provident Fund Act 2005 continues to function as the main law governing Suriname's pension funds. Amendments to this Act, to strengthen supervision of pension funds, are being contemplated.