(Unofficial translation)

Banking Code of the Republic of Belarus

October 25, 2000 No 441-З

[Amended as of June 30, 2020]

Adopted by the Chamber of Representatives on 3 October 2000
Approved by the Council of the Republic on 12 October 2000

TABLE OF CONTENTS

GENERAL PART

SECTION I. GENERAL PROVISIONS

CHAPTER 1. PRINCIPAL PROVISIONS

Article 1. Relations regulated by banking legislation

Article 2. Banking legislation of the Republic of Belarus

Article 3. Banking legislation and norms of international law

Article 4. Fundamentals of monetary and credit policy of the Republic of Belarus

Article 5. Financial and credit system of the Republic of Belarus

Article 6. Subjects and participants of bank legal relationships

Article 7. National Bank

Article 8. Bank

Article 9. Non-bank credit and financial organization

Article 10. Objects of bank legal relationships

Article 101. Official monetary unit of the Republic of Belarus

Article 11. Currency of monetary obligations

CHAPTER 2. BANKING ACTIVITIES

Article 12. Banking activities

Article 13. Principles of banking activities

Article 14. Banking operations. Other activities performed by banks and non-bank credit and financial organizations

Article 15. Types of banking operations

Article 16. Specific features of computation of time limits in banking activity

Article 17. Specific feature for establishment of limitation periods when carrying out banking activity

Article 18. State regulation of banking activities

CHAPTER 3. RELATIONSHIPS OF SUBJECTS AND PARTICIPANTS OF BANKING LEGAL RELATIONS

Article 19. Relationships between banks, non-bank credit and financial organizations and the state

Article 20. Relationships between banks and/or non-bank credit and financial organizations

Article 21. Participation of banks and non-bank credit and financial organizations in associations

Article 22. Relationships of banks and non-bank credit and financial organizations with customers

Article 23. Right of banks and non-bank credit and financial organizations to judicial protection of their violated or challenged rights and legitimate interests

SECTION II. NATIONAL BANK

CHAPTER 4. LEGAL STATUS, OBJECTIVES AND FUNCTIONS OF THE NATIONAL BANK

Article 24. The National Bank is the central bank and the state body of the Republic of Belarus

Article 25. Main objectives of activities of the National Bank

Article 26. Functions of the National Bank

Article 27. Fundamental monetary and credit policy guidelines of the Republic of Belarus

Article 28. Rights of the National Bank to issue money

Article 29. Rights of the National Bank to organize the circulation of banknotes and coins in the territory of the Republic of Belarus

Article 30. Rights of the National Bank in the sphere of monetary circulation

Article 31. Rights of the National Bank in the sphere of credit relations

Article 32. Rights of the National Bank concerning management of functioning of the payment system of the Republic of Belarus and its supervision

Article 33. Rights of the National Banks in the sphere of foreign currency regulation and currency control

Article 34. Rights of the National Bank in the sphere of bank supervision

Article 35. Specific features of carrying out the supervision of bank activities on a consolidated basis

Article 351. Monitoring of financial stability

Article 36. Right of the National Bank to judicial recourse

CHAPTER 5. SPECIFIC FEATURES OF FUNCTIONING OF THE NATIONAL BANK

Article 37. Interaction of the National Bank with the Government of the Republic of Belarus and other state bodies

Article 38. Submission of information to the National Bank

Article 39. Normative legal acts of the National Bank

Article 40. Property of the National Bank

Article 41. Authorized Fund of the National Bank

Article 42. Reserve fund and other funds of the National Bank

Article 43. Special reserves of the National Bank

Article 44. Profit (loss) of the National Bank

Article 45. [Excluded]

Article 46. Reporting of the National Bank

Article 47. Audit of the Reporting of the National Bank

Article 48. Restriction on participation of the National Bank in economic companies and other legal persons

Article 49. Delimitation of responsibilities of the National Bank, banks and non-bank credit and financial organizations

Article 50. Participation of the National Bank in international organizations

Article 51. Interrelationships between the National Bank and credit organizations of foreign states

CHAPTER 6. OPERATIONS OF THE NATIONAL BANK

Article 52. Operations performed by the National Bank

Article 53. Credit activity of the National Bank

Article 54. Operations of the National Bank with foreign currency, precious metals and precious stones

Article 55. Operations of the National Bank with securities

Article 56. Storage and carriage by the National Bank of cash monetary means, precious metals and precious stones, and other valuables

Article 57. Servicing the national debt of the Republic of Belarus

CHAPTER 7. STRUCTURE, GOVERNING BODY AND ORGANIZATIONS OF THE NATIONAL BANK

Article 58. Structure of the National Bank

Article 59. [Excluded]

Article 60. Board of the National Bank

Article 61. Formation of the Board of the National Bank

Article 62. Dismissal from office of the chairman and/or member(s) of the Board of the National Bank

Article 63. Adoption of decisions by the Board of the National Bank

Article 64. Chairman of the Board of the National Bank

Article 65. [Excluded]

Article 66. [Excluded]

Article 67. [Excluded]

Article 68. Employees of the National Bank

Article 69. Organizations of the National Bank

SECTION III. BANKS AND NON-BANK CREDIT AND FINANCIAL ORGANIZATIONS

CHAPTER 8. GENERAL PROVISIONS ON BANKS

Article 70. Bank Status

Article 71. Creation of the Bank

Article 72. Creation by a bank (participation in the creation) of commercial organizations

Article 73. Statute of the bank

Article 74. Bank Name

Article 75. Authorized fund of the bank

Article 76. Procedures for formation of authorized fund of a bank

CHAPTER 9. STATE REGISTRATION OF BANKS

Article 77. General provisions on the state registration of banks

Article 78. [Excluded]

Article 79. Procedure for submission of documents necessary for state registration of a bank

Article 80. Documents necessary for state registration

Article 81. Adoption of the decision on state registration of a bank

Article 82. Reasons for denial of state registration of a bank

Article 83. Actions of a bank after its state registration

Article 84. State registration of changes and/or additions introduced into the statute of a bank

CHAPTER 10. SEPARATE AND STRUCTURAL DIVISIONS OF A BANK

Article 85. Affiliate of the bank

Article 86. [Excluded]

Article 87. Carrying out banking operations and other activities by a bank outside the location of the bank, bank affiliate

Article 88. Banks representative office

CHAPTER 11. SPECIFIC FEATURES OF CREATION AND ACTIVITIE OF A BANK FOUNDERS (SHAREHOLDERS) OF WHICH ARE FOREIGN INVESTORS. REPRESENTATIVE OFFICE OF A FOREIGN BANK IN THE TERRITORY OF THE REPUBLIC OF BELARUS. SPECIFIC FEATURES OF ESTABLISHMENT OF SUBSIDIARY BANKS, OF OPENING AFFILIATES AND REPRESENTATIVE OFFICES OF RESIDENT BANKS OUTSIDE THE REPUBLIC OF BELARUS PARTICIPATION OF BANKS-RESIDENTS IN AUTHORIZED FUNDS OF FOREIGN BANKS

Article 89. [Excluded]

Article 90. Additional requirements made for creation and activities of banks in the Republic of Belarus, the founders (shareholders) of which are foreign investors

Article 91. Foreign banks representative office

Article 92. Specific features of establishment of subsidiary banks, of opening affiliates and representative offices of resident banks outside the Republic of Belarus Participation of banks-residents in authorized funds of foreign banks

CHAPTER 12. LICENSING OF BANKING ACTIVITIES

Article 93. General provision on licensing of banking activities

Article 94. Licensing requirements for obtaining a license to carry out banking activities

Article 95. Procedure for obtaining license to carry out banking activities and introducing changes and/or additions into the license

Article 96. Grounds for denial of issuing license to carry out banking activities or of introducing changes and additions into license

Article 97. Grounds for suspension, reinstatement of license to carry out banking activities and its revocation

Article 98. Suspension and reinstatement of license to carry out banking activities

Article 99. Revocation of licenses to carry out banking activities and consequences thereof

Article 100. [Excluded]

CHAPTER 13. REORGANIZATION AND LIQUIDATION OF BANKS

Article 101. Reorganization of a bank

Article 1011. Specific features of state registration upon reorganization of the bank

Article 102. Liquidation of a bank

Article 103. Termination of activities and obligations of a bank upon its liquidation

Article 104. Priority of depositors’ and creditors’ claims settlement at bank liquidation

CHAPTER 14. GENERAL PROVISIONS ABOUT NON-BANK CREDIT AND FINANCIAL ORGANIZATIONS

Article 105. Organizational and legal form of non-bank credit and financial organization

Article 106. Name of a non-bank credit and financial organization

Article 107. State registration and licensing of non-bank credit and financial organizations

Article 108. Reorganization and liquidation of non-bank credit and financial organizations

SECTION IV. ENSURING STABILITY OF BANKING ACTIVITIES. LIABILITY OF SUBJECTS AND PARTICIPANTS OF BANKING RELATIONS

CHAPTER 15. ENSURING STABILITY OF BANKING ACTIVITIES. Protection of Rights and Interests OF DEPOSITORS and Other Creditors of Banks

Article 109. Ensuring financial soundness of a bank

Article 1091. Requirements to the organization of corporate management of a bank, risk management and internal control

Article 110. Required reserves fund allocated in the National Bank

Article 111. Safe operation standards established for banks

Article 112. Minimum size of regulatory capital

Article 113. Liquidity standards

Article 114. Regulatory capital adequacy standards

Article 115. Standards of limitation of risk concentration

Article 116. Foreign currency risk restriction standards

Article 117. Standards of bank participation in authorized funds of other commercial organizations

Article 118. Safe operation standards established for the purposes of carrying out bank supervision on a consolidated basis

Article 1181. Informing the National Bank

Article 119. Reports to be submitted to the National Bank

Article 1191. Disclosure of information

Article 120. Guarantees for repayment of means attracted by banks from natural persons

Article 121. Bank secrecy

Article 122. Restrictions of banks activities and their participation in authorized funds of other legal persons

Article 123. Requirements to the head of a bank, his deputies, members of banks collegiate executive body and other persons when banks shares are acquired

Article 124. Banks’ transactions with own shares

Article 125. Bank activity on attracting deposits and extending credits

Article 126. Methods of securing fulfillment of obligations under contracts concluded by banks

CHAPTER 16. IMPOSING ARREST AND LEVYING EXECUTION ON MONETARY MEANS AND OTHER PROPERTY HELD IN BANKS. Suspension of Operations on Accounts in Bank

Article 127. General provisions of imposing arrest and levying execution on monetary means and other property held in banks

Article 128. Imposing arrest and levying execution on monetary means and other property held in banks of a legal person and individual entrepreneur held in a bank

Article 129. Imposing arrest on monetary means and other property of a natural person held in bank

Article 130. Imposing arrest on monetary means and other property of a bank

Article 131. Confiscation of monetary means and other property of a natural and legal person

Article 132. Suspension of operations on accounts in bank

CHAPTER 17. LIABILITY OF SUBJECTS AND PARTICIPANTS OF BANKING RELATIONS

Article 133. Liability for carrying out banking activities without the license to carry out banking activities

Article 134. Measures of supervisory reaction applied by the National Bank

Article 1341. Measure of influence applied by the National Bank

Article 135. Liability of bank or non-bank credit and financial organization for damage to depositors and other creditors

Article 136. Liability of the National Bank, banks, or non-bank credit and financial organizations for damage caused as a result of freezing of funds, blocking financial operations, suspension of operations on accounts, imposing arrest or levying execution on monetary means and other property, establishing other prohibitions (restrictions)

SPECIAL PART

SECTION V. ACTIVE BANKING OPERATIONS

CHAPTER 18. BANK CREDIT

Article 137. Credit contract

Article 138. Determining the day of granting credit

Article 139. Form of credit contract

Article 140. Material conditions of credit contract

Article 1401. Right of the borrower to receive a document confirming the fact of credit contract conclusion

Article 141. Lender's refusal to enter into credit contract

Article 142. Borrower's refusal to receive credit

Article 143. Early return (repayment) of credit

Article 144. Intended use of credit

Article 145. Interest for using credit

Article 146. Insurance by the lender of the risk of non-return (non-repayment) of credit and/or of delay of return (repayment) of credit

Article 147. Methods of securing fulfillment of obligations under credit contract

Article 148. Guarantee money deposit

Article 149. Transfer of legal title to property to lender

Article 150. Specific features of crediting natural persons

Article 151. Line of credit

Article 152. Inter-bank credit contract

CHAPTER 19. FINANCING AGAINST MONETARY CLAIM ASSIGNMENT (FACTORING)

Article 153. Financing against monetary claim assignment (factoring)

Article 1531. Factoring contract

Article 154. Classification of factoring contracts

Article 1541. Factoring operations

Article 155. Subject of assignment under factoring contract

Article 156. Fulfillment of monetary claim by debtor

Article 157. Agreement on prohibiting (limiting) assignment of monetary claim

Article 158. Subsequent assignment of monetary claim

Article 159. Rights of factor to monetary obligation sum paid by debtor

Article 160. Counterclaims of debtor against claims of factor

Article 161. Repayment to debtor of monetary obligation sum paid to factor

Article 162. Creditor's liability to factor

Article 163. Hidden factoring

CHAPTER 20. BANK GUARANTEE. SURETYSHIP

Article 164. Concept of bank guarantee

Article 165. Terms and form of bank guarantee

Article 166. Securing by bank guarantee of obligation of principal

Article 167. Independence of guarantor's undertaking under bank guarantee from underlying obligation

Article 168. Irrevocability of bank guarantee

Article 169. Transfer of bank guarantee

Article 170. Effectiveness of bank guarantee

Article 171. Demand of beneficiary under bank guarantee

Article 172. Guarantor's duties upon receipt of beneficiary's demand under bank guarantee

Article 173. Time limit for examining by guarantor of beneficiary's demand under bank guarantee

Article 174. Guarantor's refusal to satisfy beneficiary's demand under bank guarantee

Article 175. Limits of guarantor's undertaking under bank guarantee

Article 176. Termination of undertaking of guarantor under bank guarantee and of principal under underlying obligation

Article 177. Guarantors recourse demands toward principal

Article 178. Suretyships of bank and non-bank credit and financial organization

SECTION VI. ACTIVE BANKING OPERATIONS

CHAPTER 21. BANK DEPOSIT

Article 179. Concept of bank deposit

Article 180. Right to accept monetary means in deposits

Article 181. Bank deposit contract

Article 182. Types of bank deposit contract

Article 183. Form of bank deposit contract

Article 184. Material terms and conditions of bank deposit contract

Article 185. Depositors and theirs rights

Article 186. Depositors’ right to recover deposits

Article 187. Interest on deposit

Article 188. Procedure for calculation and payment of interest on deposit

Article 189. Placing monetary means on deposit account of depositor by other persons

Article 190. Deposits in the name of other persons

Article 191. Bank deposit of precious metals and/or precious stones

Article 192. Savings book

Article 193. Types of savings book

Article 194. Nominal savings book

Article 195. Bank savings book to bearer

Article 196. Savings certificate and deposit certificate

CHAPTER 22. BANK ACCOUNT

Article 197. Current (settlement) bank account contract

Article 198. Account holders under current (settlement) bank account contract

Article 199. Order of the conclusion of current (settlement) bank account contract

Article 200. Order for disposal of monetary means on current (settlement) bank account

Article 201. Current (settlement) bank account operations

Article 202. Time limit for performing current (settlement) bank account operations

Article 203. Remuneration (fee) for services of bank or non-bank credit and financial organization

Article 204. Interest for using monetary means being on current (settlement) bank account

Article 205. Priority of debiting monetary means from current (settlement) bank account

Article 206. Termination of obligations under current (settlement) bank account contract

Article 207. Indisputable debiting monetary means from payers’ accounts

Article 2071. Special account contract, sub-account contract

Article 208. Temporary account contract

Article 209. Correspondent account contract

Article 210. Charity account contract

Article 211. Order of opening certain accounts in bank

Article 212. [Excluded]

CHAPTER 23. TRUST MANAGEMENT OF MONETARY MEANS

Article 213. Contract of trust management of monetary means

Article 214. Legal regulation of trust management of monetary means

Article 215. Form of contract of trust management of monetary means

Article 216. Material terms and conditions of contract of trust management of monetary means

Article 217. Subject matter of contract of trust management of monetary means

Article 218. Use of monetary means transferred to trust management

Article 219. Procedure for transferring monetary means into trust management

Article 220. Forms of trust management of monetary means

Article 221. Full trust management of monetary means

Article 222. Trust management of monetary means by agreement

Article 223. Trust management of monetary means by order

Article 224. Protection of trustee's rights

Article 225. Pooling of monetary means of several settlors by trustee

Article 226. Accounting by trustee of monetary means and securities in trust management

Article 227. Transfer of management powers

Article 228. Fiduciary (trust) account contract

Article 229. Right of ownership of settlor of monetary means securities being in trust management

Article 230. Closing fiduciary (trust) account

SECTION VII. INTERMEDIARY BANKING OPERATIONS

CHAPTER 24. SETTLEMENTS

Article 231. Settlements

Article 232. Effecting of settlements by way of bank remittance based on payment instructions

Article 233. Form of payment instructions

Article 234. Imposition of duty on payment instructions execution on another bank

Article 235. Customers right to change and cancel payment instructions

Article 236. Time limits for payment instructions execution

Article 237. Bank's liability for non-execution or undue execution of payment instructions

Article 238. Cases of exempting bank from liability for non-execution or undue execution of payment instructions

Article 239. Remittance order

Article 240. Execution of remittance order

Article 241. Effecting remittance of monetary means by remittance order

Article 242. Conditions of acceptance of payer's remittance order by remitting bank

Article 243. Acceptance of remittance order for execution by remitting bank

Article 244. Remitting banks refusal to accept remittance order

Article 245. Acceptance of remittance order by receiving bank

Article 246. Receiving banks refusal to accept remittance order

Article 247. Procedure for execution of remittance order by receiving bank

Article 248. Time limit for execution of remittance order by remitting bank and receiving bank

Article 249. Remittance order modification and revocation

Article 250. Debiting monetary means credited to account due to technical error

Article 251. Intermediary bank (settlement center)

Article 252.  Payment demand

Article 253. Payment order

Article 2531. Direct account debiting

Article 254. Letter of credit

Article 255. Types of letter of credit

Article 256. [Excluded]

Article 257. Irrevocable letter of credit. Confirmed letter of credit

Article 258. Transferable letter of credit

Article 259. Standby letter of credit

Article 260. Relations between applicant and issuing bank

Article 261. Relations between issuing bank (confirming bank) and beneficiary

Article 262. Legal status of executing bank

Article 263. Standby letter of credit

Article 264. Relations between beneficiary and applicant

Article 265. Termination of issuing banks obligations under letter of credit

Article 266. Domestic and international letters of credit

Article 2661. Bank payment obligation

Article 2662. Issue of bank payment obligation

Article 2663. Termination of obligations under bank payment obligation

Article 267. Concept and forms of collection

Article 268. Duties of remitting bank

Article 269. Obligations of presenting bank

Article 270. Liability of presenting bank

Article 271.  Specific features of international collection

Article 272. [Excluded]

Article 273. Bank payment card

Article 274. Electronic money

Article 275. Legal regulation of settlements in cashless form

CHAPTER 25. CURRENCY EXCHANGE TRANSACTIONS

Article 276. Currency exchange transactions

Article 277. Procedures for performance of foreign currency operations

CHAPTER 26. BANK SAFEKEEPING. TEMPORARY USE OF BANK STRONGBOX

Article 278. Bank safekeeping contract

Article 279. Bank safekeeping items

Article 280. Form of bank safekeeping contract

Article 281. Types of bank safekeeping

Article 282. Close bank safekeeping

Article 283. Strongbox bank safekeeping

Article 284. Open bank safekeeping

Article 285. Verification of bailors identity

Article 286. Providing individual bank strongbox to another person for temporary use

CHAPTER 27. COLLECTION AND CARRIAGE OF CASH MONETARY MEANS, PRECIOUS METALS AND PRECIOUS STONES AND OTHER VALUABLES

Article 287. Collection and carriage of cash monetary means, precious metals and precious stones and other valuables

Article 288. Conditions and limits of the use of physical force, application and use of weapons

Article 289. Application of physical force

Article 290. Application and use of weapons

GENERAL PART

SECTION I
GENERAL PROVISIONS

CHAPTER 1
MAIN PROVISIONS

Article 1. Relations regulated by banking legislation

Relations regulated by banking legislation constitute a system of economic social relations to mobilize and use temporarily disengaged monetary means. Banking legislation determines principles of banking activity and legal status of subjects of bank legal relationships, regulates relations between them, and sets forth procedures for the establishment, functioning, reorganization, and liquidation of banks and non-bank credit and financial organizations.

Property relations as well as non-property relations associated therewith which arise when carrying out banking activity are also regulated by civil legislation, having regard to the specific provisions stipulated by this Code.

Relations connected with the issue (issuance), circulation and redemption of securities, carrying out of professional and exchange activity on securities, use of budgetary and foreign currency means as well as other relations connected with the activity of banks and non-bank credit and financial organizations are regulated by special legislation, unless otherwise stipulated by this Code.

Article 2. Banking legislation of the Republic of Belarus

Banking legislation of the Republic of Belarus is a system of normative legal acts that regulate relations arising when carrying out banking activity and establish the rights, duties and liability of subjects and participants of bank legal relationships.

Banking legislation acts include:

legislative acts of the Republic of Belarus;

administrative orders of the President of the Republic of Belarus of a normative nature;

resolutions of the Government of the Republic of Belarus;

normative legal acts of the National Bank of the Republic of Belarus (hereinafter – the National Bank); and

normative legal acts adopted by the National Bank jointly with the Government of the Republic of Belarus or with republican bodies of state administration on the basis of and in compliance with this Code and other legislative acts of the Republic of Belarus.

Article 3. Banking legislation and norms of international law

The Republic of Belarus recognizes the priority of generally recognized principles of international law and ensures the compliance of banking legislation therewith.

Norms of banking legislation contained in the treaties of the Republic of Belarus, entered into force, are an integral part of the banking legislation which is in force in the territory of the Republic of Belarus. They are to be applied directly, unless the treaty provides that a national normative legal act is to be adopted (issued) for the application of such norms, and have the force of a legal act whereby the consent of the Republic of Belarus to be bound by the treaty have been expressed.

Article 4. Fundamentals of monetary and credit policy of the Republic of Belarus

Monetary and credit policy of the Republic of Belarus is an integral part of the single state economic policy.

Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus that are annually approved by the President of the Republic of Belarus on proposal of the National Bank and the Government of the Republic of Belarus constitute the legal ground of monetary and credit policy of the Republic of Belarus.

Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus contain key parameters of monetary sector development, determine objectives, tasks, and priorities of state monetary and credit policy, and provide for a set of measures and mechanisms for their regulation and control which ensure their implementation.

Article 5. Financial and credit system of the Republic of Belarus

The banking system of the Republic of Belarus is an integral part of the financial and credit system of the Republic of Belarus. The banking system of the Republic of Belarus is a two-tier system, which includes the National Bank and other banks.

The financial and credit system of the Republic of Belarus includes, along with banks, non-bank credit and financial organizations.

Article 6. Subjects and participants of bank legal relationships

Subjects of bank legal relationship are the National Bank, banks, and non-bank credit and financial organizations.

The Republic of Belarus, its administrative-territorial units, including in the name of state bodies, as well as natural persons, individual entrepreneurs and legal persons may be participants of bank legal relationships unless otherwise stipulated by this Code.

The rules of this Code applied to natural persons apply also to individual entrepreneurs, unless otherwise stipulated by this Code.

Article 7. National Bank

The National Bank is the central bank and a state body of the Republic of Belarus. The National Bank regulates credit relations and money circulation, determines settlement procedures. The National Bank has the exclusive right to emit money and exercise other functions stipulated by this Code and other legislative acts of the Republic of Belarus.

Article 8. Bank

A bank is a legal person that has the exclusive right to perform the following banking operations, combined:

attracting monetary means of natural persons in accounts and/or deposits;

placement of attracted monetary means specified in indent two of this part in the own name and at the own costs on the conditions of repayment, interest payment, and maturity;

to open and operate bank accounts for natural and/or legal persons.

A bank is entitled to perform other banking operations and engage in other kinds of activities stipulated in Article 14 of this Code.

Article 9. Non-bank credit and financial organization

A non-bank credit and financial organization is a legal person which has the right to perform certain banking operations and activities stipulated in Article 14 of this Code.

The list of banking operations which may be performed by non-bank credit and financial organizations and their permissible combinations are prescribed by the National Bank.

Dispositions stipulated for banks apply when non-bank credit and financial organizations are created, reorganized, operated and liquidated, unless otherwise established by this Code and other banking legislation of the Republic of Belarus.

Article 10. Objects of bank legal relationships

The objects of bank legal relationship are money (foreign currency), securities, precious metals, precious stones, and other valuables.

Article 101. Official monetary unit of the Republic of Belarus

The official monetary unit of the Republic of Belarus is the Belarusian ruble. One Belarusian ruble is equal to 100 Belarusian kopecks.

Article 11. Currency of monetary obligations

Monetary obligations in the territory of the Republic of Belarus must be expressed in the official monetary unit of the Republic of Belarus.

A monetary obligation may provide that it is to be fulfilled in the official monetary unit of the Republic of Belarus in the amount equivalent to a certain sum in a foreign currency or in conventional (calculated) monetary units. In that case the amount payable in the official monetary unit of the Republic of Belarus is determined at the official exchange rate of the relevant currency or of conventional (calculated) monetary units on the date of payment unless a different exchange rate or a different date for determining the exchange rate is stipulated by the legislation of the Republic of Belarus or by agreement between the parties.

The use of foreign currency and also securities and payment instructions in foreign currency in monetary obligations in the territory of the Republic of Belarus is allowed in cases, in the order and on conditions determined by legislation of the Republic of Belarus.

CHAPTER 2
BANKING ACTIVITIES

Article 12. Banking activities

Banking activity is a combination of banking operations performed by banks and non-bank credit and financial organizations aimed at obtaining profit.

Article 13. Principles of banking activities

The fundamental principles of banking activity are:

obligatory obtainment by banks and non-bank credit and financial organizations of a special permit (license) for carrying out banking operations (hereinafter – license to carry out banking activities);

independence of banks and non-bank credit and financial organizations in their activities, non-interference of state authorities in their functions, except for the cases stipulated by legislative acts of the Republic of Belarus;

delimitation of responsibilities between banks, non-bank credit and financial organizations and the state;

obligatory compliance with economic standards prescribed by the National Bank for the purpose of maintaining stability and sustainability of the banking system of the Republic of Belarus;

ensuring the right of natural and legal persons to select a bank or a non-bank credit and financial organization;

ensuring bank secrecy of transactions, accounts, and deposits of customers; and

ensuring the repayment of monetary means to depositors.

Article 14. Banking operations. Other activities performed by banks and non-bank credit and financial organizations

Banking operations are:

attracting monetary means of natural persons in accounts and/or deposits;

placement of attracted monetary means specified in indent two of this part in the own name and at the own costs on the conditions of repayment, interest payment, and maturity;

opening and operating accounts of natural and/or legal persons;

opening and operating bullion accounts;

settlement and/or cash services to natural and legal persons, including correspondent banks;

currency exchange transactions;

sale of precious metals and/or precious stones in the cases stipulated by the National Bank;

acceptance and allocation of precious metals and/or precious stones in deposits for natural and/or legal bodies;

issuing bank guarantees;

trust management of a fund of bank management on the basis of a contract of trust management of bank management fund;

trust management of monetary means under a contract of trust management of monetary means;

collection of cash monetary means, precious metals and precious stones and other valuables;

issuance (emission) of bank payment cards;

issuance (emission) of electronic money;

issuance of securities confirming acceptance of monetary means in deposits and placement thereof in the accounts;

financing against monetary claim assignment (factoring);

providing natural and legal persons with special premises or strongboxes located therein for bank safekeeping of documents and valuables (monetary means, securities, precious metals and precious stones, etc.);

carriage of cash monetary means, precious metals and precious stones and other valuables between banks and non-bank credit and financial organizations, their separate and structural divisions, and delivery of such valuables to customers of banks and non-bank credit and financial organizations.

Rules of and procedures for banking operations are established by the National Bank.

Specific regulations for carrying out banking operations involving precious metals and precious stones are stipulated by special legislation.

In addition to banking operations referred to in part one of this Article, banks and non-bank credit and financial organizations are entitled, in accordance with legislation of the Republic of Belarus, to perform:

provision of suretyship for third persons which stipulates the fulfillment of obligations in a monetary form;

trust management of precious metals and/or precious stones;

operations (transactions) with precious metals and/or precious stones;

leasing;

counselling and information services;

issue (issuance) of securities and/or operations with securities;

offset of mutual monetary and other financial claims and obligations and determination of net positions (clearing);

operations in the Republic of Belarus and outside its limits with commemorative banknotes, commemorative and bullion (investment) coins which are legal means of payment of the Republic of Belarus, at a price not lower than the nominal;

activity of the specialized depository of allocated assets;

 activity of the managing organization of the investment fund, of the specialized depository of the investment fund;

other activities provided by the legislation of the Republic of Belarus, carried out for own needs and/or necessary to ensure the carrying out of banking operations, with the exception of carrying out the insurance business as insurers.

Article 15. Types of banking operations

Banking operations may be active, passive, and intermediary.

Active banking operations are deemed to be operations aimed at providing monetary means, precious metals and/or precious stones by banks and non-bank credit and financial organizations.

Passive banking operations are deemed to be operations aimed at attracting monetary means, precious metals and/or precious stones by banks and non-bank credit and financial organizations.

Intermediary banking operations are deemed to be operations facilitating banking activities of banks and non-bank credit and financial organizations.

Article 16. Specific features of computation of time limits in banking activity

A time-limit in banking activity is determined by a calendar date or by the expiration of a time period which is calculated in years, months, weeks, and calendar, working or banking days, hours. The time-limit may also be determined by the indication to an event that will inevitably occur.

A time-limit in one banking day means a part of the working day set by the bank for performing certain actions.

The time-limit calculated in banking days does not include days which, in accordance with legislation of the Republic of Belarus or standard banking practice, are not working days. If the last day of the time-limit is a non-working day, the next working day shall be deemed the day of the expiration of the time-limit.

If an action is to be performed within a time-limit calculated in banking days, such action must be performed before the expiration of the last banking day of the time-limit.

If payment instructions are delivered to the bank after the expiration of the time set by the bank for the execution of the said payment instructions, such payment instructions are deemed to be delivered on the next banking day.

Article 17. Specific feature for establishment of limitation periods when carrying out banking activity

The limitation period for the claims of banks and non-bank credit and financial organizations to borrowers due to non-fulfillment (undue fulfillment) of terms and conditions of credit contracts is five years.

The limitation period does not cover depositors’ claims to a bank or a non-bank credit and financial organization for the repayment of deposits.

Article 18. State regulation of banking activities

The state regulation of banking activity is carried out by the National Bank through:

state registration of banks and non-bank credit and financial organizations;

licensing of banking activities;

establishing bans and restrictions for banks and non-bank credit and financial organizations;

control over compliance of banks and non-bank credit and financial organizations with banking legislation;

bank supervision;

application of measures of supervisory reaction established by this Code;

adoption (issue) of normative legal acts;

exercising of other functions in accordance with the legislative acts of the Republic of Belarus.

CHAPTER 3
INTERRELATIONSHIPS BETWEEN SUBJECTS AND PARTICIPANTS OF BANK LEGAL RELATIONSHIPS

Article 19. Relationships between banks, non-bank credit and financial organizations and the state

Banks and non-bank credit and financial organizations are not liable for obligations of the state. The state is not liable for obligations of banks and non-bank credit and financial organizations, except for the cases where the state has assumed such obligations or unless otherwise stipulated by legislation of the Republic of Belarus.

Banks and non-bank credit and financial organizations are independent in their activities. The state, its bodies, and officials may interfere in the activities of banks and non-bank credit and financial organizations only within the limits established by the Constitution of the Republic of Belarus and legislative acts of the Republic of Belarus adopted in compliance with the Constitution.

On banks and non-bank credit and financial organizations may be imposed control over the performance of cash operations by customers, as well as in accordance with legislative acts of the Republic of Belarus control for perfoming currency operations by customers.

It is not allowed to impose on banks and non-bank credit and financial organizations, unless otherwise stipulated by the President of the Republic of Belarus, functions of control over:

performance of licensed activities by customers;

timeliness and adequacy of payments by customers of taxes, dues (duties) and other payments into the budget, state non-budgetary funds, and also of insurance fees;

observance by customers of time-limits for payment of wages/salaries and rates thereof; and

observance by customers and other persons of terms and conditions of contracts concluded between them.

The National Bank and other state bodies are not entitled to require banks and non-bank credit and financial organizations to exercise control and other functions inappropriate for them.

Banks may perform operations with budgetary means and perform settlements therewith, and ensure the intended use of budgetary means and means of state non-budgetary funds allocated for state programs.

Article 20. Interrelationships between banks and/or non-bank credit and financial organizations

Banks and/or non-bank credit and financial organizations may accept from each other and allocate with each other means in the form of deposits and credits, effect settlements via correspondent accounts opened with each other, and perform other operations specified in licenses to carry out banking activities.

Article 21. Participation of banks and non-bank credit and financial organizations in associations

Banks and non-bank credit and financial organizations may establish unions and associations that are non-profit organizations.

Establishment and state registration of unions and associations of banks and non-bank credit and financial organizations are carried out in the order established by legislation of the Republic of Belarus.

Article 22. Relationships of banks and non-bank credit and financial organizations with customers

Relations of banks and non-bank credit and financial organizations with customers are based on banking legislation and contracts concluded.

Banks and non-bank credit and financial organizations determine independently the terms and conditions of transactions that do not contradict legislation of the Republic of Belarus. Unless otherwise stipulated by rules effective in banks and non-bank credit and financial organizations, contracts concluded between a bank or non-bank credit and financial organization and a customer are public contracts or contracts of adhesion.

The National Bank is entitled to prescribe for banks and non-bank credit and financial organizations obligatory terms and conditions for conclusion of transactions with customers.

The National Bank, banks and non-bank financial institutions freeze means, block banking operations, suspend banking operations and/or refuse to carry out them, refuse to connect a client to remote banking systems, unilaterally terminate or suspend the provision of services through such systems, refuse unilaterally to execute contracts for banking operations in writing, refuse to conclude a contract to carry out banking operations in writing in cases provided for by the legislative acts of the Republic of Belarus on preventing the legalization of incomes obtained by criminal means and the financing of terrorist activities and financing the proliferation of weapons of mass destruction.

When carrying out banking activities, a bank and a non-bank credit and financial organization are obliged, at a customers request, to present to the customer, for the insight, the license to carry out banking activities and information on its financial standing and results of performance of respectively that bank and that non-bank credit and financial organization in the volume and in the order established by the National Bank.

Article 23. Right of banks and non-bank credit and financial organizations to judicial protection of their violated or challenged rights and legitimate interests

Banks and non-bank credit and financial organizations have the right to judicial protection of their violated or challenged rights and legitimate interests, including the right to appeal in court actions (omissions) of the National Bank and other state bodies.

SECTION II
THE NATIONAL BANK

CHAPTER 4
LEGAL STATUS, OBJECTIVES AND FUNCTIONS OF THE NATIONAL BANK

Article 24. The National Bank is the central bank and the state body of the Republic of Belarus

The National Bank is the central bank and a state body of the Republic of Belarus and operates exclusively in the interests of the Republic of Belarus.

The National Bank carries out its activities in accordance with the Constitution of the Republic of Belarus, this Code, laws of the Republic of Belarus, normative legal acts of the President of the Republic of Belarus and is independent in its activities.

The National Bank is accountable to the President of the Republic of Belarus.

The National Bank's accountability to the President of the Republic of Belarus means that:

the President of the Republic of Belarus approves the Statute of the National Bank as well as changes and/or additions thereto;

the President of the Republic of Belarus appoints, with the consent of the Council of the Republic of the National Assembly of the Republic of Belarus, the Chairman and members of the Board of the National Bank and removes them, with the notification of the Council of the Republic of the National Assembly of the Republic of Belarus, from office;

the President of the Republic of Belarus designates an audit organization for auditing the annual accounting (financial) statements of the National Bank;

the President of the Republic of Belarus approves the annual report of the National Bank.

The National Bank is a legal person and has the seal with the image of the State Emblem of the Republic of Belarus and the inscription «Национальный банк Республики Беларусь» [National Bank of the Republic of Belarus]. The National Bank location is the City of Minsk.

The objectives and principles of activity of the National Bank as well as its rights, are determined by the Constitution of the Republic of Belarus, this Code, other legislative acts of the Republic of Belarus.

Article 25. Main objectives of activities of the National Bank

The main objectives of Activities of the National Bank are:

maintaining price stability;

ensuring stability of the banking system of the Republic of Belarus;

ensuring efficient, reliable, and secure functioning of the payment system.

Profit making is not the main objective of the National Bank.

Article 26. Functions of the National Bank

The National Bank exercises the following functions:

develops Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus and, in concert with the Government of the Republic of Belarus, ensure the implementation of the single monetary and credit policy of the Republic of Belarus in the order established by this Code and by other legislative acts of the Republic of Belarus;

performs operations necessary to attain the main objectives of the National Bank;

is the lender of last resort for banks, providing refinancing thereto;

emits money;

carries out issue (issuance) of securities of the National Bank, determines the procedure for issue, circulation and redemption of the securities of the National Bank in coordination with the republican body of state administration exercising the state regulation of the securities market;

forms the gold reserve and the fund of precious stones of the State Fund of precious metals and precious stones of the Republic of Belarus to and carry out operative administration thereof within the limits of its competence;

creates, upon consent of the President of the Republic of Belarus, gold and foreign currency reserves, and manages them within its competence;

carries out currency regulation and control in accordance with the legislation of the Republic of Belarus;

regulates credit relations;

regulates and organizes monetary circulation;

establishes official exchange rates of the Belarusian ruble in relation to foreign currencies;

exercises the functions of a finance agent of the Government of the Republic of Belarus and local executive and administrative bodies on the issues of execution of the republican and local budgets;

establishes rules and procedures for carrying out banking operations;

gives, in the order established by it, consent to carrying out by banks and non-bank credit and financial organizations of security operations in the cases stipulated by legislations of the Republic of Belarus;

agrees, in the order established by it, the issue of securities of banks and non-bank credit and financial organizations in the cases stipulated by legislation of the Republic of Belarus;

organizes activities of banks and non-bank credit and financial organizations, the Open Joint-Stock Company Bank of Development of the Republic of Belarus”  on the issuance and circulation of bills of exchange (promissory notes), unless otherwise provided by the President of the Republic of Belarus;

carries out depositary activity in the order provided by the legislation of the Republic of Belarus;

regulates relations in the field of financial instruments of forward transactions, with the exception of financial instruments that are traded on commodity exchanges, and derivative securities;

regulates relations arising from the pooling of monetary means and/or securities into the bank-management fund on the basis of contracts of trust management of the bank-management fund, as well as during the functioning of this fund, including determines the material conditions, the procedure for conclusion of the said contracts, rights, duties and liability of the parties;

determines the order of performance of settlements in the Republic of Belarus in cash and cashless forms, including the amount, settlements in cash monetary means in Belarusian rubles between legal persons, their separate divisions, individual entrepreneurs;

organizes collection and carriage of cash monetary means, precious metals and precious stones and other valuables

carries out settlement and/or cash servicing of the Government of the Republic of Belarus, of organizations the list of which is determined in the Statute of the National Bank, and other organizations in the cases stipulated by legislative acts of the Republic of Belarus;

establishes the order of opening bullion accounts and the conditions for their operating in banks and non-bank credit and financial organizations in the territory of the Republic of Belarus, as well as the terms for opening of such accounts by residents in banks and other credit organizations outside its territory. For the purposes of this Code, the term resident’ has the meaning determined by the sud-clause 1.11 of cluse 1 of Article 1 of the Law of the Republic of Belarus of July 22, 2003 No 226-Z On currency regulation and currency control;

determines the procedure for making money transfers through the systems of these transfers, requests from banks - participants of the money transfer systems rules for the operation of these systems, contracts for participation therein, other information about the activities of money transfer systems, collects, systematizes, analyzes information on money transfers sent and paid, conditions and methods of their implementation, other necessary information in accordance with treaties of the Republic of Belarus;

regulates activities of banks and non-bank credit and financial organizations;

carries out bank supervision;

carries out supervision of the activities of the open joint-stock company "Development Bank of the Republic of Belarus";

establishes in accordance with this Code and other legislative acts of the Republic of Belarus the order of the state registration of banks and non-bank credit financial organizations and performs their state registration;

carries out licensing of banking activities;

carries out the monitoring of financial stability;

organizes the functioning of the payment system of the Republic of Belarus and carries out supervision thereof, organizes the functioning of the automated system of interbank settlements, and also establishes the methods and procedures for ensuring the fulfillment of obligations arising from interbank settlements on transactions using bank payment cards issued by banks;

carries out formation and development of the single settlement and information area, determines the order of functioning of the single settlement and information area, including establishing rights and duties of its participants;

ensures the development of the interbank identification system (hereinafter – identification system), adopts normative legal acts governing the functioning of the identification system, rights and obligations of the participants of the identification system and the procedure for their connection to the identification system, the order of interaction between the participants of the identification system for presenting information in the identification system, receiving information from the identification system and using such information, takes other measures aimed at ensuring the functioning of the identification system;

ensures the conducting of a single state policy in the area of accounting and reporting for the National Bank, banks and non-bank credit and financial organizations, the open joint-stock company "Development Bank of the Republic of Belarus", consolidated accounting (financial) statements for bank groups, bank holdings;

carries out general methodological guidance of accounting in organizations, accounting (financial) reporting in the National Bank, banks and non-bank credit and financial organizations, the open joint-stock company "Development Bank of the Republic of Belarus", consolidated accounting (financial) statements in bank groups, bank holdings, other powers in the field of accounting and accounting (financial) reporting in accordance with the legislative acts of the Republic of Belarus;

develops and approves national standards of accounting, accounting (financial) reporting and other normative legal acts on accounting, including those determining the accounting rules for performed operations and formation of individual and consolidated statements, binding for the National Bank, banks and non-bank credit and financial organizations, the open joint-stock company "Development Bank of the Republic of Belarus", bank groups, bank holdings (with the exception of individual accounting (financial) statements of head organizations of bank holding not being bands, non-bank credit and financial organizations);

establishes procedure for banks and non-bank credit and financial organizations, the open joint-stock company "Development Bank of the Republic of Belarus" for drawing up and forms of statements on their activity;

conducts banking, monetary and credit statistics of the financial market, balance of payments, international investment position, gross external debt of the Republic of Belarus and places the official statistical information on the official site of the National Bank in the global computer network Internet;

performs the analysis of the payment balance, participates in the development of the payment balance forecast by the bodies of state administration;

carries out the analysis and the forecasting of the tendencies in the monetary and credit sphere and publishes the relevant analytical materials on the official site of the National bank in the global computer network Internet;

carries out the conducting of regular polls in order to find the tendencies of economic processes, their analysis and forecast in collaboration with the tools of the monetary and credit policy;

implements the state policy in the sphere of protection activity of banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus";

establishes for banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus" obligatory requirements on the safe functioning of the objects and safety of rendering of bank services, protection of information resources and information, dissemination and/or provision of which is limited, unless otherwise provided by the legislative acts of the Republic of Belarus;

establishes the requirements for the technical abilities of banks, non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus", their affiliates, structural divisions and remote workplaces for performance of bank operations, organizes technical regulation and standardization in the field of banking activities, determines the order of conducting by open joint stock company "Belarusian interbank settlements center" of the registry of software and soft- and hardware and technical means of participants of the payment system;

exercises control over data security and protection of information resources in banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus", gives consent to the candidatures of heads of security and economic security services, other divisions with similar functions (if available) of banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus" and determines the order of such consenting;

establishes the requirements for the reproduction of images of banknotes and coins ;

forms credit histories on the basis of data on credit transactions presented by the sources of formation of credit histories and provides credit reports to the users of credit histories and subjects of credit histories;

concludes agreements with central (national) banks and credit organizations of foreign states;

carries out in accordance with the legislative acts of the Republic of Belarus the regulation of leasing activity and control over compliance with legislation of the Republic of Belarus on leasing activity;

organizes work to improve the financial literacy of the population;

regulates the relations that arise when microfinance organizations extend and attract microloans;

carries out control over compliance by microfinance organizations with the legislation of the Republic of Belarus regulating the order of providing and attracting microloans, including by conducting inspections at the location of the National Bank on the basis of studying documents, statements and other information received by it in accordance with the legislation of the Republic of Belarus, without requesting from the microfinance organization of other documents (chamber inspection);

considers on merits, in accordance with the legislation of the Republic of Belarus on appeals of citizens and legal persons, appeals from consumers of services rendered by microfinance organizations in connection with the violation of the rights of such consumers and sends prescriptions to cease the violation of consumer rights that are binding for microfinance organizations;

considers on merits, in accordance with the legislation of the Republic of Belarus on appeals of citizens and legal persons, appeals from consumers of services rendered by leasing organizations in connection with the violation of the rights of such consumers and sends prescriptions to cease the violation of consumer rights that are binding for leasing organizations;

considers on merits, in accordance with the legislation of the Republic of Belarus on appeals of citizens and legal persons, appeals from consumers of services rendered by  banks, non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus" when they carry out bank operations in connection with the violation of rights of such consumers and takes measures on protection of the said rights in the order established by it;

determines the order of sale by banks of banknotes, of commemorative and bullion (investment) coins, being legal means of payment of the Republic of Belarus, as well as cases therefor;

determines the procedure for verification of the authenticity of banknotes by banks at the request of a natural person;

determines the order of functioning of the system of centralized interbank correspondence exchange;

determines the order of formation by banks of the fund of required reserves placed in the National Bank;

exercises control over activity of banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus", the open joint stock company "Belarusian Currency and Fund Exchange" in the part of carrying out by the said company in accordance with the legislative acts of the Republic of Belarus of certain banking operation, of leasing, microfinance organizations, including pawnshops in the part of carrying out by them of activity on attracting and providing microloans, forex companies, the National Forex-Center in the part of their compliance with the legislation of the Republic of Belarus on preventing the legalization of incomes obtained by criminal means and the financing of terrorist activities and financing the proliferation of weapons of mass destruction;

determines the order for the National Bank,  banks and non-bank credit and financial organizations, the open joint stock company "Development Bank of the Republic of Belarus" for using blank forms of securities and documents with a certain degree of protection, as well as documents with a certain degree of protection;

organizes information interaction on the exchange of information relating to bank guarantees issued by banks, as well as between subjects of banking legal relationships and state bodies ,including through the automated information system for submitting banking information (hereinafter – banking information presentation system), for searching, receiving, transmitting, collecting , processing, storing, stockpiling, distributing and/or providing information, using information and protecting information relating to accounts, payments, banking operations, data about customers, monetary means held in banks and other property of customers, including submission of data constituting bank secrecy in accordance with this Code and other legislative acts of the Republic of Belarus;

organizes scientific research on the issues of activities of the National Bank and the banking sector of the Republic of Belarus;

exercises other functions stipulated by this Code and other legislative acts of the Republic of Belarus.

Article 27. Fundamental monetary and credit policy guidelines of the Republic of Belarus

The National Bank, in concert with the Government of the Republic of Belarus, shall, annually before October 1 of the current year, submit the Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus for the forthcoming year to the President of the Republic of Belarus.

The Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus for the forthcoming year include:

brief characteristics of the economic situation of the Republic of Belarus;

most important parameters of the social and economic development forecast of the Republic of Belarus for the forthcoming year, including forecast for the indices of the balance of payments of the Republic of Belarus for the forthcoming year;

principal parameters and instruments of monetary and credit policy of the Republic of Belarus for the forthcoming year;

estimates and analysis of the fulfillment of main parameters and instruments of monetary and credit policy of the Republic of Belarus for the current year;

arrangements of the National Bank for the forthcoming year on the improvement of the banking system of the Republic of Belarus, banking control, financial markets and payment system of the Republic of Belarus.

The National Bank informs, on a quarterly basis, the President of the Republic of Belarus and the Government of the Republic of Belarus about the volume of money emission and about the fulfillment of the Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus.

The National Bank informs, on a quarterly basis, the President of the Republic of Belarus about the volume of gold and currency reserves to be created in accordance with objectives and tasks determined in the Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus.

Article 28. Rights of the National Bank to issue money

The National Bank has the exclusive right to issue money.

The emission of money is carried out by the National Bank in the form of release in the circulation of cashless and cash money. Cash money is released in the circulation in the form of banknotes and coins.

The emission of money is carried out by the National Bank through short-term (up to one year) refinancing of banks in order to maintain liquidity of the banking system of the Republic of Belarus and stability of monetary circulation, by purchasing Government securities circulating in the money market of state securities, and by performing operations in the domestic and foreign money markets aimed to increase the gold and foreign currency reserves. The emission of money for long-term (over one year) refinancing of banks is prohibited.

The National Bank issues banknotes and coins in the form of releasing them in circulation by selling to the banks, by purchasing foreign currency and other currency valuables from legal and natural persons in order to ensure stable cash money circulation, as well as in other cases relating to the attainment of the main objectives of the National Bank.

The overall volume of the emission of cashless money, banknotes and coins are determined and regulated exclusively by the National Bank in accordance with objectives and tasks determined in the Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus.

The National Bank emits the Belarusian ruble. The restrictions of the circulation of the Belarusian rouble in the territory of the Republic of Belarus is not allowed. The issuance in the circulation of other monetary units in the territory of the Republic of Belarus is prohibited

Article 29. Rights of the National Bank to organize the circulation of banknotes and coins in the territory of the Republic of Belarus

The National Bank determines the face value (denomination), design, levels of protection and other characteristics of banknotes and coins emitted in the circulation, publish cash money description in the official national printed mass media.

The National Bank ensures printing of banknotes, stamping of coins, safekeeping of non-emitted banknotes and coins, as well as storing and, if necessary, confirmation of authenticity of banknotes and coins, destruction of original and printing plates, plaster models and master coining instruments, dies and banknotes and coins retired from the circulation.

Banknotes and coins issued in circulation by the National Bank are the only legal means of payment in the territory of the Republic of Belarus, except for the cases stipulated by legislation of the Republic of Belarus.

Banknotes and coins issued in circulation by the National Bank constitute an unconditional liability of the National Bank and are secured by all its assets, and must be accepted at face value in all kinds of payments, and for placement on accounts and on deposit, and for transfers in the whole territory of the Republic of Belarus.

The National Bank has the exclusive right to retire issued banknotes and coins from circulation.

Banknotes and coins put in circulation by the National Bank may not be declared invalid (not being legal means of payment), unless a reasonably prolonged period for their exchange for new banknotes and coins has been established. The period for retiring banknotes and coins from circulation may not be less than one year and more than ten years. In addition to that, it is not allowed in introduce any restrictions on amounts or subjects of exchange.

Decision on exchange of banknotes and coins that have been put in circulation by the National Bank for banknotes and coins of a new specimen is to be taken by the President of the Republic of Belarus.

The National Bank must notify preliminary the Government of the Republic of Belarus about putting in circulation of new banknotes and coins, except for commemorative banknotes and coins.

The National Bank carries out exchange of specimens of banknotes and coins (including commemorative banknotes and coins) with central (national) banks of foreign states.

The National Bank shall exchange worn-out banknotes and damaged banknotes and coins without restrictions in compliance with regulations established by the National Bank.

The National Bank forms and manages reserve fund of banknotes and coins.

The National Bank has the right to emit, as collectibles, commemorative banknotes and coins as well as bullion (investment) coins made of precious and non-precious metals.

Commemorative banknotes as well as commemorative and bullion (investment) coins may circulate both as legal means of payment and collectibles at value other than the face value.

The National Bank is entitled to carry out exportation from the Republic of Belarus of commemorative and bullion (investment) coins without permit, and the exportation thereof for the sale in the international market, without export license.

Article 30. Rights of the National Bank in the sphere of monetary circulation

The National Bank determines, in accordance with legislation of the Republic of Belarus in the sphere of monetary circulation:

procedure for performing cash operations, procedure for bank operations with cash money, forms of reporting about bank operations with cash money and time-limits for the presentation thereof;

procedure, including the amount, of cash settlements in Belarusian rubles between legal persons, their separate divisions, individual entrepreneurs;

rules for storing, collection, carriage of cash money, precious metals and precious stones and other valuables;

rules for performing emission and treasury operations;

rules for determining the features of fitness of cash money for use in payments, rules for exchange of worn-out banknotes and damaged banknotes and coins, as well as the procedure for the destruction thereof.

Article 31. Rights of the National Bank in the sphere of credit relations

In sphere of credit relations, the National Bank establishes:

a system for bank refinancing;

rate of refinancing and other interest rates for the operations of the National Bank;

volume of bank refinancing;

normative standards for obligatory reserves to be deposited with the National Bank (reserve requirements.

The National Bank regulates the total volume of credit to be extended by the National Bank in accordance with Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus.

Bank refinancing means provision of banks by the National Bank with monetary means in Belarusian rubles on the conditions of repayment and interest payment.

The refinancing rate is a rate of the National Bank being the basic instrument of regulation of the level of interest rates in the monetary market and serving as a base for establishment of the interest rates on operations of providing the liquidity to banks.

Forms, procedure and conditions of refinancing are determined by the National Bank.

To regulate the money market and credit resources market, the National Bank establishes the amounts of interest rates for its own operations and in exceptional cases – permissible (maximum and/or minimum) amounts of interest rates on bank operations with monetary means of natural and/or legal persons.

Article 32. Rights of the National Bank concerning management of functioning of the payment system of the Republic of Belarus and its supervision

The National Bank carries out the management of functioning of the payment system of the Republic of Belarus and the supervision of the payment system through establishing the rules for making payments, tariff policy, liquidity management, as well as through collection, accumulation and analysis of indices characterizing the condition of the payment system of the Republic of Belarus.

The National Bank determines the rules for effecting settlements in cashless and cash forms in the Republic of Belarus, develops and approves, in the order established by it, standards for conducting settlements in the form of binding technical normative legal acts.

The National Bank maintains the central archive of interbank settlements of the National Bank in accordance with the order established by it. The National Bank is entitled to use such an archive for statistical processing, confirmation of operations carried out during interbank settlements, and actions performed during the exchange of interbank correspondence in the form of electronic documents, storage of interbank electronic documents of banks, presentation of information to state bodies in the cases provided for by the legislative acts of the Republic of Belarus

Article 33. Rights of the National Banks in the sphere of foreign currency regulation and currency control

The rights of National Bank in the field of currency regulation and currency control are determined by the Law of the Rebublic of BelarusOn currency regulation and currency control”.

Article 34. Rights of the National Bank in the sphere of bank supervision

The main objectives of the National Bank in the sphere of bank supervision are the maintenance of the stability of the bank system of the Republic of Belarus and the protection of interests of depositors and other creditors.

The National bank carries out the bank supervision by means of evaluation of the level of exposures of a bank, non-bank credit and financial organization, banking group and bank holding, their financial state and perspectives of functioning, quality of management, observance of license and prudential demands, established by this Code and the National Bank, evaluation of the compliance with the requirements of the legislation of the Republic of Belarus of founders, shareholders and other beneficiary owners of a bank, non-bank credit and financial organization, and their managing organs and members of the managing organs, organizational structure, sources of formation of the authorized fund, normative capital, and by means of adoption of measures aimed at the maintenance of safe functioning of a bank, non-bank credit and financial organization and/or stability of the bank system and/or protection of interests of depositors and other creditors of a bank, non-bank credit and financial organization.

For the purposes of this Code, the beneficiary owner of a bank, non-bank credit and financial organization means a state, organization or natural person, which directly or indirectly (through other natural persons and/or other organizations) own shares of the bank, non-bank credit and financial organization. The basis for the recognition of the existence of indirect (through other natural persons and/or other organizations) ownership of shares of a bank, non-bank credit and financial organization, order of the calculation of a portion of shares being in such ownership, as well as the criteria for the recognition of the state, organization or natural persons as a beneficiary owner are established by the National Bank.

The National Bank in the sphere of bank supervision establishes:

standards of safe operation and other requirements in accordance with this Code for banks, non-bank credit and financial organizations, banking groups and bank holdings and carries out the supervision of their observance;

requirements to the organization of corporate governance, risk management and internal control in banks, non-bank credit and financial organizations, bank groups and bank holdings;

requirements toward the founders, shareholders and other beneficiary owners of the bank, non-bank credit and financial organization, which own or will own shares of the bank, non-bank credit and financial organization in the amount equal or exceeding five percent (except for state bodies, legal persons and natural persons, acting on behalf of the Republic of Belarus or its administrative-territorial units);

qualification requirements and/or requirements to the business reputation, demanded from the independent directors and/or other members of the board of directors (supervisory board), with the exception of representatives of the state in governing bodies of the bank, members of collegiate executive body of the bank, non-bank credit and financial organization, heads and chief accountants of banks, non-bank credit and financial organizations, and their deputies, determines cases and order of the performance of the evaluation of compliance with the qualification requirements and/or requirements to the business reputation of these persons, as well as performs such evaluation;

requirements to the business plan of the created bank, non-bank credit and financial organization, strategic plan of development of the existing bank, non-bank credit and financial organization and evaluates compliance of the mentioned business plans and strategic plans of development with the established requirements in the order determined by the National Bank, as well as carries out the monitoring of their performance;

volume and content of report and other information necessary for the purposes of the bank supervision about the activities of the bank, non-bank credit and financial organization, order of its drawing up and submission to the National Bank;

volume and the procedure of disclosure of the information on the activity of bank, non-bank credit and financial organization, banking group and bank holding;

volume and content of the information received during the supervision, exchange of which with supervisory bodies of other states is carried out during the implementation of treaties of the Republic of Belarus.

The National bank, while carrying out the bank supervision, is entitled to:

request and receive the information from state bodies and other organizations, necessary to carry out bank supervision;

require the banks, non-bank credit and financial organizations, legal persons not being banks or non-bank credit and financial organizations and recognized in accordance with this Code making part of a bank holding, to submit reports and other information in accordance with this Code and normative legal acts of the National Bank;

perform, in accordance with the legislative acts of the Republic of Belarus, inspections of banks, non-bank credit and financial organizations, legal persons not being banks or non-bank credit and financial organizations and recognized in accordance with this Code making part of a bank holding;

engage with observance of the requirements of legislative acts of the Republic of Belarus an auditing organization, auditor carrying out activity as individual entrepreneur (hereinafter – auditor-individual entrepreneur) and workers of the organization that carries out the guaranteed compensation of bank deposits of natural persons, for performing an inspection;

act as the ordering consumer of audit services in respect of the bank, non-bank credit and financial organization, legal persons not being banks or non-bank credit and financial organizations and recognized in accordance with this Code making part of a bank holding;

apply motivated estimation in the cases and under the procedure established by this Code and the National Bank. The motivated estimation is deemed to be a formalized, logically reasoned professional opinion of workers of the National Bank which may be a ground for a decision in the sphere of bank supervision performance to be taken by the Board of the National Bank and officials of the National Bank authorized to take respective decisions;

take measures of supervisory reaction, including measures of influence provided for by this Code to the bank, non-bank credit and financial organization, leading organization of a bank group and/or bank holding, legal person not being banks or non-bank credit and financial organizations and recognized in accordance with this Code making part of a bank holding, persons that can influence directly and/or indirectly (through third parties) substantially the decisions taken by governing bodies of the bank and/or another legal person recognized making part of the bank group and/or bank holding;

exercises other powers established by this Code and other legislative acts of the Republic of Belarus.

Information received in the course of bank supervision performance is not to be disclosed, with the exception of the cases provided for by the legislative acts of the Republic of Belarus and treaties of the Republic of Belarus.

Article 35. Specific features of carrying out the supervision of bank activities on a consolidated basis

For carrying out the supervision of bank activities on a consolidated basis and complex evaluation of risks, the National Bank carries out supervision of activities of bank groups and bank holdings.

A bank group is recognized:

a complex of banks and/or non-bank credit and financial organizations where one of the legal persons exerts directly or indirectly (through third persons) a substantial influence on decisions taken by the governing bodies of another legal person;

a complex of banks and/or non-bank credit and financial organizations the decisions of which, taken by their governing bodies, could be substantially influenced by the same natural or legal person that is not recognized to be the head organization of this bank group, directly or indirectly (through third persons), in the form of control.

A bank holding is recognized:

a complex of banks and/or non-bank credit and financial organizations and other legal persons not being banks or non-bank credit and financial organizations where one of the legal persons exerts directly or indirectly (through third persons) a substantial influence on decisions taken by the bodies of management of another legal person;

a complex of banks and/or non-bank credit and financial organizations, and other legal persons not being banks or non-bank credit and financial organizations the decisions of which, taken by their governing bodies, could be substantially influenced by the same natural or legal person that is not recognized to be the head organization of this bank group, directly or indirectly (through third persons), in the form of control.

The head organization of a bank group is recognized a bank or non-bank credit and financial organization capable of exerting directly or indirectly (through third persons) a substantial influence on decisions taken by the governing bodies of another bank and/or non-bank credit and financial organization making part of the bank group.

The head organization of a bank holding is recognized a bank or non-bank credit and financial organization, or another legal person non being bank or non-bank credit and financial organization capable of exerting directly or indirectly (through third persons) a substantial influence on decisions taken by the governing bodies of another bank and/or non-bank credit and financial organization or another legal person making part of the bank holding.

The participant of a bank group is recognized to be a bank or non-bank credit and financial organization the decisions of which, taken by their governing bodies, could be substantially influenced by the head organization of this bank group, directly or indirectly (through third persons).

The participant of a bank holding is recognized to be a bank or non-bank credit and financial organization, and another legal person not being bank or non-bank credit and financial organization the decisions of which, taken by their governing bodies, could be substantially influenced by the head organization of this holding, directly or indirectly (through third persons).

The head organization of a bank group and/or bank holding, as well as participants of a bank group and/or bank holding are recognized as such in accordance with the methodology approved by the National Bank.

A bank and a non-bank credit and financial organization may be recognized to be a part of simultaneously one or several bank groups and/or one or several bank holdings. A legal person not being a bank or non-bank credit and financial organization may be recognized to be a part of simultaneously one or several bank groups and/or one or several bank holdings.

The influence is considered substantial if it enables to determine decisions (reject undesirable decisions) taken by governing bodies of a legal person, including to determine condition for its carrying out entrepreneurial activities, by virtue of at least one of the following grounds:

disposal of such a number of votes in any of the governing bodies of the legal person, which enables to determine decisions (reject undesirable decisions) taken by that body except for the decisions to be taken unanimously;

disposal of such a number of votes in an authorized governing body of the legal person, which enables to elect the one-man executive governing body of the legal person and/or more than half of members of the collegial executive body and/or of the board of directors (supervisory board);

disposal of powers to designate the one-man executive body of the legal person;

exercise of powers of the executive body of the legal person on the basis of a contract;

conclusion of a trust management contract concerning all property of the legal person or another contract according to which the rights on management of the activities of such legal person are acquired.

The substantial influence in the form of control is understood as substantial influence which permits due to the presence of at least one of the grounds provided for by part ten of this Article to determine the decisions taken by governing organs of a legal person.

Substantial influence in the form of control may be exercised by two or more individual entrepreneurs and/or commercial organizations on the basis of a contract on joint activity concluded between them (joint control).

Substantial influence exerted indirectly means substantial influence exerted on decisions taken by governing bodies of a legal person through third persons by virtue of at least one of the grounds provided for by part ten of this Article, as well as substantial influence exerted on the decisions taken by the governing bodies of a legal person by a natural person through another natural person, other natural persons due to the fact that mentioned natural persons have close ties of kinship or affinity.

The National Bank shall be informed in the established order:

by the head organization of a bank group and/or bank holding about its ability to exert directly or indirectly (through third persons) substantial influence on decisions taken by bodies of management of another legal person (other legal persons);

by a bank or non-bank credit and financial organization about the ability of another person to exert directly or indirectly (through third persons) substantial influence on decisions taken by their governing bodies;

by the head organization of a bank holding, not being a bank or non-bank credit and financial organization, about persons capable exert substantial influence directly on the decisions taken by its governing bodies;

by the head of a bank holding, not being a bank or non-bank credit and financial organization, about persons that transferred (received) the right to participate in the management of such head organization on the ground of a power of attorney and/or contract;

by a bank, non-bank credit and financial organization about persons that transferred (received) the right to participate in the management of a legal person not being a bank or non-bank credit and financial organization and capable to exert substantial influence directly or indirectly on the decisions taken by governing bodies of the bank, non-bank credit and financial organization, on the grounds of a power of attorney and/or contract.

For the purposes of carrying out the bank supervision on a consolidated basis, the National Bank:

approves the methodology of evaluation of a possibility to exert substantial influence by a bank, non-bank credit and financial organization, another legal person not being bank or non-bank credit and financial organization, directly or indirectly (though third persons) on the decisions taken by the governing bodies of another legal person, including in the form of control and their recognition as the head organization of a bank group and/or bank holding;

keeps records of head organizations and participants of bank groups, bank holdings, as well as other persons, exerting substantial influence on banks and/or non-bank credit and financial organizations;

establishes the volume and order of drawing up and submitting to the National Bank of a consolidated reports and other information important for carrying out the bank supervision about the activities of a bank groups and/or bank holding;

establishes order of submission by the participants of bank groups and/or bank holdings to head organizations of such groups and/or holdings of the information about its activities, necessary to draw up consolidated reports on the activities of a bank group and/or bank holding;

is entitled to consider, on the basis of the methodology developed by it, a bank, non-bank credit and financial organization, another legal person not being bank or non-bank credit and financial organization, as the leading organization of a bank group and/or bank holding and to require, in accordance with part two of Article 119 of this Code, its submitting to the National Bank of consolidated reports about the activities of the bank group and/or bank holding;

is entitled to require from the head organization of a bank group and/or bank holding to include into the consolidated reports on activities of a bank group and/or bank holding the information about the activities of a legal person whose decisions taken by its governing bodies such head organization can influence substantially directly or indirectly (through third persons), as well as to recognize such a legal person to be a part of such a bank group and/or bank holding.

The head organization of a bank group and/or bank holding is non entitled to disclose the received information about the activities of participants of a bank group and/or bank holding, with the exception of the cases provided by this Code and other legislative acts of the Republic of Belarus.

Article 351. Monitoring of financial stability

The monitoring of financial stability is carried out by the National Bank in cooperation with the Government of the Republic of Belarus.

The objects of monitoring of financial stability are banks and non-bank credit and financial organizations, other financial intermediary, financial markets, payment system.

The monitoring of financial stability is understood to be observance of the objects of monitoring when they carry out their inherent activities and of their capability to carry out such an activity in case of destabilizing influence of interim and outer factors, as well as complex analysis of factors influencing the preservation of financial stability.

The results of the monitoring of financial stability shall be published by the National Bank in the established order on the official site of the National Bank in the global computer network Internet.

Article 36. Right of the National Bank to judicial recourse

The National Bank is entitled to bring lawsuits in the economic court of the region (city of Minsk) for establishing the fact of voidance of transactions of banks and non-bank credit and financial organizations, concluded in violation of legislation of the Republic of Belarus, for recognition of voidable transactions of banks and non-bank credit and financial organizations as invalid in cases provided for by this Code and other legislative acts of the Republic of Belarus, as well as on the application of the consequences of the invalidity of such transactions.

The National Bank is entitled to bring lawsuits in the court considering economic cases to seek the liquidation of banks or non-bank credit and financial organizations on grounds provided by legislative acts of the Republic of Belarus.

CHAPTER 5
SPECIFIC FEATURES OF FUNCTIONING OF THE NATIONAL BANK

Article 37. Interaction of the National Bank with the Government of the Republic of Belarus and other state bodies

The National Bank, in concert with the Government of the Republic of Belarus, ensures the application of a single monetary and credit policy of the Republic of Belarus.

The National Bank and the Government of the Republic of Belarus inform each other about the supposed actions which are of national importance, coordinate their activities, hold regular mutual consultations.

The Government of the Republic of Belarus, the National Statistical Committee of the Republic of Belarus, the Ministry of Finance of the Republic of Belarus, the Ministry of Economy of the Republic of Belarus, the Ministry on Taxes and Dues of the Republic of Belarus, Ministry of Internal Affairs of the Republic of Belarus, Ministry of Justice of the Republic of Belarus, the State Customs Committee of the Republic of Belarus, the Committee of State Control of the Republic of Belarus, and the National Bank shall furnish one another, in a mutually agreed manner and scope, on a gratuitous basis and in accordance with the legislation of the Republic of Belarus, with official statistical, analytical and another information, including that obtained while carrying out control and supervision functions.

The National Bank gives advice to the Ministry of Finance on matters of issue (issuance) of state securities and of redemption of national debt of the Republic of Belarus, having regard to their influence on the position of the bank system of the Republic of Belarus and priorities of the monetary and credit policy of the Republic of Belarus.

The National Bank is not liable for obligations of the Government of the Republic of Belarus. The Government of the Republic of Belarus is not liable for obligations of the National Bank, except for the cases stipulated by legislative acts of the Republic of Belarus.

The Chairman of the Board of the National Bank or one of his deputies on his behalf may take part in the meetings of the Presidium of the Council of Ministers of the Republic of Belarus in a consultative capacity.

Article 38. Submission of information to the National Bank

Banks, non-bank credit and financial organizations, and legal persons not being banks or non-bank credit and financial organizations and recognized in accordance with this Code to be a part of a bank holding, in the order established by the National Bank, as well as state bodies and other organizations, in the manner agreed with the National Bank and in the cases provided for by the legislative acts of the Republic of Belarus - in the manner established by the National Bank, submit to the National Bank financial and economic information, as well as reference and analysis materials necessary for the National Bank to perform its functions.

The National Bank has the right to request and obtain on a gratuitous basis from the state bodies not mentioned in part three of Article 37 of this Code and from other organizations, in the manner agreed with them, and in the cases provided by the legislative acts of the Republic of Belarus, in the order established by the National Bank, information necessary for conducting  the banking, monetary and credit statistics, statistics of the financial market, payment balance, international investment position and gross external debt of the Republic of Belarus, financial stability.

In order to ensure information interaction between the subjects of banking legal relations between themselves and with state bodies, the National Bank ensures the creation and operation of a banking information presentation system, adopts normative legal acts governing the order of its functioning, rights and obligations of participants of the banking information presentation system and the procedure for their connection to the banking information presentation system , the order of interaction of participants in the banking information presentation system on providing the information therein, to obtain information from it and use that information.

The information received from state bodies and other organizations may not be disseminated without their consent.

The National Bank establishes for legal persons not being banks or non-bank credit or financial organizations and recognized in accordance with this Code to be a part of a bank holding, the procedure for submission of the information about their activities, necessary to draw up consolidated reports.

The National Bank maintains an integrated fund of supervisory and control information about banks and non-bank credit and financial organizations in the manner established by the National Bank.

The National Bank publishes analytical information, official statistical information on the banking, monetary and credit statistics, statistics of the financial market, payment balance,  international investment position, gross external debt of the Republic of Belarus, financial stability, including in accordance with the special standards of distribution of the data, exchanges the said official statistical information with executive bodies of integration formation, central (national) banks of foreign states, provides it to international financial organizations.

Article 39. Normative legal acts of the National Bank

The National Bank, within its powers, adopts normative legal acts binding upon the republican bodies of state administration, local government and self-government authorities, all banks and non-bank credit and financial organizations, and other legal persons operating in the territory of the Republic of Belarus, as well as natural persons.

The National Bank is entitled to adopt (issue) normative legal acts jointly with the Government of the Republic of Belarus or the republican bodies of state administration.

Normative legal acts of the National Bank must comply with the legislative acts of the Republic of Belarus. In the case of a contradiction of a normative legal act of the National Bank with a legislative act of the Republic of Belarus, the latter shall be applied.

Article 40. Property of the National Bank

Property of the National Bank is in the ownership of the by the Republic of Belarus and is assigned to the National Bank on a right of operative administration.

The National Bank exercises its rights to possess, use, and dispose of the property of the National bank, including gold and foreign currency reserves, in accordance with the objectives of the National Bank and in the manner stipulated by its Statute. The seizure and encumbrance of the said property are not allowed except for the cases stipulated by legislative acts of the Republic of Belarus.

Article 41. Authorized Fund of the National Bank

The amount of the authorized fund of the National Bank is determined by its Statute.

Article 42. Reserve fund and other funds of the National Bank

The National Bank sets up a reserve fund and other funds intended to support its activity.

Setting up and use of the reserve fund and other funds are to be carried out in the manner stipulated by the Statute of the National Bank.

Article 43. Special reserves of the National Bank

The National bank creates, to cover potential losses on its operations, special reserves of general banking risks with allocation of the amounts of created reserves attributed to the expenses of the National Bank.

The formation and usage of special reserves of general banking risks is carried out in the order established by the National bank.

Article 44. Profit (loss) of the National Bank

The profit (loss) of the National Bank is derived as a result of its carrying out activity in accordance with this Code and other acts of legislation of the Republic of Belarus.

The National Bank annually sends the profit determined on the basis of its annual accounting (financial) statements the audit of which has been carried out in accordance with legislation of the Republic of Belarus for loss repayment, increase (creation) of the authorized, reserve and other funds.

Article 45. [Excluded]

Article 46. Reporting of the National Bank

The annual reporting period for the National Bank is from January 1 to December 31.

The National Bank shall, annually not later than April 15 of the year following the reporting year, submit the annual report to the President of the Republic of Belarus.

The annual report of the National Bank includes:

report on activities of the National Bank, and fulfillment of the Fundamental Monetary and Credit Policy Guidelines of the Republic of Belarus;

annual accounting (financial) reports (balance sheet, profit and loss report, profit received and its distribution, changes in proprietary capital, formation and use of funds, expenses on maintenance of the National Bank, on fulfillment of the estimates of capital investments, reporting notes) the audit of which has been performed in accordance with the legislation of the Republic of Belarus.

Once approved by the President of the Republic of Belarus, the annual report of the National Bank shall be published on the official site of the National Bank in the global computer network Internet.

The National Bank annually prepares annual consolidated financial statements in accordance with International Financial Reporting Standards and, after its approval by the Board of the National Bank, places it together with an audit report on the official site of the National Bank in the global computer network Internet.

Article 47. Audit of the Reporting of the National Bank

The audit of the annual accounting (financial) statements of the National Bank and the annual consolidated financial statements of the National Bank in accordance with international financial reporting standards is conducted in the order established by the legislation of the Republic of Belarus.

The audit organization for auditing the annual accounting (financial) statements of the National Bank and annual consolidated financial statements of the National Bank in accordance with international financial reporting standards is determined by the President of the Republic of Belarus for a period of not more than five years from several organizations at the suggestion of the National Bank.

Article 48. Restriction on participation of the National Bank in economic companies and other legal persons

Unless otherwise stipulated by the President of the Republic of Belarus, the National Bank may not participate in economic companies and other legal persons, with the exception of certain banks, non-bank credit and financial organizations, organizations carrying out the reimbursement of deposits of natural person, of organizations supporting functioning of the National Bank, including those engaged in the securities market, effecting inter-bank settlements, financing and/or developing and introducing banking technologies, as well as international organizations engaged in developing cooperation in monetary, foreign currency and banking spheres.

The order of the participation of the National Bank in organizations referred to in part one of this Article is determined by the President of the Republic of Belarus.

Article 49. Delimitation of responsibilities of the National Bank, banks and non-bank credit and financial organizations

The National Bank is not liable for obligations of banks and non-bank credit and financial organizations, except for the cases when the National Bank assumes such obligations.

Banks and non-bank credit and financial organizations are not liable for obligations of the National Bank, except for the cases when banks and non-bank credit and financial organizations assume such obligations.

Article 50. Participation of the National Bank in international organizations

In accordance with legislation of the Republic of Belarus, the National Bank may participate in activities of international banking foundations, unions, and associations.

The National Bank represents the Republic of Belarus in international organizations on monetary and credit policy issues of the Republic of Belarus, foreign currency regulation, and other matters within its powers.

Article 51. Interrelationships between the National Bank and credit organizations of foreign states

Interrelationships between the National Bank and credit organizations of foreign states are established in accordance with treaties of the Republic of Belarus, legislation of the Republic of Belarus, and inter-bank agreements.

For the purposes of carrying out its functions, the National Bank may open representative offices in foreign states.

CHAPTER 6
OPERATIONS OF THE NATIONAL BANK

Article 52. Operations performed by the National Bank

Operations performed by the National Bank include:

extending credits to banks by way of refinancing;

settlement and cash servicing of the Government of the Republic of Belarus, organizations that appear on the list included in the Statute of the National Bank, and other organizations in the cases stipulated by legislative acts of the Republic of Belarus;

rediscounting of bills of exchange and promissory notes;

securities market operations;

carriage of cash monetary means, precious metals and precious stones and other valuables;

management, within its competence, of gold and foreign currency reserves, as well as operations with precious metals, with commemorative banknotes, commemorative and bullion (investment) coins which are legal means of payment of foreign states, and precious stones in any kind and state, including the sale, purchase and exchange thereof in the territory the Republic of Belarus and abroad;

opening and operating bullion accounts both within and outside the territory of the Republic of Belarus;

transfer of precious metals in the form of small bars on a gratuitous basis in the cases stipulated by legislations of the Republic of Belarus;

accepting monetary means of banks and non-bank credit and financial organizations, as well as the organization that carries out the guaranteed compensation of banking deposits of natural persons, in deposits, accepting of monetary means of other organizations in the cases provided for by the legislative acts of the Republic of Belarus in accounts and/or deposits;

operations in the Republic of Belarus and outside its limits with commemorative banknotes, commemorative and bullion (investment) coins which are legal means of payment of the Republic of Belarus, at a price not lower than the nominal;

extending, at the decision of the President of the Republic of Belarus, of bank guarantees sureties for investment projects;

inter-bank settlements, including settlements with non-bank credit and financial organizations, other organizations in the cases provided for by the legislative acts of the Republic of Belarus;

accepting valuables for safekeeping;

remittance of money and other settlement operations;

sale of foreign currency and other currency operations provided for by legislations of the Republic of Belarus, including documentary operations and operations on extending credits in foreign currency;

foreign currency exchange operations with natural persons, and also with organizations the list of which is determined in the Statute of the National Bank, and other organizations in the cases provided for by the legislative acts of the Republic of Belarus;

provision of banking services to governments of foreign states, central (national) banks and financial bodies of those states, and to international organizations;

intermediary services in the capacity of a financial agent of the Government of the Republic of Belarus for the distribution of Government securities;

operations on servicing the state debt of the Republic of Belarus;

The National Bank have no right to provide services on carrying out bank operations to legal persons not having license to carry out banking activities and to natural persons, except for the cases stipulated by this Article.

Unless otherwise stipulated by this Code or other legislative acts of the Republic of Belarus, the National Bank shall perform bank operations for a fee.

Article 53. Credit activity of the National Bank

In the sphere of credit activity, the National Bank carries out refinancing of banks against collateral determined by the Board of the National Bank.

The National Bank is not entitled to provide credits, except for those provided by part one of this Article, including credits for financing the deficit of the budget.

Article 54. Operations of the National Bank with foreign currency, precious metals and precious stones

The National Bank is entitled to purchase, sell foreign currency, exchange, allocate, accept, and store foreign currency and to perform other foreign currency operations stipulated by legislation of the Republic of Belarus.

To replenish or regulate the size of gold and foreign currency reserves, the National Bank may perform the following operations with precious metals and precious stones:

opening and operating bullion accounts both within and outside the territory of the Republic of Belarus;

purchase, sale, exchange, trust management, placement on deposit, accepting for deposit, and storage of precious metals in the form of bullions, nuggets, coins, and other forms and conditions, and precious stones, as well as pledge thereof.

The operations with precious metals and precious stones mentioned in part two of this Article are performed by the National Bank without a special permit (license) to carry out activities concerning precious metals and precious stones.

When the National Bank buys foreign currency from a bank for Belarusian rubles with a commitment to sale by this bank of foreign currency for Belarusian rubles after a certain period of time, the National Bank, in case of violation by the bank of the time limit of fulfillment of obligations, has the right to satisfy its claims in the order established by the legislation of the Republic of Belarus.

Article 55. Operations of the National Bank with securities

When carrying out monetary and credit regulation, the National Bank issues (emits) securities, determine technical requirements for their manufacture, and to perform operations with securities.

The National Bank provides intermediary services as a financial agent of the Government of the Republic of Belarus in the state securities market and participates in their circulation.

Article 56. Storage and carriage by the National Bank of cash monetary means, precious metals and precious stones, and other valuables

The National Bank is entitled to carry out storage, and carriage of cash monetary means, precious metals, precious stones and other valuables of the National Bank, banks, non-bank credit and financial organizations, and natural and legal persons in the manner prescribed by the National Bank.

Article 57. Servicing the national debt of the Republic of Belarus

In accordance with legislation of the Republic of Belarus, the National Bank exercises functions of a financial agent of the Government of the Republic of Belarus for servicing the national debt of the Republic of Belarus.

CHAPTER 7
STRUCTURE, GOVERNING BODY AND ORGANIZATIONS OF THE NATIONAL BANK

Article 58. Structure of the National Bank

The National Bank consists of a central apparatus and structural divisions located within and outside of the territory of the Republic of Belarus.

Structural divisions of the National Bank operate based on regulations to be approved in the order established by the Statute of the National Bank.

Article 59. [Excluded]

Article 60. Board of the National Bank

The supreme governing body of the National Bank is the Board of the National Bank, a collective body that establishes main guidelines of activities of the National Bank, carries out its administration and governance.

The number of members of the Board of the National Bank is determined by the President of the Republic of Belarus.

The competence of the Board of the National Bank and procedures for convening its meetings are determined by the Statute of the National Bank. The Board of the National Bank organizes its work in compliance with the rules of procedure.

The Chairman and members of the Board of the National Bank are public servants - workers of the National Bank and may not hold state offices in other state bodies, unless otherwise stipulated by the Constitution and other legislative acts of the Republic of Belarus, as well as be affiliated with a political party.

Restrictions referred to in part three of Article 68 of this Code cover the members of the Board of the National Bank.

Article 61. Formation of the Board of the National Bank

The Chairman and other members of the Board of the National Bank are appointed by the President of the Republic of Belarus with the consent of the Council of the Republic of the National Assembly of the Republic of Belarus for a term of five years in the order established by the legislative acts of the Republic of Belarus.

The same person may be appointed as a Chairman and a member of the Board of the National Bank not more than for two consecutive terms.

The representative of the Government of the Republic of Belarus may take part in the meetings of the Board of the National Bank in a consultative capacity.

Article 62. Dismissal from office of the chairman and/or member(s) of the Board of the National Bank

The President of the Republic of Belarus is entitled to dismiss the Chairman of the Board of the National Bank from office, with notification of the Council of the Republic of the National Assembly of the Republic of Belarus in the case of:

non-compliance, while in office, with the Constitution of the Republic of Belarus, laws the Republic of Belarus, decrees, edicts, and administrative orders of the President of the Republic of Belarus and other acts of legislation of the Republic of Belarus binding for the National Bank;

non-observance of restrictions established in part three of Article 68 of this Code;

in other cases provided for by legislation of the Republic of Belarus on securities.

The President of the Republic of Belarus is entitled to release members (a member) of the Board of the National Bank from office with the notification to the Council of the Republic of the National Assembly of the Republic of Belarus upon proposal of the Chairman of the Board of the National Bank, in the cases provided by part one of this Article.

Article 63. Adoption of decisions by the Board of the National Bank

The meeting of the Board of the National Bank is deemed to be legally qualified provided that at least 70 percent of the members of the Board are present. The meeting of the Board of the National Bank shall not be held without the Chairman of the Board of the National Bank or a person that substitutes him.

Decisions of the Board of the National Bank are taken by a simple majority of votes of the members of the Board of the National Bank attending its meeting. In case of a parity of votes, that decision is considered to be taken for which voted the Chairman of the Board of the National Bank.

Decisions of the Board of the National Bank are adopted in the form of resolutions. Decisions on certain issues not providing for normative prescriptions may be formalized in the form of  the minutes of meetings of the Board of the National Bank.

Article 64. Chairman of the Board of the National Bank

Chairman of the Board of the National Bank governs the activities of the National Bank and represents the National Bank as a state body and the central bank of the Republic of Belarus.

The powers of the Chairman of the Board of the National Bank are determined by the Statute of the National Bank.

Article 65. [Excluded]

Article 66. [Excluded]

Article 67. [Excluded]

Article 68. Employees of the National Bank

The National Bank employees are divided into employees being public servants and employees that perform technical servicing and support of activities of the National Bank that are not public servants.

The legal status of the National Bank employees being public servants is determined by legislation of the Republic of Belarus on public service.

Alongside the restrictions provided for by the legislation of the Republic of Belarus on public service, the National Bank employees being public servants may not purchase personally or through intermediaries the shares of banks or non-bank credit and financial organizations.

The National Bank employees may obtain credits from other banks.

The terms of recruitment, dismissal, remuneration of labour, and rights and duties of National Bank employees are determined by the Board of the National Bank in accordance with legislation of the Republic of Belarus.

Certain categories of National Bank employees according to the list to be approved by the Board of the National Bank in accordance with legislation of the Republic of Belarus have the right to wear uniform and to carry and keep arms used while performing their duties.

Article 69. Organizations of the National Bank

The National Bank has the right to establish, upon obtaining the consent of the President of the Republic of Belarus, organizations necessary for maintenance of its activities.

The organizations of the National Bank operate based on statutes to be approved in the order established by the Statute of the National Bank.

SECTION III
BANKS AND NON-BANK CREDIT AND FINANCIAL ORGANIZATIONS

CHAPTER 8
GENERAL PROVISIONS RELATING TO BANKS

Article 70. Bank Status

A bank is a commercial organization registered in the order established by this Code and having, on the basis of a license to carry out bank activities, an exclusive right to perform, in the aggregate, banking operations stipulated by part one of Article 8 of this Code.

A bank is entitled to perform other banking operations specified in the license to carry out bank activities.

Article 71. Creation of the Bank

The bank is created in the form of a joint-stock company in the order established by this Code and other legislation of the Republic of Belarus and must have at least two founders.

Article 72. Creation by a bank (participation in the creation) of commercial organizations

For carrying out its statute objectives and with consent of the National Bank, a bank is entitled to be founder (participant) of commercial organizations in the order and on the conditions determined by this Code of other legislation of the Republic of Belarus.

Article 73. Statute of bank

A bank shall have the statute approved in the order established by the legislation of the Republic of Belarus.

The statute of a bank shall include:

the name of the bank, having regard to the requirements stipulated by this Code;

indication to its organizational and legal form;

date on the banks location (location of a permanent executive body of the bank);

list of banking operations in accordance with this Code;

information on the amount of the authorized fund;

information on the governing bodies, bodies of internal audit, procedures of their formation and powers thereof;

other data provided by the legislation of the Republic of Belarus.

Article 74. Bank Name

A bank must have a name which shall comply with the requirements of legislation of the Republic of Belarus. The name of the bank must indicate the nature of this banks activity, through the use of the word "bank", as well as its organizational and legal form.

Legal persons registered in the territory of the Republic of Belarus in the established manner may not include in their name the word "bank", except for legal persons that have obtained a license to carry out banking operations from the National Bank, unless otherwise provided by the legislative acts of the Republic of Belarus.

Article 75. Authorized fund of the bank

The authorized fund of a bank is to be formed from the contributions of its founders.

The minimum size of the authorized fund of a bank being created is established by the National Bank upon obtaining the consent of the President of Belarus.

When establishing a bank, the minimum size of its authorized fund must be formed of monetary means.

For the formation of the authorized fund of a bank, only own means of its founders may be used, and for the increase of the authorized fund of a bank – own means of shareholders of the bank, other persons and/or sources of its own means.

Own means of a founder (shareholder) of a bank, other persons mean any legally acquired monetary means or other property belonging to them on the right of ownership, right of economic management or by virtue of another right in property. The sources of own means of a bank are understood to be undivided profits of past years and funds created at the expense of profit, in case if mentioned sources were not used. As non-monetary contribution only the property necessary to carry out bank activity and attributed to fixed asset, with the exception of objects of unfinished construction, may be used.

Budgetary means and means from state non-budgetary funds as well as state property objects may be used for the formation of the authorized fund of a bank only in the cases and in the order stipulated by legislative acts of the Republic of Belarus.

Attracted monetary means and/or criminal incomes may not be used for the formation and the increase of the size of the authorized fund of a bank.

Monetary means and other property, submitted by the bank itself, as well as monetary means and other property submitted by other persons may not be used to increase the authorized fund of the bank, in the case if the bank accepted the risks arising in relation to provision to the bank of such monetary means and other property.

The property the alienation of which is restricted by the owner, by the legislation of the Republic of Belarus or by a contract may not be contributed to the authorized fund of a bank.

Monetary contributions to the authorized fund of a bank may be made both in Belarusian rubles and in foreign currency, except for the cases provided for by the legislation of the Republic of Belarus. However, the entire authorized fund must be stated and accounted in Belarusian rubles. The recalculation of the foreign currency into the official monetary unit of the Republic of Belarus is carried out according to the official exchange rate of the Belarusian ruble to the relevant foreign currency, established by the National Bank on the date of introduction of the monetary contribution into the authorized fund. The order of determining the date of making monetary contributions into the authorized fund of the bank is established by the National Bank.

Disposal of monetary means and other property, contributed to the authorized capital is allowed only after the state registration of the bank (state registration of changes and/or additions being introduced in the statute of a bank, connected with the increase of the amount of the authorized fund).

Article 76. Procedures for formation of authorized fund of a bank

Monetary means, with the exception of the cases provided by part two of this Article, contributed to the authorized fund of a bank are to be remitted to a temporary account opened by the bank founders or by the bank, in the case of an increase of its authorized fund, in the National Bank or, upon obtaining the consent of the National Bank, to temporary accounts opened in other banks. In case of opening of a temporary account in another bank, the monetary means shall be transferred to such account via the corresponding account loro’ of this bank opened in the National Bank.

Opening of a temporary account is not necessary in the following cases:

adoption of a legislative act of the Republic of Belarus that provides for contributing monetary means into the authorized fund;

increase of the authorized fund of the bank at the expense of the sources of own means of the bank;

increase of the authorized bank fund at the expense of credits (loans) recognized as subordinated in accordance with the legislation of the Republic of Belarus, previously allocated in this bank.

CHAPTER 9
STATE REGISTRATION OF BANKS

Article 77. General provisions on the state registration of banks

In accordance with this Code and other legislative acts of the Republic of Belarus, the following are subject to state registration:

banks being created, including in the result of a reorganization;

changes and/or additions introduced into the statutes of banks.

The state registration of banks, as well as of changes and/or additions introduced into statutes of banks, is carried out by the National Bank.

Peculiarities of state registration of banks, created in the result of reorganization, and state registration of changes and/or additions introduced into the statute documents of a bank in relation to its reorganization are established by the National Bank.

Article 78. [Excluded]

Article 79. Procedure for submission of documents necessary for state registration of a bank

Prior to submitting documents necessary for the state registration of a bank being created, founders of the bank are obliged to:

obtain the consent of with the National Bank for the name of the bank, in the order established by the National Bank;

determine the supposed location of the bank (location of its permanently acting executive body);

adopt the decision on creation of the bank and approve its statute;

approve the candidates for the positions of the head and chief accountant of the bank;

form the authorized fund of the bank in full.

Acceptance of documents necessary for the state registration of a bank is carried out in the National Bank in the presence of its founders (natural persons, representatives of legal persons). The founders of a bank are entitled to authorize one of the founders to represent their interests before the National Bank. In doing so, the founder – natural persons shall produce the identity documents, and a natural person authorized by the founders of the bank and representatives of legal persons shall produce, in addition to their identity documents, documents confirming their powers.

Article 80. Documents necessary for state registration

For the state registration of a bank being created, the following documents are to be presented to the National Bank:

application for the state registration of the bank being created according to the form established by the National Bank;

statute of the bank in two copies and its electronic version;

contract on creation of the bank;

protocol of the constituent meeting which besides the data provided by the legislation of the Republic of Belarus shall contain the data about the candidates to the positions of the head and the chief accountant of the bank;

documents confirming the formation of the banks authorized fund in full (statement of temporary account, expert opinion concerning the credibility of the property value appraisal in the case of a contribution to the authorized fund in kind and/or other documents in accordance with legislation of the Republic of Belarus);

copies of constituent documents and certificates of state registration of the founders – legal persons (legalized extract from the commercial register of the country of its foundation or another equivalent proof of the legal status of the organization in accordance with the legislation of the country of its establishment (the extract shall be dated not earlier than one year before the date of submission of the application for the state registration of the bank) with translation into Belarusian or Russian (the authenticity of the signature of the interpreter must be certified by a notary) – for founders, being foreign organizations, and also auditors’ reports containing data about the fact that the founders – legal persons have own means for the contribution to the authorized fund of the bank, from the founders;

document certifying the banks right to be situated at its location (location of its permanent executive body) specified in the statute of the bank;

copies of the identity documents of founders – natural persons (for founders being foreign natural persons, – legalized not later than one year from the date of submission of the application for the state registration of the bank with translation into Belarusian or Russian (the authenticity of the signature of an interpreter shall be certified by a notary));

list of founders with indication of the amount of their contribution, number, categories and nominal cost of shares subject to distribution among the founders, as well as of stakes of such shares in the authorized fund of the bank according to the form determined by the National Bank;

data on supposed beneficiary proprietors of the bank, each of which shall posses at least five percent of bank shares, according to the form determined by the National Bank;

transfer act or dividing balance sheet, containing provisions on the succession on obligations of the reorganized legal person (for a bank created in the result of an reorganization);

payment document confirming the payment of the state duty for the state registration of the bank.

The founders being foreign organizations additionally submit a written permit of the authorized body of the country of their establishment for the participation in the creation of he bank in the territory of the Republic of Belarus, in the case if such permit is required according to the legislation of the country of their establishment.

The National Bank, not later than one working day following the day of receipt of the documents, specified in part one of this Article, issues to the bank founders (their representatives), provided such documents, a written confirmation of their receipt.

Article 81. Adoption of the decision on state registration of a bank

The decision on state registration of a bank or on denial of its registration shall be taken by the Board of the National Bank within the period not exceeding two months from the date of submission of the documents required for the state registration of the bank, with the exception of for the case provided by part eight of Article 95 of this Code.

Prior to making the decision on state registration of a bank, the National Bank verifies the statute of the bank for compliance with the requirements of the legislation of the Republic of Belarus, as well as for the compliance of monetary means and other property, being contributed to the authorized fund of the bank with the requirements provided by Article 75 of this Code.

The National Bank, prior to taking the decision on state registration of a bank, is entitled to request from state bodies and other organizations additional data about the founders of the bank being registered, on the sources of their monetary means and other property being contributed to the authorized fund of the bank, necessary for considering the issue of compliance with the legislation of the Republic of Belarus while the bank is being established.

In the event of taking the decision on the state registration of a bank, the National Bank shall, within the period o five days, submit to the Ministry of Justice of the Republic of Belarus all the necessary data about this bank to include it into the United State Register of Legal Persons and Individual Entrepreneurs.

On the basis of the decision on the state registration of a bank, the National Bank shall, within five working days from the day of entering the record on the state registration of the bank into the United State Register of Legal Persons and Individual Entrepreneurs, hand out:

certificate on state registration of the bank;

documents confirming the putting on record in tax bodies, bodies of state statistics, bodies of the Fund of Social Protection of Population of the Ministry of Labor and Social Protection of the Republic of Belarus, registration in the organization carrying out obligatory insurance against accidents in the workplace and occupational diseases;

one copy of the bank's statute with a stamp evidencing the performance of the state registration.

The information on the location of a bank (location of its permanently acting executive body) and its name shall be published on the official site of the National Bank in the global computer network Internet.

Article 82. Reasons for denial of state registration of a bank

The state registration of a bank is not allowed if:

not all required documents were submitted for the state registration of the bank;

documents submitted for the state registration of the bank contain false data;

statute of the bank and/or other documents submitted for its state registration do not comply with the legislation of the Republic of Belarus;

for the moment of state registration performance, the authorized fund of the bank has not been formed in full;

facts of the use of monetary means or other property, not being own means of the founders of the bank, and/or profits received from criminal activities when the authorized fund of the bank was formed have been established;

bank being created in the result of reorganization does not comply with license requirements established by this Code;

at least one of the bank founders or one of its supposed beneficiary owners who will posses at least five percent of bank shares:

has non-cleared or non-expunged record of conviction for crimes against property and the order of carrying out economic activity.

is a public association pursuing political objectives;

does not comply with requirements, established by the National Bank.

In the event of taking the decision about the denial of state registration of the bank, the National Bank shall notify the bank founders in writing within five-day period with indication of reasons for the denial.

The decision about the denial of state registration of the bank or the failure of the National Bank to take decisions about its state registration within the established time-limit may be appealed against in the order established by the legislation of the Republic of Belarus.

Article 83. Actions of a bank after its state registration

A bank, with the exception of the case provided by part eight of Article 95 of this Code, within ten months from the day of its state registration, is obliged to:

take measures on fulfilling the license requirements, based on the list of bank operations, which bank intends to perform;

approach the National Bank for obtaining the license to carry out banking activities in accordance with Articles 94 and 95 of this Code.

In the event of failure of the bank to obtain the license to carry out banking activities within twelve months from the day of its state registration, such a bank is subject to liquidation in the order provided by the legislation of the Republic of Belarus, on the decision of the general meeting of shareholders of the bank or of the court considering economic cases upon the claim of the National Bank.

Prior to obtaining the license the bank is not entitled to:

carry out banking operations and other activities, with the exception of the cases when such activities are carried out to fullfill the license requirements;

establish affiliates, representative offices, structural divisions and remote workplaces;

act as founder (participant) of other legal persons.

Prior to obtaining the license to carry out banking activities, requirements of Articles 109 and 110 – 119 of this Code are not applied to the bank, unless otherwise provided by the National Bank.

Article 84. State registration of changes and/or additions introduced into the statute of a bank

For the state registration of changes and additions introduced into the statue of a bank, the bank is obliged to submit to the National Bank within thirty day period from the day of relevant decision the following documents:

application for the state registration of changes and/or additions introduced into the statute of the bank according to the form established by the National Bank;

extract from the minutes of the general meeting of banks shareholders on introducing changes and additions into its statute;

changes and/or additions being introduced into the statute of the bank and their electronic copy;

two copies of the banks statute in the new wording and its electronic copy;

payment document confirming the payment of the state duty for state registration of changes and additions being introduced into the statute documents of the bank.

For the state registration of changes/or additions introduced into the statute of a bank concerning changes in its name, alongside with the documents specified in part one of this Article, the bank shall additionally submit the original certificate on its state registration. The new name of the bank shall be previously agreed with the National Bank.

For the state registration of changes introduced into the statute of the bank concerning the change of the amount of the authorized fund, the bank shall, alongside with the documents specified in part one of this Article, additionally submit to the National Bank:

list of shareholders of the bank with indication of the changed number and category of shares belonging to them and the percentage of such shares in the authorized fund of the bank, the amount of their additional contributions being made into the authorized fund of the bank according to the form determined by the National Bank;

copy of the document confirming the state registration of the shares in the republican body of state administration that carries out the state regulation of the securities market;

in the event of increasing the authorized fund of the bank – documents confirming its increase (statement of temporary account, expert opinion concerning the credibility of the property value appraisal in the case of a contribution to the authorized fund in kind and/or other documents in accordance with legislation of the Republic of Belarus).

For the state registration of changes and/or additions introduced into the statute of the bank relating to its reorganization, the bank shall, alongside the documents specified in part one of this Article, additionally submit to the National Bank a transfer act or a dividing balance sheet.

The National Bank shall, before taking a decision on state registration of changes and/or additions introduced into the statute of the bank, verify their compliance with the requirements of the legislations of the Republic of Belarus, and in case of making additional contributions into the authorized fund of a bank – also the compliance of monetary means and other property contributed to the authorized fund of the bank with the requirements provided by Article 75 of this Code.

The National Bank is entitled, before taking a decision on state registration of changes and/or additions to the statute of the bank, to request additional data from state bodies and other organizations on new shareholders of the bank, sources of monetary means and other property contributed to the authorized fund of the bank, necessary for considering the issue of compliance with the legislation of the Republic of Belarus while the changes and/or additions have been introduced into the statute of the bank.

Prior to making a decision on state registration of changes and/or additions introduced into the statute of the bank concerning the change of its location, the National Bank is entitled to verify the existence of technical abilities of the bank to carry out banking operations at the new location.

The decision on the state registration of changes and/or additions introduced into the statute of a bank or on denial in their registration are to be taken by the National Bank within a period not exceeding two months from the day of submission of documents necessary for their state registration.

On the basis of the decision of the state registration of changes and/or additions introduced into the statute of the bank, the National Bank submits, within five days, to the Ministry of Justice of the Republic of Belarus necessary data about the bank to be included in the Unified State Register of Legal Persons and Individual Entrepreneurs.

Information on the change of location of a bank (location of its permanently acting executive body) or of its name are to be published on the official site of the National Bank in the global computer network Internet.

The state registration of changes and/or additions introduced into the statute of a bank is not allowed if:

not all required documents were submitted for the state registration changes and/or additions introduced into the statute of the bank;

false data has been detected in documents submitted for the state registration of changes and/or additions introduced into the statute of the bank;

documents submitted for the state registration of changes and/or additions introduced into the statute of the bank do not comply with the legislation of the Republic of Belarus;

acts of the use of monetary means or other property, not being own means of the founders of the bank, and/or provided by the bank itself, and/or provided to the bank by other persons in the case if the bank accepted the risks arising in relation to provision to the bank of such monetary means and other property, and/or profits received from criminal activities;

In the event of taking the decision about the denial of state registration of changes and additions introduced into the statute of a bank, the National Bank shall notify the bank in writing within five-day period from the day of taking such decision with indication of reasons for the denial.

The decision about the denial of state registration of changes and additions introduced into the statute of a bank or the failure of the National Bank to take decisions about the state registration of changes and additions introduced into the statute of a bank within the established time-limit may be appealed against in the order established by the legislation of the Republic of Belarus.

CHAPTER 10
SEPARATE AND STRUCTURAL DIVISIONS OF A BANK

Article 85. Affiliate of the bank

An affiliate of a bank is its separate division located off the location of the bank, which carries out, on its behalf, all or a part of banking operations stipulated by a license to carry out banking activities. In the case of location of the premises of a bank affiliate at several addresses, the location of bank affiliate is determined on the location of its head.

An affiliate of the bank is not a legal person and carries out its activity on the basis of regulations approved by its founding bank. Regulations on an affiliate of a bank must comply with the provisions of the legislation of the Republic of Belarus and the statute of the bank.

The list of bank's affiliates is to be appended to the bank statute

The property of a bank's affiliate is formed by transferring a portion of the bank's property thereto.

The name of a bank's affiliate of a bank shall carry an indication that it is an affiliate of its founding bank.

The affiliate head is appointed by the head of the bank that has established the affiliate, unless otherwise stipulated by the bank's statute, and acts on the basis of a power of attorney issued in the established order.

The state registration of changes and/or additions introduced into the statute of a bank concerning the change in the attached list of bank affiliates shall be carried out in the order established by Article 84 of this Code.

The technical capabilities of a bank affiliate shall comply with the requirements established by the legislation of the Republic of Belarus to the technical capabilities for carrying out banking operations by the affiliate.

Article 86. [Excluded]

Article 87. Carrying out banking operations and other activities by a bank outside the location of the bank, bank affiliate

A bank is entitled to carry out banking operations and/or other activities outside the location of the bank, bank affiliate by means of establishment of structural divisions, including mobile ones, placed outside the location of the bank, bank affiliate and other structural divisions not having an independent balance sheet (branches, centers of banking services, settlement and cash centers, exchange offices and other structural division), or by means of establishment of remote workplaces. Technical capabilities of such structural divisions and remote workplaces must comply with the with the requirements established by the legislation of the Republic of Belarus to the technical capabilities for carrying out respective banking operations, normative requirements to ensure personal safety of employees and customers, and other requirements ensuring the safety of carrying out banking operations.

The bank must notify the National Bank on the establishment, change of a location and closing of such structural divisions and remote workplaces in the order and within the time-limits established by the National Bank.

Article 88. Banks representative office

The representative office of a bank is its separate division situated off the place of location of the bank that represents and protects its interests.

The list of bank representative offices is to be appended to the bank statute

A representative office of a bank is not a legal person and carries out its activities on the basis of regulations approved by its founding bank.

A representative office of a bank may not perform banking operations and other activities stipulated by Article 14 of this Code with the exception of protecting and representing the interests of its founding bank including through providing counseling and information services.

The name of a representative office of a bank shall carry an indication that it is a representative office of its founding bank.

Heads of representative offices are appointed by the head of the bank that has established those representative offices, unless otherwise stipulated by the bank statute, and act on the basis of a power of attorney issued to them in the established order.

The state registration of changes and/or additions introduced into the statute of a bank concerning the change in the attached list of representative offices of the bank shall be carried out in the order established by Article 84 of this Code.

CHAPTER 11
SPECIFIC FEATURES OF CREATION AND ACTIVITIE OF A BANK FOUNDERS (SHAREHOLDERS) OF WHICH ARE FOREIGN INVESTORS. REPRESENTATIVE OFFICE OF A FOREIGN BANK IN THE TERRITORY OF THE REPUBLIC OF BELARUS. SPECIFIC FEATURES OF ESTABLISHMENT OF SUBSIDIARY BANKS, OF OPENING AFFILIATES AND REPRESENTATIVE OFFICES OF RESIDENT BANKS OUTSIDE THE REPUBLIC OF BELARUS PARTICIPATION OF BANKS-RESIDENTS IN AUTHORIZED FUNDS OF FOREIGN BANKS

Article 89. [Excluded]

Article 90. Additional requirements made for creation and activities of banks in the Republic of Belarus, the founders (shareholders) of which are foreign investors

The amount (quota) of foreign capital participation in the banking system of the Republic of Belarus is established by the National Bank as agreed with the President of the Republic of Belarus. The said quota is calculated as a ratio of the total capital belonging to non-residents in the authorized funds of banks the founders (shareholders) of which are foreign investors to the aggregate authorized fund of banks registered in the Republic of Belarus.

The National Bank shall cease state registration of banks the founders (shareholders) of which are foreign investors once the established amount (quota) of foreign capital participation in the banking system of the Republic of Belarus is reached.

In case of the increase of the authorized fund of a bank at the expense of means of non-residents and/or alienation by the bank and/or a shareholder-resident of shares of the bank in favor of non-residents, the purchaser of banks shares being non-resident, or a resident intending to conclude a relevant transaction, is obliged to obtain in advance a permission of the National Bank.

An application for a permission is considered by the National Bank within thirty days in the established order.

Transactions involving alienation of shares of banks by residents in favour of non-residents that have been performed without permission of the National Bank are invalid.

The National Bank is entitled to prohibit increase of the authorized fund of a bank the founders (shareholders) of which are foreign investors at the expense of means of non-residents and/or alienation of shares in favour of non-residents if, as a result of such actions, the rate (quota) of foreign capital participation in the banking system of the Republic of Belarus will be exceeded.

The Government of the Republic of Belarus, on the proposal of the National Bank, is entitled to impose restrictions on banks the founders (shareholders) of which are foreign investors on carrying out banking operations if similar restrictions are applied with regard to activities of banks with investments of citizens of the Republic of Belarus and/or legal persons of the Republic of Belarus in respective foreign states.

Article 91. Foreign banks representative office

A foreign bank is entitled to establish in the territory of the Republic of Belarus representative offices in the order established by the National Bank.

A representative office of a foreign bank is not a legal person and carries out its activity on the basis of regulations approved by the bank that has established it.

A representative office of a foreign bank has no right to carry out banking operations and other activities stipulated by Article 14 of this Code, with the exception of protecting and representing the interests of the bank that has established it, including by providing counseling and/or information services.

Article 92. Specific features of establishment of subsidiary banks, of opening affiliates and representative offices of resident banks outside the Republic of Belarus Participation of banks-residents in authorized funds of foreign banks

Resident banks may establish subsidiary banks and open affiliates outside the Republic of Belarus, as well as to participate in authorized funds of foreign banks only with permission of the National Bank.

Representative office of resident banks outside the Republic of Belarus may be opened only after prior notification to the National Bank.

To obtain permission for establishing subsidiary banks, opening affiliates of a resident-bank outside the Republic of Belarus or for participation of a resident bank in the authorized fund of a foreign bank, the following shall be submitted to the National bank:

application;

resolution of the authorized body of the bank on establishing a subsidiary bank or opening an affiliate of the resident bank outside the Republic of Belarus or on the participation of the resident bank in the authorized fund of a foreign bank;

feasibility study of establishing a subsidiary bank, opening an affiliate of the resident bank outside the Republic of Belarus or for participation of the resident bank in the authorized fund of a foreign bank;

documents that determine the legal status of a subsidiary bank or affiliate of the resident bank outside the Republic of Belarus or documents confirming the legal status of the foreign bank for participation in which the permission in applied for.

Decisions on granting permission to establish a subsidiary bank or to open an affiliate of a resident bank outside the Republic of Belarus abroad as well as to participate in the authorized fund of a foreign bank or on denial of such permission must be made within thirty days from the date of submission of the documents specified in part three of this Article. The National Bank shall notify the bank of its decision in writing within five days from the date of the decision.

The grounds for denial of permission to establish a subsidiary bank, to open an affiliate of a resident bank outside the Republic of Belarus or for participation of a resident bank in the authorized fund of a foreign bank are:

the bank has been incurring losses on the first day of the month in which a bank applied to the National Bank for the issuance of the permission, or the availability of the accurate information about the loss of the bank on the day of decision-taking;

existence of facts of non-fulfillment by the bank of standards of safe functioning and/or other requirements established by Chapter 15 of this Code within last three months prior to the day of applying to the National bank for the issuance of the permission;

existence of obstacles for carrying out by the National Bank of bank supervision on a consolidated basis;

other grounds provided for by the treaties of the Republic of Belarus.

Denial of granting permission to establish a subsidiary bank, to open an affiliate of a resident bank outside the Republic of Belarus or for participation of a resident bank in the authorized fund of a foreign bank or failure by the National Bank to take a decision within the period of time stipulated by this Article may be appealed to the Supreme Court of the Republic of Belarus.

CHAPTER 12
LICENSING OF BANKING ACTIVITIES

Article 93. General provision on licensing of banking activities

Licenses for carrying out banking operations are issued by the National Bank in the order stipulated in this Code and normative legal acts of the National Bank adopted in accordance with the Code.

A bank acquires the right to carry out banking activities from the date of obtaining a license to carry out banking activities.

Licenses issued by the National Bank are recorded in the register of licenses to carry out banking activity. In the event of revocation, suspension, or revalidation of a license carry out banking activity, including concerning performance of some banking operations, a proper entry is to be made in the said register.

The register of licenses to carry out banking activity shall be placed on the official site of the National Bank in the global computer network Internet. Changes and additions introduced in the said register shall be placed on the mentioned site with five-day period from the day of their entering into the register.

A license to carry out banking activity shall specify banking operations which the bank is entitled to perform.

Article 94. Licensing requirements for obtaining a license to carry out banking activities

The licensing requirements for obtaining a license to carry out banking activities are:

the bank dispose of a normative capital of not less than a minimum amount established by the National Bank;

the bank has a business plan (strategic plan of bank development) complying with the requirements established by the National Bank;

the bank has the Board of Directors (Supervisory Board) and executive organ, compliance of the composition of the Board of Directors (Supervisory Board) with the requirements established by the National Bank;

members of the Board of Directors (Supervisory Board), with the exception of a representative of a state, and members of a collegiate executive body (in case of its establishment), as well as the head and the chief accountant of the bank, their deputies meet the qualification requirements and/or requirements to the business reputation, established for them;

the bank has a system of risk management and internal control system, complying with the requirements established by the National Bank;

the bank meets the requirements for technical capabilities to conduct banking activities, established by the legislation of the Republic of Belarus;

the organizational structure of the bank meets the requirements established by this Code, as well as transparency of the structure of its property. Criteria of the evaluation of the transparency of the structure of the bank property are established by the National Bank.

For the banks entitled to carry out banking operations on attraction of monetary means from natural persons, not being individual entrepreneurs, in accounts and/or deposits, on opening and operation of bank accounts of such natural persons or applying to obtain such a right, the licensing requirements, besides those listed in the part one of this Article, are:

the bank has a normative capital in the amount established by the National bank, or in twofold amount in case if from the moment when the bank obtained the license to carry out banking activities less than two years passed;

stable financial standing of the bank within last two years or from the moment when the bank obtained the license to carry out banking activities in case if from the moment of obtaining of such a license less than two years passed. Criteria of stable financial standing of a bank and the order of its evaluation are established by the National Bank.

The Bank is obliged to meet constantly licensing requirements.

Article 95. Procedure for obtaining license to carry out banking activities and introducing changes and/or additions into the license

In order to receive a license to carry out banking activities, the following documents shall be submitted to the National Bank:

application according to the form established by the National Bank;

data on members of the board of directors (supervising board), collegiate executive body (in case of its establishment), head and chief accountant of a bank, their deputies, officials, responsible for risk management, officials responsible for the internal control in a bank, head of the internal audit service, appointed (elected) on the moment of submission of the application, according to the form established by the National Bank;

local normative legal acts of the bank, regulating organization of the system of risk management, internal control system and activity of the banks internal audit service;

business plan of the bank;

calculation of the normative capital of the bank according to the form established by the National Bank;

data on beneficiary owners of the bank being as such with regard to at least five percent of bank shares, according to the form established by the National Bank;

payment document confirming the payment of the state duty for the issue of the licence.

Changes and/or additions to the list of banking operations specified in the license to carry out banking activities issued to a bank are introduced:

on the petition of the bank when it meets the licensing requirements;

on the initiative of the National Bank in the case of changes in the legislation of the Republic of Belarus, and also in the cases provided for by Articles 97, 1011, 134 и 1341 of this Code.

Documents submitted by a bank for introducing changes and/or additions into the list of banking operations specified in the license to carry out banking activities issued to the bank, as well as the procedure of their submission and consideration are established by the National Bank.

Decision on issuance (denial to issue) a license to a bank to carry out banking activities, introduction (denial to introduce) of changes and/or additions to the list of banking operations, provided in the license to carry out banking activities issued to a bank shall be taken by the National Bank within the time-limit not exceeding two months from the day of submission to the National bank of documents necessary to obtain a license to carry out banking activities, introduction of changes and/or additions into the list of banking operation specified in such a license.

Prior to taking the decision on issuance of the license to carry out banking activities to a bank, introduction of changes and/or additions into the list of banking operations specified in the license to carry out banking activities issued to the bank, the National bank is entitled to conduct an inspection of the compliance of the bank with the licensing requirements established by this Code for carrying out banking operations indicated in the application for the license, and/or request from the applicant additional documents confirming compliance with such licensing requirements.

The license to carry out banking activities shall be issued to the bank within five working days from the day when the National Bank has taken such decision.

On the basis of the decision on introduction of changes and/or additions into the list of banking operations specified in the license to carry out banking activities issued to the bank, the National bank, within five days from the date of adoption of such decision, issues the license to the bank, formalized on a new blank form with indication of the list of banking operations which the bank is entitled to carry out. Simultaneously the bank must return to the National Bank the license to carry out banking activities (its duplicate) issued earlier.

Founders of a bank are entitled to apply to the National bank for the license to carry out banking activities simultaneously with submission of a petition on the state registration of the bank subject to meeting licensing requirements established by this Code. In this case simultaneously with the documents necessary for the state registration of the bank, documents provided by part one of this Article to obtain a license to carry out banking activities must be submitted. In this instance the time-limit for taking the decision on issuance of the license to carry out banking activities to the bank may be extended by the National Bank up to three months. Upon availability of the grounds for denial to issue the license to carry out banking activities, provided by part one of Article 96 of this Code, the National Bank carries out the state registration of the bank without issuance of such license in the order established by Charter 9 of this Code.

This Article does not apply to the case of revocation by the National bank of a license to carry out banking activities in the part of carrying out certain banking operations, provided for by part two of Article 99 of this Code.

Article 96. Grounds for denial of issuing license to carry out banking activities or of introducing changes and additions into license

The National Bank is entitled to deny the issuance of the license to carry out banking activities in case if:

not all documents provided by Article 95 of this Code, required to obtain the license to carry out banking activities, are submitted;

documents submitted to obtain the license to carry out banking activities contain false data;

the bank does not comply with licensing requirements established by this Code.

Grounds for denial of introducing changes and/or additions into the list of banking operations specified in the license to carry out banking activities are established by the National Bank.

Article 97. Grounds for suspension, reinstatement of license to carry out banking activities and its revocation

The National Bank is entitled to suspend a license to carry out banking activities in the part of performance of certain banking operations for a term necessary for the elimination of violations detected in activities of a bank, but not exceeding one year, in the case of:

non-compliance with prescriptions of the National Bank;

non-compliance with standards of safe functioning and/or other requirements established by Chapter 15 of this Code;

non-submission, late submission, submission of incomplete and/or false reports, as well as other information obligatory for submission to the National Bank in accordance with this Code and other legislation of the Republic of Belarus, and/or violation of the order of its submission;

creation of such financial standing of the bank which can entail threat to stability of the banking system of the Republic of Belarus and/or interests of depositors and other creditors of the bank;

incompliance with licensing requirements established by this Code;

other violations of banking legislation requirements.

The National Bank reinstates the suspended license to carry out banking activities in the part of performance of certain banking operations when the bank submits a petition containing information on the elimination of violations detected in its activities, which entailed the suspension the validity of the license. When necessary, the National Bank is entitled to carry out an inspection of the accuracy of the information on the elimination of violations, submitted by the bank.

In the case when the detected violations have not been eliminated within the period established by the National Bank, the National Bank is entitled to suspend the license to carry out banking activities for a new period or to revoke it, including in the part of performance of certain banking operations.

The National Bank is also entitled to revoke the license to carry out banking activities, including in the part of performance of certain banking operations, in the case of:

incompliance with licensing requirements established by this Code if it could lead to a threat to stability of the banking system of the Republic of Belarus and/or interests of depositors and other creditors of the bank;

a fact of false data submission is detected on the basis of which the license to carry out banking activities was issued or changes and additions into the list of banking operations specified in it were introduced

non-performance of banking operations specified in the issued license to carry out banking activities within a period of one year;

established fact of inaccurate data contained in reports which could lead to a threat to stability of the banking system of the Republic of Belarus and/or interests of depositors and other creditors of the bank;

repeated (not less than twice) violations, within one year, of requirements established by the National Bank for the manner and deadlines of reports submission;

performance, including a single case, of banking operations which are not specified in the issued license to carry out banking activities;

violations of other requirements of banking legislation if, within a year, measures of influence established by this Code were repeatedly (not less than twice) imposed on the bank;

creation of such financial standing of the bank which has entailed the non-fulfillment of its obligations before depositors and other creditors;

presence of grounds for recognizing the bank bankrupt in accordance with legislative acts of the Republic of Belarus;

reorganization of the bank by the way of its merger and affiliation (for the affiliated bank), or splitting-up or transformation in a non-bank credit and financial organization (introduction of corresponding changes into the bank statute);

taking decision of the bank liquidation.

In the case of elimination of violations with regard to which the license to carry out banking activities in the part of performance of certain banking operations has been revoked, the bank is entitled to make a petition to the National bank on introducing changes and/or additions in the list of banking operations specified in the license to carry out banking activities issued to it. When necessary, the National Bank is entitled to carry out an inspection of the accuracy of the information on the elimination of violations, submitted by the bank.

Article 98. Suspension and reinstatement of license to carry out banking activities

The decision of the National Bank on suspension and reinstatement of a license to carry out banking activities in the part of performance of certain banking operations enters into force from the moment of notification of the bank about the decision.

The notification about the suspension and reinstatement of the license to carry out banking activities in the part of performance of certain banking operations is subject to publication by the National Bank in republican printed mass media being official editions and on the official site of the National Bank in the global computer network Internet within 5 days from the date of the respective decision.

In case of suspension of the license to carry out banking activities in the part of performance of certain banking operations, obligations of the parties relative to the performance of those operations are terminated through the fulfillment by parties of theirs obligations under a respective contract. In this instance, it is prohibited for the bank to conclude new contracts and to renegotiate already concluded contracts for a new term the fulfillment of obligation under which is related to the performance of a banking operation in part of which the license to carry out banking activities has been suspended, unless otherwise provided in the decision of the National Bank on suspension of the license to carry out banking activities.

Article 99. Revocation of licenses to carry out banking activities and consequences thereof

The decision of the National Bank on revocation of a license to carry out banking activities, including in the part of performance of certain banking operations, enters into force from the moment of notification of the bank about the decision.

On the basis of the decision on revocation of the license to carry out banking activities in the part of performance of certain banking operations, the National Bank issues a license formalized on a new blank form with the list of banking operations which bank is entitled to carry out. Simultaneously the bank must return to the National Bank the license to carry out banking activities (its duplicate) issued earlier.

The notification about the revocation of the license to carry out banking activities, including in the part of performance of certain banking operations is subject to publication by the National Bank in republican printed mass media being official editions and on the official site of the National Bank in the global computer network Internet within 5 days from the date of the respective decision.

In case of revocation of the license to carry out banking activities in the part of performance of certain banking operations, obligations relative to the performance of those operations are subject to termination because of impossibility of their fulfillment. In this instance, the bank shall compensate depositors and other creditors for all losses they suffered because of the impossibility of the fulfillment by the bank of its obligations relative to the performance of certain banking operations in the part of which the license has been revoked.

In case of the revocation from the bank of the license to carry out banking activities in part of performance of all banking operations specified in part one of Article 8 of this Code, when the license remains valid relative to the performance of other banking operations, it is allowed the transformation of the bank in a non-bank credit and financial organization (introduction of respective changes to the bank statute).

In case of revocation of the license to carry out banking activities and provided that the bank has fulfilled completely its obligations before depositors and other creditors, the bank is subject to liquidation.

From the moment of revocation of the license to carry out banking activities:

the deadline for fulfillment by the bank of its obligations is deemed to be occurred;

obligations of the bank in foreign currency are determined for in Belarusian roubles at the official rate of the National Bank valid on the date of revocation of the license to carry out banking activities;

the bank bears no responsibility for the breach of its obligations because of the impossibility of their fulfillment due to the revocation of the license to carry out banking activities, the termination of accrual of interest, including interest for use of someone else's monetary means, penalty fees (fines, penalty interest) included;

monetary obligations of the bank are executed in Belarusian rubles and/or in foreign currency in accordance with the terms of the transactions concluded;

guarantees issued by the bank cease to be effective;

satisfaction of demands on execution documents regarding recovery of monetary means and other property are suspended, with the exception of satisfaction of demands on execution documents for recovery of wage arrears, payment of royalties, recovery of alimony, and compensation for damage caused to life or health issued before revocation of the bank's license to carry out banking activity;

it is prohibited for the bank to conclude new contracts and to renegotiate for a new term already concluded contracts, to fulfill bank's obligations, including the performance of operations on a correspondent account of the bank, except for the operations relative to current and operating payments of the bank, repayment of dismissal wages and remuneration for work of persons employed under a labor contract, within the expense budget agreed with the National Bank, as well as to return monetary means improperly credited to the correspondent account of the bank, prior to the establishment of a liquidation committee (appointment of the liquidator) or the appointment by the court considering economic cases of a receiver, crisis manager;

the bank returns to the sending bank the monetary means received in favor of the banks customers, as well as the monetary means mistakenly credited to the banks correspondent account as result of a technical error.

Article 100. [Excluded]

CHAPTER 13
REORGANIZATION AND LIQUIDATION OF BANKS

Article 101. Reorganization of a bank

The reorganization of a bank by the way of its split-up or split-off of another bank (banks) is allowed provided that the authorized fund of the bank(s) emerging as a result of the reorganization remains within the minimum authorized fund established by the National Bank.

A bank may merge only with a bank(s). Once banks have taken decision to merge, it is necessary to obtain permission from the National Bank for their merger. The procedure for obtaining permission is established by the National Bank.

A bank may be reorganized by way of affiliation only to another bank. Only a bank or a non-bank credit and financial organization may be affiliated with a bank.

Reorganization of a bank is carried out with notification of the creditors of the bank being reorganized. Any creditor of the bank being reorganized is entitled to require termination or early fulfillment of obligation under which the bank is a debtor and compensations for losses.

When merged, the banks are obliged to return the licenses to carry out banking activities (their duplicates) issued to them and copies thereof to the National bank. At that, the newly created bank is entitled to submit to the National Bank a petition on issuance of the license to carry out banking activities specifying the list of banking operations which the reorganized banks were entitled to perform.

When affiliated, the bank reorganized by the way of affiliation with another bank is obliged to return the license to carry out banking activities (its duplicate) issued to it and copies thereof to the National bank. The bank reorganized by way of affiliation of another bank is entitled to submit to the National Bank a petition on introduction of changes and/or additions to the list of banking operations specified in the license that was issued to it to include in the list the banking operations which the affiliated bank has been entitled to perform.

When split off, the reorganized bank is obliged to return the license to carry out banking activities (its duplicate) issued to it and copies of such license to the National Bank, and the banks being created as a result of split-off shall submit petitions for issuance of licenses to carry out banking activities.

When split-up, the reorganized bank is obliged to return the license to carry out banking activities (its duplicate) issued to it and copies of such license to the National Bank, and banks created as a result of the split-up must submit petitions for issuance of licenses to carry out banking activities to them.

When reorganized, the rights and duties of the bank are transferred to a created bank(s) and other legal persons in the manner established by the civil legislation.

Article 1011. Specific features of state registration upon reorganization of the bank

Upon reorganization of a bank via split off, the state registration of the created bank and, if necessary, the state registration of changes and/or additions introduced into the statute of the bank being reorganized shall be carried out.

Upon reorganization of a bank via its merging, affiliating, the state registration of the banks (bank) being created shall be carried out.

Upon reorganization of a bank via transformation, affiliation, if necessary, the state registration of changes and/or additions introduced into the statute of the bank being reorganized shall be carried out.

A bank being created in the result of reorganization shall comply with licensing requirements established by this Code from the moment of its creation.

The National Bank simultaneously with the decision on state registration of the bank created in the result of reorganization takes a decision on issuance for it of the license to carry out banking activities.

The National Bank simultaneously with the decision on the state registration of changes and/or additions introduced into the statute of the reorganized bank may take a decision on introducing changes into the list of banking operations specified in the license issued to the bank to carry out banking activities.

Article 102. Liquidation of a bank

The termination of activities of a bank is carried out by way of its liquidation in accordance with legislation of the Republic of Belarus and with regard to the requirements established by this Code.

A bank may be liquidated by decision of the general meeting of the shareholders of this bank, of the court considering economic cases in cases provided for by the legislative acts of the Republic of Belarus.

The general meeting of the shareholders of the bank takes the decision to liquidate the bank, sets up a liquidation commission (appoint a liquidator), determines the procedure and time limits of liquidation in accordance with legislation of the Republic of Belarus.

The general meeting of the shareholders of the bank informs the National Bank about the decision specified in part three of this |Article within five-day period from the date of its adoption.

Within twenty days from the date of receipt of information on the adoption of the decision by the general meeting of shareholders of the bank on the liquidation of the bank, the National Bank shall take a decision on revoking the license to carry out banking activity from the bank.

If the National Bank revokes the license to carry out banking activity prior to to the adoption of the decision on liquidation of the bank on the initiative of the general meeting of its shareholders, the general meeting of shareholders of the bank shall take the decision to liquidate the bank within the period of not more than thirty-five days from the date of revoking the license to carrying out banking activities.

The National Bank shall, within five days from the day of receipt of the information about the adoption by the general meeting of shareholders of the bank of the decision on the liquidation of the bank, submits to the Ministry of Justice of the Republic of Belarus the data that the bank is in the process of liquidation for their entry in the Unified State Register of Legal Persons and Individual Entrepreneurs.

The periods during which claims of creditors shall be submitted are determined in accordance with the legislation of the Republic of Belarus.

The liquidation commission (liquidator) shall assess the financial standing of the bank within thirty days from the date of adoption of the decision on liquidation of the bank and, if the bank's property is insufficient to repay claims of the creditors shall file with the court considering economic cases an application on the bankruptcy of the bank. The bankruptcy procedure shall be carried out in the manner established by legislation of the Republic of Belarus.

The bank is deemed to be liquidated from the date when the National Bank has taken the decision about entering into the Unified State Register of Legal Persons and Individual Entrepreneurs the record about the exclusion of the bank from that register. Such a decision shall be taken after the bank has fully repaid the debt on payments to the budget and/or state extra-budgetary funds, satisfaction of all stated demands on existing obligations toward depositors and other creditors of the bank, except for the cases when the bank is liquidated due to bankruptcy.

A notification about the exclusion of the bank from the Unified State Register of Legal Persons and Individual Entrepreneurs is to be placed on the official site of the National Bank  in the global computer network Internet within thirty days from the date of entry of the appropriate record in this register.

Article 103. Termination of activities and obligations of a bank upon its liquidation

The bank is obliged to terminate its activities from the date of the decision on its liquidation.

Persons who have concluded a bank account contract with a bank to be liquidated are obliged to terminate the contract unilaterally within thirty days from the date of publication about the liquidation of the bank in national printed mass media being official editions.

Article 104. Priority of depositors’ and creditors’ claims settlement at bank liquidation

When a bank is liquidated, with the exception of the case of its liquidation due to the bankruptcy, claims of its depositors and other creditors are settled in the following order of priority:

first, monetary means of natural persons placed on the accounts and/or in deposits, and interest accrued thereon, and also claims for compensation of harm caused to life and health of a citizen, claims of natural persons – holders of the bonds issued by the bank, as well as claims of the organization that carries out the guaranteed compensation of bank deposits of natural persons;

second, arrears of alimony of expenses of the state for maintenance of children under state protection, salaries and dismissal wages payable to the banks employees are discharged;

third, indebtedness on payments to the budget and state non-budgetary funds as well as claims of creditors on obligations secured by property pledge shall be compensated;

fourth, deposits of individual entrepreneurs and legal persons and interest thereon are repaid;

fifth, claims of the National Bank relative to credits extended to the bank for refinancing are satisfied;

sixth, claims of other creditors in accordance with legislation of the Republic of Belarus are satisfied.

Claims of depositors and other creditors in each subsequent category are satisfied only after claims of depositors and other creditors of the preceding category have been completely satisfied.

CHAPTER 14
GENERAL PROVISIONS ABOUT NON-BANK CREDIT AND FINANCIAL ORGANIZATIONS

Article 105. Organizational and legal form of non-bank credit and financial organization

A non-bank credit and financial organization is established as an joint-stock company and carries out its activity in the manner established by legislation of the Republic of Belarus, having regard to the specifics stipulated by this Code.

Article 106. Name of a non-bank credit and financial organization

The name of a non-bank credit and financial organization must indicate the nature of activity of the organization through the use of the words "non-bank credit and financial organization" or "НКФО", as well as its organizational and legal form.

Legal persons registered in the territory of the Republic of Belarus in the established order may not use in their name the words "non-bank credit and financial organization", "НКФО" or otherwise indicate that they have the right to carry out banking activities, except for the persons that have obtained license to carry out banking activities from the National Bank.

Article 107. State registration and licensing of non-bank credit and financial organizations

The state registration and licensing of activities of non-bank credit and financial organizations are carried out by the National Bank in the order established by this Code for banks. A non-bank credit and financial organization may perform certain banking operations stipulated by this Code on the basis of the license issued by the National Bank.

Minimum size of the authorized fund of non-bank credit and financial organization as well as the order of its formation are determined by the National Bank.

Article 108. Reorganization and liquidation of non-bank credit and financial organizations

The transformation of a non-bank credit and financial organization into a bank (introduction of relevant changes to the statute of the non-bank credit and financial organization) is allowed subject to requirements stipulated by Chapter 9 of this Code for the state registration of banks.

Liquidation of non-bank credit and financial organizations shall be carried in accordance with the legislation of the Republic of Belarus and with regard to the requirements established by this Code for banks.

SECTION IV
ENSURING STABILITY OF BANKING ACTIVITIES. LIABILITY OF SUBJECTS AND PARTICIPANTS OF BANKING RELATIONS

CHAPTER 15
ENSURING STABILITY OF BANKING ACTIVITIES. PROTECTION OF RIGHTS AND INTERESTS OF DEPOSITORS AND OTHER CREDITORS OF BANKS

Article 109. Ensuring financial soundness of a bank

A bank must constantly ensure its financial soundness, timely and complete fulfillment of obligations before customers and client and contractors, carry out the proper management of risks which arise from its activities, support normative capital of a bank on a level sufficient to compensate risks, form reserves to cover losses and also comply with other requirements established by the National Bank in accordance with this Code.

The head organization of a bank group and/or bank holding is obliged to constantly ensure its financial soundness of the bank group and/or bank holding, to organize proper management of risks on a consolidated basis, to ensure maintenance of normative capital the bank group and/or bank holding on a level sufficient to compensate risks, and also to comply with other requirements established by the National Bank in accordance with this Code.

A legal person capable to exert, directly or indirectly (through third persons), substantial influence on a bank and/or non-bank credit and financial organization, and/or other legal person recognized to be a part of a bank holding, must not allow to exert such influence in case if it prevents the fulfilling of requirements provided by parts one and two of this Article.

Legal persons recognized to be as part of a bank group and/or bank holding are not entitled to perform between them a transaction which prevents the fulfilling of the requirements provided by parts one and two of this Article. Such a transaction may be recognized invalid by the court on a lawsuit of the National Bank.

A bank is obliged to form a reserve fund to use it for covering of losses. The amount of deductions to the reserve fund shall be at least five percent of banks profit, remaining in its disposal after paying taxes, dues (duties), other obligatory payments to the republican and local budgets, state non-budgetary fund of social protection of the population of the Republic of Belarus and other state non-budgetary funds, till the moment when the reserve attains the amount of at least ten percent of the amount of the normative capital of the bank. A shareholder of the bank is entitled to contribute monetary means into the reserve fund of the bank to cover its losses. The National Bank is entitled to increase for a bank the amount of the reserve fund and/or the amount of deductions to it, provided by this part, in cases and in the order provided by Articles 134 and 1341 of this Code.

A bank must constantly carry out the classification of its assets and operations, not reflected in its balance sheet, according to the level of their soundness and establish special reserves to cover possible losses on such assets and operations, including reserves for devaluation of assets. The National bank is entitled, on the basis of motivated reasoning, to change the classification of assets and operations not reflected in its balance sheet, applied by a bank according to the level of their soundness. The bank is obliged to form special reserves to cover possible losses on assets and operations not reflected in its balance sheet, having regard to the changes made by the National Bank to the classification of assets and operations, not reflected in its balance sheet, performed by the bank, according to the level of their soundness.

The bank is obliged to observe standards of safe operation, bans, and restrictions established in accordance with this Code, which ensure its safe and sound operation.

Article 1091. Requirements to the organization of corporate management of a bank, risk management and internal control

Corporate management of a bank means a system of interaction of shareholders, governing bodies, control bodies, officials of the bank and other interested persons, aimed at common management of activities of the bank.

Governing bodies of a bank are obliged to organize effective corporate management of the bank that corresponds to the nature and volume of performed bank operations and other activities and ensures its financial soundness.

A bank is obliged to undertake necessary measures to exclude the conflict of interests and conditions of their appearance, possibility of committing crimes and other illegal actions while carrying out its activities. Spheres and conditions of appearance the conflict of interest in activities of a bank shall be determined by the National Bank.

The board of directors (supervisory board) of a bank ensures the organization of a corporate management of the bank, system of risk management and system of internal control, exclusion of the conflict of interests in bank activities and conditions of its appearance. Requirements to the organization of the system of risk management and system of internal control in a bank shall be established by the National Bank.

The board of directors (supervisory board) shall include at least two independent director unless another number is determined by the National Bank. For the purposes of this Code, a member of the board of directors (supervisory board) of a bank is recognized as an independent director of the bank who without this status being taken into account is not:

beneficial owner being as such in respect of at least five percent of the shares of the bank;

head, member of the collegiate executive body, employee of the bank;

head of another bank;

head, member of a governing body of the legal person – beneficial owner of the bank being as such in respect of at least five percent of the shares of the bank;

head, member of a governing body of the legal person, owner of the property or holder of more than twenty percent of shares in the authorized fund (stakes in the authorized fund) of which, directly or indirectly (through other natural persons and/or other organizations) is a beneficial owner of the bank being as such in respect of at least five percent of the shares of the bank. For the recognition of the mentioned beneficial owner of a bank as an indirect owner of property or an indirect holder of shares (stakes in the authorized fund) of such a legal person, grounds shall be applied for recognizing the presence of indirect ownership of shares and the procedure for calculating the part of shares of the bank being in such possession, to be established by the National Bank in accordance with part three of the Article 34 of this Code;

head, a member of the governing body, an employee of an economic entity that is affiliated or recognized as dependent in respect of the bank;

head, member of the governing body, employee of a legal person included in a bank group, a bank holding a member of which is a bank, and/or of a legal person that exerts (is capable to exert) directly or indirectly (through third parties) a significant influence recognized as such in accordance with parts ten – thirteen of  Article 35 of this Code on decisions being taken by the governing bodies of another legal person that makes part of the bank group, the bank holding, of which the bank is a participant;

head, member of the governing body, employee of the legal person being an affiliated person of the bank and/or insider of the bank, bank group, bank holding;

affiliated person of the bank and/or insider of the bank, bank group, bank holding;

person on the decisions of whom taken in respect of the bank a significant influence may be exerted by the bank and/or persons connected with it. The National Bank, in accordance with the procedure established by it, is entitled, on the basis of a reasoned judgment and/or methods established by it, to recognize persons as connected with the bank, as well as recognize the influence of the bank and/or persons connected with it as significant.

The board of directors (supervisory board) of a bank establishes an audit committee the functions of which include general management and support of the functioning of the system of internal control, service of internal audit of the bank, and also selection and organization of interaction with audit organizations, auditors – individual entrepreneurs. The audit committee shall be headed by an independent director.

A member of the board of directors (supervisory board), with the exception of the representative of the state in the governing bodies of the bank, the head and the chief accountant of the bank, their deputies, members of the collegial executive body of the Bank, as well as candidates for these positions must meet the qualification requirements and/or requirements to the business reputation, established for them. Assessment of compliance with such requirements shall be conducted by a special qualification commission of the National Bank in the cases and order established by the National Bank.

The executive body of a bank organizes the system of risk management and internal control system ensures that the bank fulfills the goals and objectives established by the board of directors (supervisory board). The bank is not entitled to delegate powers of its executive body under the contract to another commercial organization or individual entrepreneur (manager).

The head of a bank is a person acting as the sole executive body, or person that chairs the collegial executive body.

The qualification requirements are:

for the head of a bank – higher education, working experience of at least three years in executive positions in a bank, non-bank credit and financial organization, international financial institutions, the National Bank and/or the audit firm carrying out auditing in banks, non-bank credit and financial organizations, sufficient theoretical and practical knowledge;

for a deputy of the head of a bank, member of the collegial executive body of a bank – higher education, working experience of at least two years in executive positions in a bank, non-bank credit and financial organization, international financial institutions, the National Bank and/or the audit firm carrying out auditing in banks, non-bank credit and financial organizations, sufficient theoretical and practical knowledge;

for the chief accountant of a bank – higher education, special training in the field of international financial reporting standards, work experience of at least three years in executive positions in a bank, non-bank credit and financial organization, and/or the National Bank in the field of accounting, accounting (financial)  reporting, internal audit or as an auditor - worker of an audit organization (worker of an auditor-individual entrepreneur)  or auditor – individual entrepreneur carrying out auditing activity in banks, non-bank credit and financial organizations, sufficient theoretical and practical knowledge, as well as  the certificate of professional accountant of the bank;

for the deputy chief accountant of a bank – higher education, special training in the field of international financial reporting standards, work experience of at least two years in a bank, non-bank credit and financial organization, and/or the National Bank in the field of accounting, accounting (financial)  reporting, internal audit or as an auditor - worker of an audit organization (worker of an auditor-individual entrepreneur)  or auditor – individual entrepreneur carrying out auditing activity in banks, non-bank credit and financial organizations, sufficient theoretical and practical knowledge.

Verification of sufficiency of theoretical and practical knowledge of persons indicated in part ten of this Article, is carried out in the form of testing and/or interview, held in the order provided by the National Bank.

Requirements to the business reputation are:

absence of non-cleared or non-expunged record of conviction for crimes against property and the order of carrying out economic activity;

absence during the last two years of facts of termination of employment contract on the initiative of the employer in the case when the persons referred to in part ten of this Article committed guilty acts being the grounds for the loss of credibility on the part of the employer;

absence of facts, established by a court decision, of wrongful actions that entailed the bankruptcy of a legal person.

The National Bank is entitled to establish qualification requirements to independent directors and/or other members of the board of directors (supervisory board) as well as additional qualification requirements and requirements to business reputation to the persons specified in part ten of this Article.

While concluding a labour contract with the head, chief accountant of the bank, their deputies, members of the collective executive body of the bank, the bank is obliged to require and the mentioned persons – to present a document on passing the assessment of conformity with qualification requirements, and/or requirements to business reputation, issued by the National Bank.

A bank is required to dismiss the head, chief accountant, their deputies, a member of the collegial executive body of the bank in case if the document on passing the assessment of their conformity with the qualification requirements, and/or requirements to business reputation has become ineffective on the grounds and in the order established by the National Bank.

The bank is obliged to appoint an official responsible for managing risks in the bank, and also to appoint officials and/or to establish a permanently functioning division (divisions) on management of special types of risks in accordance with the nature and volume of performed bank operations and other activities. The official responsible for managing risks in the bank reports directly to the head of the bank and is accountable to the board of directors (supervisory board).

A bank is obliged to appoint an official responsible for internal control in the bank, to create a special division on preventing the legalization of  incomes obtained by criminal means and the financing of terrorist activities and financing the proliferation of weapons of mass destruction, and also to appoint officials and/or to create a permanently acting division (divisions) for the implementation of the internal control according to the nature and volume of performed banking operations and other activities. The official responsible for internal control in the bank reports directly to the head of the bank and is accountable to the board of directors (supervisory board).

Accountability of the official responsible for risk management in the bank, and the official responsible for internal control in the bank, to the board of directors (supervisory board) means:

appointment and release of such persons from office with the approval of the board of directors (supervisory board);

determination by the board of directors (supervisory board) of the conditions of remuneration of such persons;

regular review by the board of directors (supervisory board) of reports of such persons.

The head organization of a bank group and/or bank holding is obliged to organize the system of risk management and internal control system in the bank group and/or bank holding on a consolidated basis. Requirements to the organization of the system of risk management and system of internal control in a bank group and/or bank holding shall be established by the National Bank.

A bank is obliged to establish internal audit service which is accountable in its activity to the board of directors (supervisory board).

Accountability of the internal audit service to the board of directors (supervisory board) means:

approval by the board of directors (supervisory board) of regulations on internal audit service, changes and/or additions introduced into it;

approval by the board of directors (supervisory board) of the cost estimates of the internal audit service and determination of conditions of remuneration of its head and specialists;

appointment of the head of internal audit service and his release from office with the consent of the board of directors (supervisory board);

approval by the board of directors (supervisory board) of the work plan of the internal audit service;

regular review and approval by the board of directors (supervisory board) of the internal audit service reports.

A bank shall ensure the continuity of activity of the internal audit service, independence, objectivity and professional competence of the head and specialists of the internal audit service, as well as unhindered access of the internal audit service to all bank documentation as well as to conduct of an internal audit of any division or activity direction of the bank.

The bank sets the qualification requirements and requirements for business reputation for heads of affiliates, structural divisions, internal audit service, the official responsible for risk management in the bank, and the official responsible for internal control in the bank.

The National Bank is entitled to impose additional requirements for the organization of corporate management of a bank.

Article 110. Required reserves fund allocated in the National Bank

Banks must deposit a portion of attracted monetary means in the required reserves fund allocated in the National Bank.

The required reserves fund is used for regulating currency circulation in accordance with the objectives and tasks of monetary and credit policy of the Republic of Belarus and for insuring liquidity and solvency of the bank.

Article 111. Safe operation standards established for banks

With a view of ensuring stability of the banking system of the Republic of Belarus, the National Bank establishes the following safe operation standards for banks:

minimum size of regulatory capital;

liquidity standards;

regulatory capital adequacy standards;

standards of limitation of risk concentration;

foreign currency risk restriction standards;

standards of bank participation in authorized funds of other commercial organizations;

other standards necessary to limit risks of bank activities and to ensure secure and reliable functioning of banks.

The National Bank determines methods to calculate the regulatory capital of a bank, its assets, liabilities and operations not reflected in the balance sheet, for each of standards of safe functioning, having regard to the international standards and consultations with banks, bank unions and associations.

The National Bank is entitled, on the basis of a reasoned judgment, to change for a bank the value of standards of safe functioning and/or methods of calculation of the regulatory capital of the bank, its risks, assets, liabilities and operations that are not reflected on the balance sheet, for individual standards of safe functioning and/or set other (additional) standards of safe functioning.

The National Bank informs banks on forthcoming changes of safe operation standards and methods of calculation thereof at least one month prior to putting them into force.

The National Bank in the order established by it, is entitled, on the basis of a reasoned judgment and/or techniques established by it, to determine the amount of the regulatory capital of the bank, its risks, assets, liabilities and operations that are not reflected on the balance sheet. The bank is obliged to reflect in its books the amount of the regulatory capital, risks, assets, liabilities and operations that are not reflected on the balance, determined by the National Bank in accordance with the requirements of this Article.

The National Bank establishes safe operation standards for non-bank credit and financial organizations depending on the list of banking operations those organizations may carry out.

Article 112. Minimum size of regulatory capital

The size of the regulatory capital is established as a sum of the authorized fund, other funds, emission profit and undivided profits with the increase on a range of other constituent elements of the regulatory capital of a bank, the list and order of the calculation of which are determined by the National bank. Component elements of the regulatory capital of a bank are determined on the ability to cover the losses of the bank.

The regulatory capital of the bank is decreased by the amount on which special reserves, provided by part six of Article 109 of this Code are not created and by a number of other deductions, the list and order of calculation of which are determined by the National Bank.

Article 113. Liquidity standards

Liquidity standards of a bank are established as a ratio of assets, liabilities and operations not reflected on the balance sheet, having regard to the time-limits, sums, types of assets, liabilities, operations not reflected on the balance sheet and also other factors determined by the National Bank.

Article 114. Regulatory capital adequacy standards

Regulatory capital adequacy standards of a bank are established as a maximum ratio of the size of (part of) regulatory capital to risks accepted by the bank.

Article 115. Standards of limitation of risk concentration

The risk concentration restriction standards are established as a percentage of regulatory capital of a bank.

With a view of restriction of banks credit risks, standards of maximum exposure to a debtor, insider (group of interconnected debtors), insider (group of interconnected debtors), as well as standards of total of large exposures and of total of exposures to insiders and persons interconnected with the latter, are established.

While determining an exposure to a debtor it shall be taken in consideration total of credits and other monetary obligations of the debtor in relation to the bank, as well as off-balance-sheet obligations of the bank in relation to the debtor which envisage the fulfillment in monetary form.

A large exposure to a debtor is considered an exposure exceeding the percentage ratio to the regulatory capital of the bank established by the National Bank.

The National Bank establishes differentiated standards of restriction of exposure concentration concerning the debtors being the insiders of the bank and of persons interconnected with them.

Interconnected debtors are considered natural and legal persons – banks debtors connected economically and/or legally in such a way that deterioration of the financial standing of one debtor entails or makes likely the deterioration of the financial standing another debtor (debtors). Interconnected debtors may be understood to be persons that have property in common ownership, mutual guarantees and/or obligations between them, that simultaneously occupy executive positions at two or more other debtors; a legal person and a natural person that occupies an executive position in this legal person; persons that carry out joint activity, related through a common object of crediting and/or investment project, with the exception of interbank crediting; spouses; persons that have close ties of kinship or affinity; persons being in relation to each other a legal person and a person that has the right to give instructions binding for such a legal person or has a possibility to determine otherwise its actions, including being parent economic company or partnership and a subsidiary company, dependent economic companies, unitary enterprise and owner of its property; and also other persons recognized as such on a basis of a reasoned opinion of the bank.

Insiders are deemed to be natural and legal persons that can influence the decision on performing a bank operation credit constituting an exposure and/or other action without having regard to the interests of the bank by virtue of connection with the bank and/or a shareholder of the bank, and/or with a beneficiary owner of the bank, and/or members of governing bodies of the bank. Insiders may be considered to be shareholders and other beneficiary owners of the bank who posses at least five percent of bank shares, members of governing bodies of the bank, with the exception of the general meeting of shareholders, members of the credit council (committee), heads of separate and structural divisions of the bank, and also other persons recognized as such on a basis of a reasoned opinion of the bank.

To insiders pertain also natural persons being in a marriage with, close relatives or affinity of natural persons specified in part 7 of this Article. Natural persons being insiders of the bank in accordance with part seven of this Article remain considered insiders within one year from the moment of losing connection with the bank.

The National Bank is entitled, on the basis of a reasoned opinion and/or methodology established by it, to assess the relationships of bank debtors between them and also with the bank, its shareholders, beneficiary owners and/or members of governing bodies of the bank and to recognize the mentioned persons to be interconnected debtors and/or insiders of the bank. The decision on recognition of such persons to be interconnected debtors and/or insiders is taken by the National Bank in the order established by it. The bank is obliged to calculate the amount of exposure, reflect it in its reports and also to take measures to limit it and comply with the standards of risk concentration restriction having regard to the recognition by the National bank of mentioned persons to be interconnected debtors and/or insiders of the bank in accordance with the requirements of this Article.

Article 116. Foreign currency risk restriction standards

The National Bank establishes standards of an open foreign currency position on foreign currency risk as a percentage to the regulatory capital of a bank.

Article 117. Standards of bank participation in authorized funds of other commercial organizations

The National Bank establishes the following standards as a maximum percentage ration to the regulatory capital of a bank:

standard of the banks participation in the authorized fund of one commercial organization;

standard of the total banks participation in authorized funds of all commercial organizations;

standard of the total banks participation in authorized funds of commercial organizations the main activity of which is not banking and/or financial activity.

The list of activities related to financial activities for calculation of the total value of the bank's participation in authorized funds of commercial organizations, as well as the procedure for determining the main activity of a commercial organization are e established by the National Bank.

Article 118. Safe operation standards established for the purposes of carrying out bank supervision on a consolidated basis

The National Bank may establish for bank groups the following safe operation standards: of liquidity, regulatory capital adequacy, risk concentration restriction, currency risk restriction. The duty to comply with the indicated safe operation standards is imposed on the head organization of the bank group.

Insiders of a bank group are deemed to be insiders of all banks, non-bank credit and financial organizations, recognized as being part of such a bank group.

For bank holdings, safe operation standards indicated in part one of this Article may be established by the National Bank provided that head organizations of such holdings are a bank or a non-bank credit and financial organization. The duty on fulfilling the safe operation standard established by the National Bank for a bank holding is imposed on the head organization of such a holding.

Insiders of a bank holding are deemed to be insiders of the bank, non-bank credit and financial organization and other legal persons not being banks or non-bank credit and financial organizations and recognized in accordance with this Code to be part of such a bank holding. The order for determining persons being insiders of legal persons not being banks or non-bank credit and financial organizations is established by the National Bank.

For banks, non-bank credit and financial organizations being recognized as part of a bank group and/or a bank holding, safe operation standards are established by the National Bank having regard to risks connected with exerting by other legal persons of substantial influence on decisions taken by governing bodies of such banks, non-bank credit and financial organizations, and also connected with the possibility exerting by such banks substantial influence on the decisions taken by governing bodies of other legal persons.

The National Bank is entitled, on the basis of a reasoned judgment, to change for a bank the value of safe operation standards and/or methods of calculation of the regulatory capital of the bank group, bank holding, risks, assets, liabilities and operations that are not reflected on the balance sheet, for certain safe operation standards and/or set other (additional) safe operation standards.

The National Bank in the order established by it, is entitled, on the basis of a reasoned judgment and/or methodologies established by it, to determine the amount of the regulatory capital of a bank group, bank holding, its risks, assets, liabilities and operations that are not reflected on the balance sheet. The head organization of a bank group, bank holding is obliged to reflect in the consolidated reports on activities of the bank group and/or bank holding the amount of the regulatory capital, risks, assets, liabilities and operations that are not reflected on the balance sheet, determined by the National Bank in accordance with the requirements of this Article.

Article 1181. Informing the National Bank

A bank is obliged, within five working days, to inform the National Bank about:

appointment (election), transfer and dismissal (release from office) of a member of the board of directors (supervisory board), the collegial executive body, the head, the chief accountant, their deputies, the official responsible for risk management in the bank, the official responsible for internal control of the bank, and the head of internal audit service;

facts of inconformity of a member of the board of directors (supervisory board), the collegial executive body, the head, the chief accountant, their deputies to the established requirements to business reputation;

changes in the composition of the beneficial owners being as such in respect of at least five percent of the shares of the bank;

establishment, change of location and closing of structural divisions, including those mobiles and situated outside the banks location and not having independent balance sheet, its subsidiary, and also of remote workplaces, carrying out banking operations and/or other activity;

losses (expenses) in the sum exceeding five percent of the bank's regulatory capital;

existence of grounds for application of measures to prevent the bankruptcy of the bank, provided by the legislation on economic insolvency (bankruptcy);

termination of banking operations specified in the issued license to carry out banking activities;

other changes in its activities, organizational structure and ownership structure, general situation, significant adverse events in the cases determined by the National Bank.

Article 119. Reports to be submitted to the National Bank

A bank shall draw up and submit reports on its activity to the National Bank in the order and volume, established by the legislative acts of the Republic of Belarus and/or National Bank.

For the purposes of supervision of banking activities on a consolidated basis, the head organization of a bank group and/or bank holding shall submit to the National Bank, in the order and volume established by it, consolidated reports on activities respectively of the bank group and/or bank holding.

Article 1191. Disclosure of information

A bank is obliged to disclose the information on its activity by means of its publication, placement in the premises belonging to it or on its official site in the global computer network Internet, presentation on demand of customers and other interested users in the amount and the order, established by the National bank.

A bank publishes, in the amount and in the order established by the National Bank, in the printed mass media determined by the National Bank, and places on its official site in the global computer network Internet reports on its activities and the annual accounting (financial) reports together with the audit report being drawn up according to results of its audit.

The head organization of a bank group and/or a bank holding is obliged to disclose information on the activities of the bank group and/or a bank holding by means of its publication, placing on its official site in the global computer network Internet in the amount and the order established by the National Bank.

The head organization of a bank group and/or a bank holding publishes, in the amount and order established by the National Bank, in printed mass media determined by the National Bank and place on its official site in the global computer network Internet its consolidated reports on activities of the bank group and/or the bank holding, and also annual consolidated accounting (financial) reports together with the audit report being drawn up according to results of its audit.

Article 120. Guarantees for repayment of means attracted by banks from natural persons

The State shall encourage and protect the savings of citizens and guarantee conditions for the return of deposits.

To ensure guarantees of the repayment of means attracted by banks from natural persons and compensation for loss of income on deposited means, various forms of guaranteeing repayment of such means may be developed in accordance with legislation of the Republic of Belarus.

Article 121. Bank secrecy

Data on accounts and deposits, including data on availability of an account with a bank (non-bank credit and financial organization), account holder, account number, and other details of the account, amounts of balances of accounts and deposits, as well as data on particular transactions, on operations without opening an account, operations on accounts and deposits, and property stored at the bank constitute bank secrecy and may not be disclosed.

The National Bank and other banks guarantee non-disclosure of bank secrecy of their customers and correspondent banks. Employees of the National Bank and other banks are obliged to preserve bank secrecy except for the cases stipulated by this Code and other legislative acts of the Republic of Belarus.

Data constituting bank secrecy of natural persons, with the exception of individual entrepreneurs, are presented by the bank to said persons and their authorized representatives, on the basis of a written consent of such persons personally submitted to the bank or of the consent presented to the bank in electronic form using  soft- and hardware means and technologies making it possible to reliably establish that it proceeds from the respective persons – to any third person, in the volume necessary for the fulfillment of the contract of rendering auditing services – audit organizations (auditors-individual entrepreneurs) rendering audit services to a legal person or individual entrepreneur. In the cases provided by the legislative acts of the Republic of Belarus, including by this Code, data constituting the bank secrecy of legal persons and individual entrepreneurs are presented by the bank:

to courts – on cases being in their proceedings;

to court executors – on court resolutions and other execution documents being in their proceedings;

to a public prosecutor, or his deputy, and also, with the authorization of a public prosecutor or his deputy, to bodies of inquiry and preliminary investigation with respect to materials and/or cases under their consideration;

to special divisions for fighting the corruption and organized criminality of the bodies of internal affairs;

to divisions for fighting economic crimes of the bodies of internal affairs – with a sanction of the public prosecutor or its deputy;

to the Operative and Analytical Center under the President of the Republic of Belarus;

bodies of the Committee of State Control of the Republic of Belarus;

bodies of state securities of the Republic of Belarus;

tax and customs bodies;

notaries for execution of notarial actions;

to the National Bank.

Banks are obliged to submit data constituting bank secrecy of legal persons to the Ministry of Finance of the Republic of Belarus, its territorial bodies,  local financial bodies of financial bodies of administrations of districts of the city of Minsk in the cases and volume established by the legislative acts of the Republic of Belarus in the sphere of budgetary legislation of the Republic of Belarus..

Data constituting bank secrecy of natural persons, with the exception of individual entrepreneurs, are presented by the bank to said persons and their authorized representatives, on the basis of a written consent of such persons personally submitted to the bank or of the consent presented to the bank in electronic form using  soft- and hardware means and technologies making it possible to reliably establish that it proceeds from the respective persons  – to any third person. In the cases provided by the legislative acts of the Republic of Belarus, including by this Code, data constituting the bank secrecy of natural persons with the exception of individual entrepreneurs are presented by the bank:

to courts – with respect to criminal cases being in their proceedings in connection with which, in accordance with the law, property could be confiscated and/or other material punishment may be imposed, civil suits considered within criminal proceedings, case on administrative offences, civil and economic cases;

to court executors – on court resolutions and other execution documents being in their proceedings;

to a public prosecutor, or his deputy, and also, with the authorization of a public prosecutor or his deputy, to bodies of inquiry and preliminary investigation with respect to materials and/or cases under their consideration;

special divisions for fighting the corruption and organized criminality of the bodies of internal affairs, divisions for fighting economic crimes of the bodies of internal affairs – with a sanction of the public prosecutor or its deputy;

to Department of Financial Monitoring of the Committee of State Control of the Republic of Belarus;

notaries for execution of notarial actions;

to the National Bank;

the organization that carries out the guaranteed compensation of bank deposits of natural persons;

to tax bodies – in relation to the fulfillment by the banks of functions of tax agents upon taxable with the personal income tax of incomes in the form of interest received by natural persons on bank deposits, monetary means being in a current (settlement) bank account in banks and non-bank credit and financial organizations being in the territory of the Republic of Belarus.

In case of the death of an account holder or depositor, statement on balances of his accounts and/or deposits and/or property stored in the bank is furnished by a bank to persons designated by the account holder or depositor in a testamentary disposition, to notaries – with respect to probation cases under their consideration, and to foreign consular offices – with respect to accounts of foreign citizens.

Data constituting bank secrecy are presented by a bank:

to sureties, pledgers, and other persons who have provided security for the fulfillment of the obligations of the person, in respect of the secured obligations in the amount necessary for the fulfillment by the said persons of the undertaken obligations;

to correspondent banks, organizations ensuring the functioning of the automated information system of the single settlement and information space and its subsystems, organizations implementing, in accordance with contracts concluded with banks, processing, personalization of bank payment cards, distribution and/or redemption of electronic money in the volume required to fulfill their obligations;

to a person to whom the bank assigns rights (claims) – in the volume required for the implementation by this person of such rights (claims).

Data constituting bank secrecy are presented by the bank in other cases if that is provided by the legislative acts of the Republic of Belarus.

Data constituting bank secrecy may be presented by a bank:

on the basis of the original written request signed by the person requesting the said data (the head of a state body, another organization or an authorized official, individual entrepreneur, a natural person) authenticated by the seal of the state body (in case of request of the state body) and containing references to the norms of legislative acts of the Republic Belarus, granting the given person the right to receive such information;

on the basis of a request in electronic form using soft- and hardware means and technologies making it possible to confirm the integrity and authenticity of the document, containing references to the norms of legislative acts of the Republic of Belarus granting the requesting person the right to receive such information;

to an authorized body, special financial organization having the right to receive such information in accordance with the legislative acts of the Republic of Belarus, within the framework of agreements concluded between them and the bank, and/or in accordance with the normative legal acts adopted by the National Bank, which determine the procedure the form and/or frequency of presenting such data.

Data constituting bank secrecy that has arisen both before and after the occurrence of the grounds for their submission in accordance with part nine of this Article may be submitted.

The submission of data constituting banking secrecy is carried out by the National Bank in accordance with the rules established by this Article for banks.

Provision by the bank of data constituting bank secrecy when a bank goes to court, the prosecutor's office, criminal prosecution bodies, notaries or lawyers to protect and/or restore its rights and legitimate interests, submitting such information to the bodies conducting the administrative process concerning violations detected by banks, to audit organizations (auditors - individual entrepreneurs) in the volume necessary to fulfill a contract or rendering audit services, concluded with the bank, as well as to the National Bank and other banks in cases provided for by the legislative acts of the Republic of Belarus do not constitute a violation of the bank secrecy.

The persons who received, in accordance with this Article, data constituting bank secrecy, are subject to the requirements of part two of this Article established for banks. Persons that have received data constituting bank secrecy in accordance with this Article may not disclose it without consent of the consumer, including the account holder and/or depositor or property depositor, except for cases stipulated by legislative acts of the Republic of Belarus, are subject to responsibility for the disclosure of the data in accordance with the legislative acts of the Republic of Belarus.

Article 122. Restrictions of banks activities and their participation in authorized funds of other legal persons

Banks are not entitled to provide:

credits to the Government of the Republic of Belarus;

favorable terms and conditions to insiders and workers of the bank, the National Bank, when carrying out banking operations.

For the purposes of this Article, favorable terms and conditions mean:

conclusion with persons specified in indent three of part one of this Article or in their interest of such a transaction which, with regard to its substance and/or condition(s) the bank did not conclude and/or does not conclude with other customers;

charging persons specified in indent three of part one of this Article remuneration and/or fee for performance of a bank operation in an lower amount than the remuneration and/or fee for performance of that bank operation charged on other customers of the bank.

Transactions with favorable terms and conditions concluded with persons specified in indent three of part one of this Article are void.

The head and the chief accountant of a bank, their deputies, member of a collegial executive body of a bank, the head of a separate and structural division of a bank are not entitled to occupy positions in other commercial organizations whose main activity is a banking and/or financial activity and/or which are insiders of this bank.

Banks is not entitled to reduce the size of their authorized fund without prior written consent of the National Bank.

Participation of a bank in the authorized fund of a legal person, in the cases established by the National bank, is allowed only after obtaining a permission of the National Bank. The permission is issued by the National Bank on the results of the analysis of financial standing of this bank, possibility of management of the acquired shares (parts), influence on its activity and risks of persons, in the authorized funds of which the bank participates.

The founders of a bank have no right to retire from shareholders of the bank within first three years from the day of its state registration unless otherwise provided by this Code.

Article 123. Requirements to the head of a bank, his deputies, members of banks collegiate executive body and other persons when banks shares are acquired

The head of a bank, his deputies and members of the banks collegiate executive body are obliged to notify the National Bank and the executive body of the bank, and in the cases stipulated by legislative acts of the Republic of Belarus also authorized state bodies and other organizations about their acquisition of the banks shares and of all their transactions with such shares within five days from the date of conclusion thereof.

Failure of the head of a bank, his deputies, members of the banks collegiate executive body to comply with the requirements provided for by part one of this Article entails responsibility in accordance with the legislative acts of the Republic of Belarus.

To acquire into ownership, economic management, operative administration, or to receive into the trust management, as a result of one or more transactions, by a natural or legal person, including a bank shareholder, or a group of natural and/or legal persons interlinked by a contract, or by a group of legal persons that are subsidiaries or dependent in relation to each other, five and more percent of the authorized fund of a bank, as well as all subsequent acquisitions by these persons of shares of the bank, the acquirer and trustee are obliged to obtain permission from the National Bank in the order established by it.

The permission of the National Bank shall state a maximum number or stake of the banks shares that may be acquired during a year from the day of issuance of such permission unless another period established in the permission of the National Bank.

Issuance of the permission of the National bank is not allowed if:

acquirer of shares does not meet the requirements set for the founders of a bank, established by the National Bank;

not all documents determined by the National Bank were submitted to obtain the permission from the National Bank;

documents submitted to obtain the permission of the National Bank contain false data;

facts are established concerning the acquisition of the bank’s shares at the expense of monetary means or other property not being own means of the acquirer, and/or provided to the acquirer by the bank, and/or provided by other persons in the case if the bank itself accepted the risks arisen in relation to  the provision to the acquirer of such monetary means, other property, and/or at the expense of incomes obtained by criminal means;;

as a result of acquisition of shares, the ownership structure of the bank and/or at least one of its beneficial owners that will possess at least five percent of the shares would not meet the requirements established by the National Bank.

Transactions on acquisition or transfer into trust management of five percent or more of the shares of the bank, made without the authorization of the National Bank, are invalid.

Article 124. Banks’ transactions with own shares

A bank must obtain permission of the National Bank for the purchase of more than five percent of the shares issued by the bank

The National Bank is entitled to deny the issuance of the permission for the purchase by the bank of shares issued by it if it leads to a breach of safe operation standards and/or appearance of the grounds for application to the bank of measures on prevention of the bankruptcy, provided by the legislation on economic insolvency (bankruptcy).

The requirements of this Article shall not cover the acquisition by the bank of shares issued by it in the case provided by indent three of part four of Article 1341 of this Code, and at the request of the bank's shareholders in the cases stipulated by the legislation of the Republic of Belarus.

Article 125. Bank activity on attracting deposits and extending credits

Banks independently establish terms of and procedures for attracting monetary means of natural and/or legal persons in deposits and the placement of those monetary means within the limits established by this Code and normative legal acts of the National Bank.

Banks shall ensure access to data regarding the average rates of interest on credits and deposits.

Where the President of the Republic of Belarus or, in the established order, the Government of the Republic of Belarus takes decisions on extending bank credits on preferential terms and conditions or on changing terms and conditions of credits extended earlier for preferential terms and conditions, such banks are compensated for their losses from the sources determined in those decisions or in accordance therewith.

Article 126. Methods of securing fulfillment of obligations under contracts concluded by banks

The fulfillment of obligations under contracts concluded by banks may be secured by a guarantee deposit of money, transfer of legal title in property, including property rights, pledge of immovable and movable property, suretyship, guarantee and other methods stipulated by legislation of the Republic of Belarus or by a contract.

Securing fulfillment of obligations under contracts concluded by banks by a guarantee deposit of money, transfer of a legal title in property, including in property rights, is carried out on conditions stipulated respectively by Articles 148 and 149 of this Code having regard to specific features of legal relationships arising on the basis of such contracts.

CHAPTER 16
IMPOSING ARREST AND LEVYING EXECUTION ON MONETARY MEANS AND OTHER PROPERTY HELD IN BANKS. SUSPENSION OF OPERATIONS ON ACCOUNTS IN BANK

Article 127. General provisions of imposing arrest and levying execution on monetary means and other property held in banks

Arrest on monetary means and other property of a natural person and legal person held on accounts, deposits or stored in a bank may be imposed only in accordance with this Code and other legislative acts of the Republic of Belarus.

Imposition of arrest on monetary means and other property of a natural and legal person being on accounts, deposits or in safekeeping in a bank, as well as lifting of the arrest is possible only after submission to the bank for subsequent storage of originals or of copies certified in the order established by the legislation of the Republic of Belarus of documents or extracts from documents provided for in Articles 128 and 129 of this Code, with the exception of the cases when the specified documents are received by the bank in electronic form in the order established by the legislation of the Republic of Belarus.

Levying execution on monetary means and other property of a natural person and legal person held on accounts, deposits or stored in a bank is allowed in the cases determined by legislative acts of the Republic of Belarus according to:

executive endorsements of notaries and other execution documents;

decision (order) of an authorized state body (official).

When arrest has been imposed on monetary means and other property of a natural person and legal person held on accounts, deposits or stored in a bank, the bank discontinues all debiting operations on accounts of that person and return of property of that person within property limits on which the arrest is imposed unless otherwise stipulated by legislative acts of the Republic of Belarus and relevant decision of an authorized state body (official) on imposing arrest.

Article 128. Imposing arrest and levying execution on monetary means and other property held in banks of a legal person and individual entrepreneur held in a bank

Arrest on monetary means and other property of a legal person and individual entrepreneur held on accounts, deposits or stored in a bank may be imposed only according to:

a court decision (ruling) within the amount of a claim;

a decision of a prosecutor or his deputy, of a body of criminal prosecution in the cases stipulated by the Code of Criminal Procedure of the Republic of Belarus;

an execution document.

Arrest on property of a legal person or individual entrepreneur held on accounts, deposits or stored in a bank may be also imposed by decision of bodies of the Committee of State Control of the Republic of Belarus, customs and taxation bodies in the cases stipulated by legislative acts of the Republic of Belarus.

Article 129. Imposing arrest on monetary means and other property of a natural person held in bank

Arrest on monetary means and other property of a natural person not being individual entrepreneur held on accounts, deposits or stored in a bank may be imposed only according to:

a resolution (ruling) of the court – with a view to ensure the execution of a sentence in a criminal case in the part of a civil claim, other property penalties or possible confiscation of property, ensuring the enforcement of a resolution to impose an administrative penalty, as well as securing a claim in civil and economic matters;

a resolution of the court executor – on court resolutions and other execution documents being in his proceedings;

a decision of a prosecutor or his deputy, of a body of criminal prosecution in the cases stipulated by the Code of Criminal Procedure of the Republic of Belarus.

Arrest on monetary means and other property of a natural person not being individual entrepreneur held on accounts, deposits or stored in a bank may be also imposed according to decisions of taxation or customs bodies in the cases stipulated by legislative acts of the Republic of Belarus.

Article 130. Imposing arrest on monetary means and other property of a bank

Imposing arrest on monetary means of a bank is carried out by banks transferring monetary means to a special deposit account with the National Bank. The National Bank debits such account in the order established by legislation of the Republic of Belarus.

Imposing arrest on other property of a bank is carried out in order established by legislative acts of the Republic of Belarus.

When securing an action for recovery of monetary means from a bank, the bank is entitled to place on the courts deposit account the sum of money claimed by the plaintiff.

Imposing arrest on the correspondent account of a bank, suspension or termination of operations on such account are not allowed except for the case of the revocation of the license to carry out banking activities.

Article 131. Confiscation of monetary means and other property of a natural and legal person

Monetary means and other property of a natural and legal person may be confiscated only on the basis of court decision on property confiscation or a court sentence having legal effect.

Article 132. Suspension of operations on accounts in bank

The suspension of operations on accounts in a bank is carried out by authorized state bodies (officials), banks in the cases and the order determined by legislative acts of the Republic of Belarus.

CHAPTER 17
LIABILITY OF SUBJECTS AND PARTICIPANTS OF BANKING RELATIONSHIPS

Article 133. Liability for carrying out banking activities without the license to carry out banking activities

Persons carrying out banking activities without a license to carry out banking activities are liable in accordance with legislation of the Republic of Belarus.

When banking activities are carried out without a license to carry out banking activities, a legal person may be liquidated upon the decision of the court considering economic cases, and activity of an individual entrepreneur may be terminated in the order established by legislation of the Republic of Belarus.

Incomes received as a result of carrying out banking activities without a license to carry out banking activities and recovered in the established order are to be transferred to the national budget.

Article 134. Measures of supervisory reaction applied by the National Bank

Measures of supervisory reaction, applied by the National Bank are:

sending of a recommendation to eliminate the detected deficiency not being infringement (hereinafter - shortage) and/or action (omission), which could lead to a situation that threatens the safe operation of the Bank, and/or the interests of its depositors and other creditors, and/or the stability of the banking system, or to avoid such shortage and/or action (omission) in the future;

sending a recommendation on the performance (non-performance) of an action (omission) in order to prevent the emergence of conditions conducive to the violation, and/or a situation that threatens safe operation of the bank, and/or the interests of its depositors and other creditors, and/or the stability of the banking the system;

sending a binding proposal instructions to eliminate a detected violation, and/or to avoid it in the future, and/or to eliminate conditions conducive to the violation;

sending a binding proposal on performance (non-performance) of the action (omission) the duty on performance (non-performance) of which is provided by the legislative acts of the Republic of Belarus and/or the normative legal acts of the National Bank;

sending a binding proposal to suspend or exclude banking operations that expose a bank to a risk;

sending a binding proposal on alienation (in full or in part) of the stake in the authorized fund of a legal person and/or on the exclusion of another reason to exert a substantial influence, directly or indirectly (through third parties), on the decisions taken by the governing bodies of the legal person;

conducting a meeting with representatives of governing bodies of the bank and/or other persons to discuss the financial condition of the bank, level of exposures taken by it, quality of management, prospects of functioning, compliance with the requirements of the legislation of the Republic of Belarus and/or other matters related to the activities of the bank;

requesting a letter providing the duty to eliminate within a certain period of detected violation (shortage) and/or the action (omission) that could lead to a situation that threatens safe operation of the bank, and/or the interests of its depositors and other creditors, and/or stability of the banking system or to avoid such a shortage, and/or action (omission) in the future;

conducting an unscheduled inspection in accordance with the legislation governing the order of organization and conduct of inspections;

change of the set deadline, and/or frequency of reporting to the National Bank and/or the introduction of additional reports;

sending a written notice on the application of a measure of influence;

applying a measure of influence provided by Article 1341 of this Code.

Measures of supervisory reaction, indicated in part one of this Article, are applied by the National Bank in the following order:

those provided by indents two and three of part one of this Article – in respect of banks, persons recognized to make part of a bank group and/or bank holding, and shareholders possessing five percent and more of the banks shares;

those provided by indents four to nine of part one of this Article – in respect of banks and persons capable to exert a substantial influence, directly or indirectly (through third parties), on the decisions taken by the governing bodies of a bank and/or another legal person recognized to make part of a bank group and/or bank holding, and shareholders possessing five percent and more of the banks shares;

those provided by indent ten of part one of this Article – in accordance with the legislation of the Republic of Belarus governing the order of organization and conduct of inspections;

those provided by indent eleven of part one of this Article – in respect of banks and head organizations of bank groups and/or bank holdings;

those provided by indents twelve and thirteen of part one of this Article – in accordance with Article 1341 of this Code.

The decision of the National Bank on the application of a measure of supervisory reaction is taken on the basis of a reasoned judgment having regard to criteria determined by the National Bank.

The decision of the National Bank on the application of a measure of supervisory reaction may indicate the period of its application and/or the time limit required to eliminate a detected violation (shortage) and/or the action (omission) that could lead to a situation that threatens the safe operation of the bank, and/or the interests of its depositors and other creditors, and/or the stability of the banking system.

The National Bank is entitled to apply on the same ground simultaneously or consecutively several measures of influence and/or of supervisory reaction.

Additional requirements to the order of application by the National Bank of measures supervisory reaction are established by normative legal acts of the National Bank.

The decision of the National Bank on application of a measure of supervisory reaction may be appealed by a person to whom such a measure is applied, in the order established by the legislation of the Republic of Belarus. An appeal against the decision of the National Bank on the application of measures of supervisory reaction does not suspend execution of such a decision.

Article 1341. Measure of influence applied by the National Bank

In the cases stipulated by Article 97 of this Code, the National Bank is entitled to suspend or revoke the license to carry out banking activities, including in the part of carrying out certain banking operations.

In cases provided by the legislation on economic insolvency (bankruptcy), the National Bank is entitled to demand to take measures on improvement of a financial standing of a bank or its reorganization and/or appoint temporal administration for management of the bank.

In case of non-fulfillment by a bank of a binding proposal and/or decision of the National Bank on application of a measure of influence, and/or existence of losses according to the result of the banks annual activity, and/or non-compliance by the bank with licensing requirements provided by this Code, and/or detection of a violation (shortage) in the banks activity and/or its action (omission) that lead to the situation that threatens safe operation of the bank, and/or its interests of its depositors and other creditors, and/or stability of the banking system, the National Bank is entitled:

to introduce restrictions on carrying out by the bank of certain banking operations, and/or activities;

to demand from banks shareholders to take measures to increase the bank's regulatory capital to a size ensuring compliance with safe operation standard established by the National Bank;

to prohibit the distribution of profits among shareholders by declaring and/or payment of dividends;

to change for the bank established size of the safe operation standard and/or to establish an additional safe operation standard;

to increase for the bank the established size of the reserve fund, and/or the amount of deductions to it;

to introduce a ban on opening by the bank of affiliates and/or creation by the bank, its affiliate of structural divisions (including mobile ones) located outside the banks location, its affiliate and not having independent balance-sheet, and/or a ban on carrying out by the bank of banking operations on remote workplaces;

to require the removal from office of a member of the board of directors (supervisory board) and/or the collegiate executive body of the bank, the head and/or the chief accountant and/or their deputies;

to demand a repeat passing of the assessment of conformity with qualification requirements, and/or requirements to business reputation of a member of the board of directors (supervisory board) and/or the collegiate executive body of the bank, the head and/or the chief accountant and/or their deputies.

In the case of non-compliance by a shareholder of a bank with a binding proposal of the National Bank and/or the requirements for the founders, shareholders and other beneficial owners of the bank in accordance with this Code, and/or detection in the bank shareholders activity of a violation (shortage) and/or action (omission) that lead to the creation of a situation threatening the safe operation of the bank and/or interests of its depositors and other creditors, the National Bank is entitled:

to suspend the right of the shareholder, with the exception of the cases when shares belong to the Republic of Belarus and its administrative and territorial units, to participate in the governing bodies of the bank with the voting right in full or in accordance with the list of issues established by the National Bank;

to require a shareholder, with the exception of the cases when shares belong to the Republic of Belarus and its administrative and territorial units, to alienate (in full or in part) of banks shares. In this instance, if shares were not realized within the established period, that may not be less than three months, the shareholder must sell and the bank must buy such shares from him on their nominal value. Upon refusal of one of the parties, the other party and also the National Bank are entitled to appeal to the court with a claim to compel to the conclusion of the contract.

In case of non-fulfillment by a person recognized to be a part of a bank group and/or bank holding of a binding proposal and/or a decision of the National Bank on application of a measure of influence towards it, and/or violation of other requirements of the banking legislation, and/or detection in the activity of such person of a violation (shortage) and/or action (omission) leading to the creation of a situation threatening safe functioning of the bank recognized to be a part of the same bank group and/or bank holding, and/or interests of its depositors and other creditors, and/or stability of the bank system, as well as in case of noncompliance by a bank group and /or bank holding of safe operation standards established for bank groups and/or bank holdings, the National Bank is entitled:

to change for a bank group and /or a bank holding company established size of safe operation standard and /or to establish and additional safe operation standard;

to require from a person recognized to be a part of a bank group and /or a bank holding to alienate (full or partial) the stake in the authorized fund of a legal person recognized to be a part of the same bank group and /or a bank holding company, and/or to exclude another ground for exerting substantial influence, directly or indirectly (through third parties), on the decisions taken by the governing bodies of such a legal person.

Measures of influence may be applied by the National Bank, if since the day of violation that constituted the ground for their application, three years, or from the day of its detection – six months, have not expired.

Article 135. Liability of bank or non-bank credit and financial organization for damage to depositors and other creditors

A bank and a non-bank credit and financial organization are liable for non-fulfillment (improper fulfillment) of their obligations in compliance with legislation of the Republic of Belarus and having regard to the specifics provided by this Code.

A bank or a non-bank credit and financial organization are not liable for damage to depositors and other creditors by non-fulfillment (improper fulfillment) of their obligations thereto, if such non-fulfillment (improper fulfillment) has been caused by force majeure and also in the cases provided by part two of Article 136 of this Code.

Officials of a bank or non-bank credit and financial organization are liable for violation of the established procedure for concluding transactions, as established by the legislation of the Republic of Belarus.

If insolvency (bankruptcy) of a bank or a non-bank credit and financial organization has been prompted by its founders (participant, property owner) or other persons, including the head of the bank or non-bank credit and financial organization, who are authorized to issue instructions binding such bank or non-bank credit and financial organization or otherwise determine its activities, then, should the property of the bank or credit and financial organization be insufficient, subsidiary liability may be imposed on the said persons with respect to its obligations.

Article 136. Liability of the National Bank, banks, or non-bank credit and financial organizations for damage caused as a result of freezing of funds, blocking financial operations, suspension of operations on accounts, imposing arrest or levying execution on monetary means and other property, establishing other prohibitions (restrictions)

A bank or a non-bank credit and financial organization bear material liability for damage caused to customers of the bank or non-bank credit and financial organization in the case of imposing arrest on property of the bank or the non-bank credit and financial organization.

The National Bank, banks, and non-bank credit and financial organizations do not bear liability for damage caused as a result of freezing of funds, blocking financial operations, suspension of operations on accounts or levying execution on monetary means and other property of natural persons and legal persons, including levying execution on monetary means being carried out with conversion, buying, selling, effected on the basis of a decision (disposition, resolution) of an authorized state body or authorized organization (official), issued and forwarded to the bank in the established order, as well as a result of performing actions specified by part four of Article 22 of this Code.

SPECIAL PART

SECTION V
ACTIVE BANKING OPERATIONS

CHAPTER 18
BANK CREDIT

Article 137. Credit contract

Under a credit contract, a bank or a non-bank credit and financial organization (lender) undertakes to provide monetary means (credit) to another person (borrower) in the amount and on the terms determined by the contract, and the borrower undertakes to repay (reimburse) the credit and interest thereon. In doing so, the creditors are prohibited to charge any additional payments (commissions or other fees) for the use of credit.

Article 138. Determining the day of granting credit

The day of granting credit is considered the day when the amount of credit is credited to the borrower's account or transferred by a bank in payment of settlement documents presented by the borrower, or used in compliance with instructions of the borrower, or paid to the borrower in cash.

Article 139. Form of credit contract

A credit contract is concluded in written form, including by means of using systems of distance bank servicing.

In case of failure to observe a written form of a credit contract, such contract is null and void.

Article 140. Material conditions of credit contract

The material terms of a credit contract are terms concerning:

the sum of credit with indication of the credit currency (for a credit line, maximum amount of the monetary means granted to the borrower and the maximum limit of outstanding indebtedness of the borrower);

the term and procedure for granting and repayment (reimbursement) of the credit;

the interest on credit and procedure for payment thereof, with the exception of the cases of granting credit on preferential terms on the basis of decisions taken by the President of the Republic of Belarus or, in the established order, by the Government of the Republic of Belarus;

purposes for which the borrower undertakes to use or not to use granted monetary means (intended use of the credit), in the case stipulated by part two of Article 144 of this Code;

liability of the lender and the borrower for non-fulfillment of the obligations under the credit contract;

other and conditions to be agreed upon according to a declaration of one of the parties.

Article 1401. Right of the borrower to receive a document confirming the fact of credit contract conclusion

The borrower is entitled to demand, and the lender is obliged to provide, on demand of the borrower, on the day of the request, unless another period is established by the legislation of the Republic of Belarus and/or the contract, a document confirming the fact of conclusion of the credit contract, containing information on its material conditions, as well as other data relating to this contract - in the case of the credit contract by means of systems of remote banking servicing.

Article 141. Lender's refusal to enter into credit contract

A lender is entitled to refuse to conclude a credit contract if there is data evidencing that the amount of the credit extended to the borrower will not be repaid (reimbursed) on time, if the borrower fails to provide security for the fulfillment of the obligations under credit contract, if the court considering economic cases has taken decision on bankruptcy with liquidation (termination of activities) of the borrower, or if there are any other grounds which could influence the fulfillment by the borrower of the obligations under the credit contract or are provided for by the legislation of the Republic of Belarus.

The lender is entitled to refuse to fulfill the obligations under the credit contract if the borrower has not fulfilled its obligations under such contract.

Article 142. Borrower's refusal to receive credit

After a credit contract has been concluded, the borrower is entitled to refuse, unless otherwise stipulated by the legislation of the Republic of Belarus or the credit contract, to receive credit, in whole or in part, notifying the lender prior to the date of granting credit established in the contract.

Article 143. Early return (repayment) of credit

A credit may be repaid (reimbursed) before maturity, subject to the terms and conditions stipulated by the credit contract. In case if the credit contact does not provide for a repayment (reimbursement) of the credit before maturity, such credit may be repaid (reimbursed) before maturity only with the consent of the lender, with the exception of the case provided for by part nine of Article 150 of this Code.

When the borrower fails to fulfill (improperly fulfills) his obligations under the credit contract, the lender may demand repayment (reimbursement) of the credit before maturity.

Article 144. Intended use of credit

A credit contract may be concluded with the condition of intended use of the credit.

A credit contract stipulating granting credit against the guarantee of the Government of the Republic of Belarus, a guarantee (suretyship) of a local executive and administrative body must contain the condition of intended use of the credit.

If a credit contract has been concluded with the condition of intended use of the credit, the lender is obliged to ensure to the lender a possibility to control the intended use of the credit.

When the borrower fails to fulfill the condition of intended use of the credit of the credit contract and/or the duties stipulated by part three of this Article, the lender is entitled, unless otherwise stipulated by the credit contract, to demand the repayment (reimbursement) of the credit before maturity, payment of interest due and/or to refuse to further credit the borrower under this contract.

Article 145. Interest for using credit

The lender is obliged, prior to the conclusion of a credit contract, to bring to notice of each borrower the information on the interest rate for using credit.

The amount of interest for using credit may be determined:

in absolute numerical expression (fixed annual interest rate);

based on a calculated value associated linked to the base indicator, in the manner agreed by the parties at the conclusion of the credit contract (variable annual interest rate).

The lender does is not entitled to unilaterally increase the amount of interest for using the credit. The terms of the credit contract which allow the lender to increase the amount of interest for using the credit unilaterally, limit the rights of the borrower and are deemed to be null and void. An increase of the variable annual interest rate due to an increase in the base indicator is not a unilateral increase in the interest rate for using the loan.

The amount of interest for the use of a credit may be changed on the basis of a legislative act of the Republic of Belarus.

The lender determines, at the conclusion of a credit contract with a borrower, independently the amount, frequency of charging and periods of interest payment for using credit.

The parties are entitled to foresee in a credit contract the order under which the interest for using credit shall be paid in full on the day of repayment (reimbursement) of the credit or in equal parts during the period of repayment (reimbursement), unless otherwise provided by the President of the Republic of Belarus or, in the established order, by the Government of the Republic of Belarus.

Interest for using a credit is calculated in accordance with the terms of the credit contracts from the date of granting the credit to the day preceding the day of return (repayment) of the credit, inclusively or from the day following the day of granting the credit to the day of return (repayment) of the credit inclusively.

Payment of the interest for using credit on the day of granting a credit is not allowed.

The day of repayment (reimbursement) of a credit, payment of interest for using credit is deemed to be the day on which the means are credited to the account of the lender or paid to the lender in cash.

A borrower which fails to repay (reimburse) the credit on time is obliged to pay the interest at a higher rate, determined in the credit contract, during the period from the day following the day of repayment (reimbursement) until its full repayment (reimbursement), unless other rate is provided by the legislation of the Republic of Belarus.

When the means are not sufficient for the fulfillment of the obligations under a credit contract in full, in the first place the expenses of the bank relative to the fulfillment of the obligations are repaid, in the second place – the overdue indebtedness on the principal of the credit, overdue interest for using the credit, the principal debt of the credit for the current payment period, the interest debt for the use of the credit for the current payment period are repaid, in the third place – other obligations under the credit contract are fulfilled, unless otherwise provided by the President of the Republic of Belarus.

The credit contract may provide for the liability of the borrower for untimely late payment of the interest for using credit.

Article 146. Insurance by the lender of the risk of non-return (non-repayment) of credit and/or of delay of return (repayment) of credit

Under a contract of insurance of risk of non-repayment (non-reimbursement) and/or of untimely repayment (reimbursement) of credit, the insurance organization (insurer) undertakes to indemnify the insured (lender) against the damage caused to its material interests by non-repayment (non-reimbursement) and/or of untimely repayment (reimbursement) of credit. Under such contract, as the insured may act a bank or non-bank credit and financial organization being lenders.

Insurance premiums paid by the insurer (lender) under the insurance contract of non-repayment (non-repayment) risk and/or overdue return (repayment) of a credit are not payments for the use of the credit, may not be included in the interest rate for the use of the loan and be refunded by the borrower in the manner and time established by the contract between the borrower and the insured (lender).

Unless otherwise stipulated by the insurance contract, the insurer which has paid insurance compensation to the insured (lender) receives, within the limits of the paid compensation, the right of the insured (lender) to damage compensation (subrogation).

Article 147. Methods of securing fulfillment of obligations under credit contract

The fulfillment of obligations under a credit contract can be secured by a guarantee cash deposit, transfer of the legal title to property, including property rights, to the lender, pledge of movable and immovable property, suretyship, guarantee, and other methods stipulated by legislation of the Republic of Belarus or contract.

Article 148. Guarantee money deposit

To guarantee the fulfillment of obligations under a credit contract, a borrower or a third person may transfer means in Belarusian roubles or foreign currency to the lender. The interest is not charged on the guarantee cash deposit unless otherwise stipulated by the contract. Means transferable as a guarantee of fulfillment of obligations under the credit contract may be held in accounts opened by the lender. If the borrower fails to fulfill his obligations under the credit contract, the lender is entitled to satisfy his claims at the expense of deposited means.

If the credit currency is other than that of the guarantee cash deposit, the rate of conversion is determined by an agreement between the parties. If the parties fail to come to an agreement, the dispute on the conversion rate is to be decided in the court.

Articles 179 to 188 of this Code do not cover the guarantee cash deposit, unless otherwise stipulated by the contract.

Article 149. Transfer of legal title to property to lender

To secure the fulfillment of obligations under a credit contract, the legal title to the property belonging to the borrower or a third person on the right of ownership, on the right of economic management or on the right of operative administration, including to property rights, may, based on a separate contract, be transferred to the lender unless the right to the transfer of the legal title is restricted by the property owner or legislation of the Republic of Belarus.

The contract on the transfer of the legal title to the property, including to the property rights, must stipulate the right of the borrower to repurchase the property transferred to the lender by repaying the credit (right of redemption) within the time period for repayment (reimbursement) of the credit determined in the credit contract. The lender may not to alienate the property before the expiration of the time period for the exercise of the right to repurchase.

The transfer of the legal title to the property does not entails an obligatory delivery of the property unless otherwise stipulated by the contract. In the event when the property is to be delivered to the lender in accordance with terms and conditions of the contract on the transfer of the legal title to the property, the lender is obliged to possess, use and dispose of the property within the limits determined by the contract on the transfer of the legal title to the property.

The lenders obtains the right of ownership, the right of economic management or the right of operative administration of the property, including to the property rights, if the borrower fails to repay (reimburse) the credit within time period established by the credit contract. When the value of the property specified in the contract on the transfer of the legal title to the property exceeds the amount of claims of the lender under the credit contract, the lender is obliged to pay the difference within the time period established by such contract.

Relationships between the borrower and the lender under the contract on the transfer of the legal title to the property, including to the property rights, which are not regulated by this Article are regulated by norms of legislation of the Republic of Belarus on a purchase/sale contract. In cases stipulated by legislation of the Republic of Belarus, contracts providing for the transfer of a legal title the property, including to the property rights, are subject to state registration in the manner prescribed by purchase/sale contracts.

Article 150. Specific features of crediting natural persons

Credit to natural persons shall be granted in Belarusian rubles.

When concluding a credit contract with a natural person with the provision by the lender and/or third parties of additional paid services, the following requirements should be observed:

if it is necessary to conclude insurance contracts and/or to conduct assessment of the value of civil rights objects in order to secure the fulfillment of obligations under the credit contract, the lender is not entitled to restrict the applicant (pledger ) in choosing an insurance organization and/or assessment performer. At the same time, banks are entitled to establish criteria for the admissibility of assessing the value of civil rights objects in their local normative legal acts, taking into account the need to comply with the standards of safe operation, the interests of the borrower and non-discrimination of the assessment performer;

an individual in written form, including by means of using remote banking services systems, without charge of remuneration (fees) is provided with information about the cost of additional paid services offered by the lender being rendered by it and/or third parties;

mandatory provision of information on credit conditions before concluding a credit contract a natural person and consideration of an application for granting the credit and other documents for obtaining the credit are carried out free of charge (fees);

information on credit conditions indicates the total sum of payments to be included in the credit contract, due to be paid when the borrower properly fulfills the conditions of the credit (amount of credit, sum of interest for the entire period of use of the credit, calculated on the date of providing information, as well as the cost of additional paid services, if they are provided for by the credit contract).

An individual is entitled to agree or refuse to being provided with additional paid services, including the provision of such services through conclusion of other contracts with the lender and/or third parties, in order to conclude a credit contract. With the prior consent of the natural person expressed in a written form, including through the use of remote banking services systems, the conditions for the provision of additional paid services or the obligation to conclude other contracts are included in the credit contract.

If a natural person refuses to being provided additional paid services, including the provision of such services by concluding other contracts with the lender and/or third parties, the lender is obliged, with a view of concluding a credit contract, to offer the given person a credit identical in the sum and duration.

In the absence of the prior consent of the natural person provided for by part three of this Article, the conditions of the credit contract on providing additional paid services by the lender and/or third persons are deemed to be null and void.

The credit contract shall establish a procedure for providing and returning (repayment) of the credit with indication of possible methods for its providing and returning (repayment). Without charging a remuneration (fee), at least one of the methods of providing and returning (repayment) of the credit must be carried out.

If the terms of the credit contract provide for opening to the borrower - natural person of a current (settlement) bank account, then opening and crediting the sum of credit to it shall be carried out by the lender without charging a remuneration (fee).

It is allowed to include in the credit contract a reference norm to tariffs (collections of remunerations, fees, etc., approved by a local normative legal act of the bank) only on condition that the value of the additional paid service is indicated in the credit contract at the date of conclusion of the contract.

The borrower - natural person has the right to return (repay) prematurely a credit for consumer needs in full or in part with interest paid for the period of using the credit, without prior notification to the lender. In this case, the collection of a penalty fee (fine, penalty interest), other types of penalties for early return (repayment) of the credit is not allowed.

The borrower - natural person is entitled to receive upon request, including through the use of systems of remote banking services, at least once a month, without paying the lender remuneration (fees), information on the indebtedness under the credit contract in the order and time limits established by the contract. This information must include information on the sum of indebtedness under the credit contract in the part of the principal sum of the debt on credit, interest for using it, as well as in the part of overdue indebtedness on the principal sum of the credit, interest for using it, other obligations (if available).

The lender is obliged to notify, without charging a remuneration (fee), the borrower - natural person, including through the use of distance banking systems, about the formation of overdue indebtedness under the credit contract, not later than thirty days from the day of its formation, and the guarantor - not later than sixty days from the day of its formation in the manner established by the credit contract.

Article 151. Line of credit

When opening a line of credit, the borrower has the right, in accordance with the credit contract, to obtain and use credit during a determined time period within an established maximum amount (limit) of the credit subject to compliance with the maximum amount (limit) of outstanding indebtedness on the credit.

Article 152. Inter-bank credit contract

An inter-bank credit contract means a credit contract which establishes relations between banks with respect to mutual lending the specifics of which are determined by the National Bank.

Unless otherwise stipulated by the National Bank or credit contract, the provisions of this Chapter relating to methods of securing the fulfillment of obligations and form of the credit contract are not applied to an inter-bank credit contract.

CHAPTER 19
FINANCING AGAINST MONETARY CLAIM ASSIGNMENT (FACTORING)

Article 153. Financing against monetary claim assignment (factoring)

Financing against the monetary claim assignment (factoring) is carried out by concluding a financing contract against monetary claim assignment (hereinafter – the factoring contract) or performing factoring operations.

Article 1531. Factoring contract

Under a factoring contract, one party (factor) – bank or non-bank credit and financial organization undertakes for the other party (parties) – creditor or creditor and debtor to enter into the monetary obligation between the creditor and the debtor by means of payment to the creditor of the sum of the debtors monetary obligation for remuneration.

The monetary obligation may be assigned by the creditor to the factor also for the purposes of securing the fulfillment of the obligations of the creditor before the factor.

Remuneration to the factor shall be paid by the creditor (debtor) in the form of a discount (difference between the amount of the debtors monetary obligation and the sum payable to the creditor) and/or in other forms determined by contract of factoring.

The size of the remuneration and the method of its calculation and the order of payment procedures are determined by the factoring contract. Factoring contract terms may additionally provide for other types of remuneration charged by the factor for rendering other financial services related to the monetary claims being the object of assignment.

Article 154. Classification of factoring contracts

Under a factoring contract:

the debtor may be notified of the conclusion of the factoring contract under which creditors rights have been transferred to the factor (open factoring);

the debtor may be not notified of the conclusion of the factoring contract under which creditors rights have been transferred to the factor (confidential factoring).

Factoring contracts may be classified as to:

place of factoring: domestic if parties to a factoring contract are residents, international if one of the parties to a factoring contract is non-resident;

terms of payment: contracts without recourse when the factor bears the risk on non-payment of monetary claims by the debtor; with recourse when the creditor bears the risk of non-payment of monetary claims by the debtor.

Article 1541. Factoring operations

When performing factoring operations, banks or non-bank credit and financial organizations – residents, on a transaction involving the assignment of a monetary claim (factor), may acquire from non- residents monetary claims received by the latter under factoring contracts (other similar contracts of assignment of monetary claims (accounts receivable)), including from non-residents (lender or factor).

The relations arising when performing a factoring operation are governed by the rules established by part three of Article 1531 and Articles 155162 of this Code, unless otherwise provided by an agreement of the parties or follows from the essence of the operation.

Article 155. Subject of assignment under factoring contract

A subject of assignment under a factoring contract may be both a matured monetary claim (existing monetary claim) and monetary claim that will mature in the future (future monetary claim).

When a future monetary claim has been assigned, the factor is entitled to demand its fulfillment only upon maturity of such a claim. At that, if the maturity is subject to a specific circumstance (event), the factor is entitled to demand the fulfillment of the assigned monetary claim only upon the occurrence of such circumstance (event).

For cases stipulated in part two of this Article, no additional formalization of the monetary claim assignment is required.

The monetary claim that is the subject of the assignment must be determined by the factoring contract so that the existing monetary claim can be identified at the time of the conclusion of the contract, and the future monetary claim – not later than at the moment of its occurrence. For identification of a future monetary claim, the factoring contract may indicate the name of the debtor and the details of the document on the basis of which such monetary claim will arise.

Article 156. Fulfillment of monetary claim by debtor

The debtor not being a party of the factoring contract is obliged to fulfill monetary claim to the factor provided that he has received a written notification from the factor of the assignment of the monetary claim with indication of the monetary claim to be fulfilled, identified according to the contract, as well as the bank or non-bank credit and financial organization acting as factor.

The fulfillment of the monetary claim by the debtor to the factor is deemed the fulfillment to an appropriate creditor and exempts the debtor from the fulfillment of the corresponding obligation before the creditor.

After sending a notification to the debtor about the assignment of a monetary claim to the factor, the creditor is not entitled to withdraw such notification without the prior consent of the factor.

From the moment of the conclusion of the factoring contract, the creditor and the debtor are not entitled to change or terminate, without the consent of the factor, existing or future monetary claims that are the subject of the assignment under the factoring contract.

Article 157. Agreement on prohibiting (limiting) assignment of monetary claim

Assignment of monetary claims to the factor is valid even if there is an agreement between the creditor and the debtor on prohibiting (limiting) the assignment.

The provision of part one of this Article does not exempt the creditor which has breached the agreement on prohibiting (limiting) the assignment of monetary claim from obligations or liability before the debtor in connection with such assignment.

Article 158. Subsequent assignment of monetary claim

Unless otherwise stipulated by a factoring contract, subsequent assignment of monetary claim by the factor is not allowed.

If subsequent assignment of a monetary claim is permitted by the factoring contract, and the monetary claim has been assigned to a bank or non-bank credit and financial organization, relationships of the parties are regulated by the provisions of this Chapter.

Article 159. Rights of factor to monetary obligation sum paid by debtor

The factor obtains rights to the whole sum of monetary obligation paid by the debtor under the assigned monetary claim, with exception of the case stipulated by part two o this Article.

If the monetary claim towards the debtor has been assigned by the creditor with a view of securing the fulfillment of its obligation to the factor and otherwise not stipulated by the factoring contract, the factor is obliged to present a report to the creditor and pass on to him the sum of monetary obligation in part exceeding the sum of obligations of the creditor before the factor, secured by the assignment of the claim.

Article 160. Counterclaims of debtor against claims of factor

The debtor is entitled to raise for the set-off against the claims of the factor monetary claims based on the contract with the creditor which were available to the debtor by the time written notification of the assignment was received by the debtor and which matured before the receipt of the notification or the maturity of which has been not determined or determined as on call.

The set off of the claims of the debtor based on the breach, by the creditor, of an agreement prohibiting (limiting) assignment of the monetary claim is not allowed.

Article 161. Repayment to debtor of monetary obligation sum paid to factor

Where a creditor violates his obligations under a contract concluded with a debtor, the debtor is not entitled to demand repayment of the monetary obligation sum paid to the factor under the assigned monetary claim, provided the debtor is entitled to receive such sum directly from the creditor, except where the factor fails to provide the creditor with the sum of the monetary obligation related to the assignment of monetary claim.

Article 162. Creditor's liability to factor

The creditor is obliged to prove validity of the assigned monetary claim by documents evidencing his claim to the debtor and bears the liability before the factor for the validity of the assigned monetary claim.

Assigned monetary claim is deemed to be valid if the creditor has the right to assign it and at the moment of assignment he is not aware of any circumstances based on which the debtor is entitled not to fulfill such claim.

The lender is not responsible for non-fulfillment or improper fulfillment by the debtor of the monetary claim that is the subject of the assignment, except in cases of invalidity of the assigned monetary claim and other cases stipulated by the factoring contract when the factor acquires the right of recourse (regress) to the creditor.

Under a factoring contract without recourse, the creditor is not liable for the non-fulfillment ( undue fulfillment) by the debtor of the assigned monetary claim.

Under a factoring contract with recourse, the factor is entitled to raise before the creditor the demand on reimbursement of:

the sum of monetary obligation not paid by the debtor and losses incurred in the case when the debtor has not paid to the factor the monetary obligation sum due to the latter under the assigned monetary claim or the paid sum is less than the sum due;

losses incurred in the case when the debtor has delayed the payment to the factor of the monetary obligation sum due to the latter under the assigned monetary claim.

Article 163. Hidden factoring

Under an undisclosed factoring contract, the fulfillment by the debtor of the monetary claim to the creditor is considered the fulfillment to an appropriate creditor.

Relationships under an undisclosed factoring contract are regulated by the rules of factoring specified in Articles 1531, 155, and 157 to 162 of this Code, unless otherwise stipulated by the contract or follows from the nature of the transaction.

CHAPTER 20
BANK GUARANTEE. SURETYSHIP