National Payment System Act  2014

Link to law: http://www.palemene.ws/new/wp-content/uploads/01.Acts/Acts%202014/National-Payment-System-Act-2014-Eng.pdf
Published: 2014

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now
rangement of Provisions
PART 1
PRELIMINARY

1. Short title and commencement
2. Interpretation
3. Application
PART 2
POWERS AND DUTIES OF
THE CENTRAL BANK

4. General powers
5. Operational role of the
Central Bank
6. Cooperation with other
authorities
7. National Payment System
Committee

PART 3
LICENSING OF SERVICES
AND SYSTEMS

8. Prohibition
9. Power to issue licence
10. Application for licence
11. Registration instead of licence
12. Licences non-transferable
13. Renewal of licence
14. Conditions of licence
15. Right to be heard
PART 4
OVERSIGHT

16. Standards, criteria and
directives
17. Power to enter and inspect
18. Rules of systems
19. Access to systems
20. Outsourcing of activities
21. Agents
22. Liability for acts of agents,
employees, etc.
23. Legislation on anti-money
laundering or terrorist
financing
24. Retention of records
25. Access to information and
disclosure
26. Fees and charges

PART 5
SETTLEMENT, NETTING
AND FINALITY OF
PAYMENT

27. Settlement of accounts
28. Finality of payment
29. Collateral for payment and
settlement obligation



2 National Payment System 2014, No. 4
PART 6
WINDING-UP AND
ADMINISTRATION

30. Central Bank to be notified of
winding-up
31. Prohibition
32. Winding-up or administration
of participant not to affect
finality
33. Rules of the Central Bank and
licensed systems to bind
liquidators
34. Preservation of rights
35. Conflict of laws

PART 7
CHEQUES, ELECTRONIC
FUND TRANSFERS AND
ELECTRONIC MONEY

36. Cheque truncation and
electronic cheque image
presentment
37. Powers of Central Bank
38. Customers to be notified on
fees
39. Terms of transfers
40. Issuance of electronic money

PART 8
MISCELLANEOUS

41. Administrative penalties
42. Offences
43. Settlement of disputes
44. Exemption from liability
45. Regulations and directives
46. Saving and transition

__________

2014, No. 4

AN ACT to regulate a national payment system and for
related purposes. [7th
April 2014]

BE IT ENACTED by the Legislative Assembly of Samoa in
Parliament assembled as follows:

PART 1
PRELIMINARY

1. Short title and commencement-(1) This Act may be cited
as the National Payment System Act 2014.
(2) This Act commences on the date of assent by the Head of
State.



2014, No. 4 National Payment System 3

2. Interpretation - In this Act, unless the context otherwise
requires:
“bank” has the same meaning in the Central Bank of Samoa
Act 1984;
“Central Bank” means the Central Bank of Samoa established
under the Central Bank of Samoa Act 1984;
“central counter-party” means an entity that is the buyer to a
seller and the seller to a buyer in a settlement system;
“central securities depositary”:
(a) means an entity -
(i) in whose register securities are
immobilised, and enabling securities
transactions to be finally processed by book-
entry (securities can be held either in
electronic or physical form); and
(ii) that can provide custodial and asset
services; and
(b) includes the Central Bank.
“cheque in the electronic form” means a cheque which
contains digital representation of the front and back of a
paper cheque (cheque image), and is generated, written
and signed in a secure system ensuring minimum safety
standards, as specified by the Central Bank or any other
authority;
“clearing”:
(a) means the process of transmitting, reconciling or
confirming funds or securities transfer instructions
prior to settlement; and
(b) includes the netting of instructions and the
establishment of final positions for settlement.
“clearing house”:
(a) means an entity that provides clearing or settlement
services for a system; and
(b) includes the Central Bank.
“clearing system”:
(a) means a set of procedures whereby participants
present and exchange information relating
to the transfer of funds or securities to other



4 National Payment System 2014, No. 4

participants through a centralised system or at a
single location; and
(b) includes mechanisms for the calculation of
participants’ positions on a bilateral or multilateral
basis with a view to facilitating the settlement of
their obligations.
“close-out netting” means a netting arrangement under which,
following the occurrence of certain events specified by
the parties to the arrangement, all or any of the
transactions referred to in the netting arrangement may be
terminated, and if so terminated the termination value
becomes due and payable;
“collateral” means an asset that is delivered by the collateral
provider to secure an obligation to the collateral taker,
that may take different legal forms, such as title transfer
or pledge;
“Committee” means the National Payment System
Committee established by section 7;
“credit card” means a card that authorises the person named
on it to charge goods or services to the account of an
account holder on credit basis subject to repayment over a
period of time;
“credit transfer”:
(a) means the series of transfers, beginning with the
payer’s payment order, made for the purpose of
making payment to the payee; and
(b) includes any payment order issued by the payer’s bank
or payment service provider, or an intermediary
intended to carry out the payer’s payment order.
“debit card” means a card or an access method by which
money is automatically deducted from an account to pay
for goods or services purchased;
“debit transfer”:
(a) means a series of transfers, initiated by the payee, on
the basis of the payer’s consent given to the payee,
to the payee payment service provider or to the
payer own payment service provider; and



2014, No. 4 National Payment System 5

(b) includes a payment order issued by the payee’s bank
or payment service provider, or an intermediary
intended to carry out the payee’s order.
“directives” means any directives, orders or guidelines issued
under section 45(2);
“electronic money” means electronically, including
magnetically or in any other tangible or intangible device
(such as a subscriber identity module (SIM) card or a
software), stored monetary value as represented by a
claim on the issuer, which is issued on receipt of funds for
the purpose of making payment transactions and which is
accepted as a means of payment by persons other than the
issuer;
“electronic presentment of cheques” means the electronic
transmission, by an institution authorised to draw a
cheque, of an image and payment information of the
cheque, to the payee institution on whom it is drawn;
“electronic funds transfer”:
(a) means any transfer of funds which is initiated by a
person by way of instruction, authorisation or
order to a bank to debit or credit an account
maintained with that bank through electronic
means; and
(b) includes point of sale transfers, automated teller
machine transactions, direct deposits or
withdrawal of funds, transfers initiated by
telephone, internet, card or other devices.
“financial institution” has the same meaning as “non-bank
person or institution” as defined in the Financial
Institutions Act 1996;
“gross settlement” means the settlement of funds or securities
transfer instructions that occurs individually on an
instruction-by-instruction basis;
“licence”:
(a) means a licence granted under Part 3; and
(b) includes a bank when providing payment services; and
(c) “licensee” has a corresponding meaning.



6 National Payment System 2014, No. 4

“multilateral netting” means an arrangement among three (3)
or more parties to net their obligations;
“National Payment System” means the whole of the services
that are associated to sending, receiving and processing of
orders of payment or transfers of money in domestic or
foreign currencies, issuance and management of payment
instruments, payment, clearing and settlement systems,
including:
(a) those processing securities, arrangements and
procedures associated to those systems and
services, and payment service providers; or
(b) system operators, participants, and any third party
acting on behalf of them, either as an agent or by
way of outsourcing agreements, whether entirely
or partially operating inside Samoa.
“net settlement” means a settlement procedure in which final
settlement of transfer instructions occurs on a net basis at
one or more discrete, pre-specified times during the
processing day;
“net termination value” means the net amount obtained after
setting off or otherwise netting the obligations between
the parties in accordance with settlement rules issued by
the Central Bank or a netting arrangement entered into
between the parties;
“netting” means the determination of the net payment
obligations or the determination of the net termination
value of settlement obligations between two (2) or more
system participants within a system;
“netting arrangement”:
(a) means an arrangement in writing to convert several
claims or obligations into one (1) net claim or one
(1) net obligation; and
(b) includes any or more of the following -
(i) bilateral netting;
(ii) multilateral netting;
(iii) netting by novation;
(iv) close-out netting;
(v) payments netting.



2014, No. 4 National Payment System 7

“netting by novation” means a netting arrangement of the
parties to a series of transactions where an account of
amounts due is kept and the rights and obligations of the
parties to the account are continuously extinguished and
replaced by a new single amount payable by one (1) party
to the other;
“operator” means the Central Bank or a licensee of a system;
“participant” means a party to a system who is recognised in
the rules of a system as eligible to exchange, clear and
settle through the system with other participants either
directly or indirectly (a direct participant is a participant
in a system who is responsible for the settlement of its
own payments, those of its customers and those of the
indirect participants on whose behalf it is settling);
“payment card”:
(a) means a card, coupon book, or other device, including
a code or any other means of access to an account,
that may be used to obtain money or to make
payment; and
(b) includes a debit card, credit card or stored-value card.
“payment instrument”:
(a) means an instrument, whether tangible or intangible,
that enables a person to obtain money, goods or
services or to make payment or transfer money;
and
(b) includes, but not limited to, cheques, funds transfers
initiated by a paper or paperless device (such as
automated teller machines, points of sale, internet,
telephone, mobiles), payment cards, including
those involving storage of electronic money.
“payment services provider” or “provider” means an entity
licensed to provide payment services;
“payment services”:
(a) means services enabling -
(i) cash deposits and withdrawals;
(ii) execution of payment transactions;


8 National Payment System 2014, No. 4

(iii) issuing or acquisition of payment
instruments;
(iv) the provision of remittance services;
(v) any other services functional to transfer
money; and
(b) includes the issuance of electronic money and
electronic money instruments; but
(c) does not include solely online or telecommunication
services or network access.
“payment system” means a system or arrangement to process,
clear or settle funds;
“real-time gross settlement” means a settlement that effects
final settlement of funds, payment obligations and book
entry of securities and instruments on a real-time
transaction-by-transaction basis as they occur during
operating hours in a processing day;
“remittance service” means a financial service that accepts
cash or other payment instruments (including e-money
instruments) in one (1) location and pays a corresponding
sum in cash or other form to a beneficiary in another
location by means of a communication, a message,
transfer or through a clearing network to which the money
transfer service belongs;
“settlement” means the act of discharging obligations by
transferring funds or securities between two (2) or more
parties;
“settlement agent” means a company providing accounts for
participants to hold funds and to settle transactions
between participants;
“settlement rules”:
(a) means the rules, however established, that provide the
basis upon which payment obligations are
calculated, netted or settled; and
(b) includes -
(i) rules for the taking of action if a
participant is unable or likely to become
unable to meet its obligations to a payments
system, clearing house, central counter-party
or other participants; and


2014, No. 4 National Payment System 9

(ii) settlement of obligations from
securities.
“settlement system” means a system established and operated
by the Central Bank or any other system for the discharge
of payment obligations as well as of settlement of
obligations in securities;
“systemic risk” means the risk that relates to the inability of a
participant to meet its obligations in a system as the
obligation become due or a disruption to the system that
could, for whatever reason, cause other participants to be
unable to meet their obligations as they become due;
“truncation” means a settlement process in which the physical
transfer of a paper based payment instrument is
substituted by the exchange and storage of its image and
the corresponding electronic information;
“truncated cheque” means a cheque which is truncated during
the course of a clearing cycle by a clearing house whether
paying or receiving payment, immediately on generation
of an electronic image for transmission, substituting the
further physical movement of the cheque in writing.

3. Application - This Act applies to a system that operates
partly in Samoa and partly in another country.

PART 2
POWERS AND DUTIES OF
THE CENTRAL BANK

4. General powers-(1) Without affecting its powers under
the Central Bank of Samoa Act 1984, the Central Bank has the
power to regulate and oversee the National Payment System for
the purposes of this Act.
(2) For the purposes of subsection (1), the Central Bank has
the following powers:
(a) to formulate, monitor and review policies on the
National Payment System;



10 National Payment System 2014, No. 4

(b) to license payment services providers and operators of
systems pursuant to this Act and any further
implementing measure;
(c) to determine general or individual conditions,
standards, rules or procedures under this Act and
any further implementing measure regarding a
licensee and its activities and to ensure that
conditions, standards, rules or procedures are
applied;
(d) to act as a forum to consider any policy and mutual
interest about the National Payment System;
(e) to perform other functions on payment, clearing or
settlement systems or issuing of payment
instruments.

5. Operational role of the Central Bank-(1) The Central
Bank may provide facilities for payment, clearing and settlement
systems, their operators or their participants.
(2) For the purposes of subsection (1), the Central Bank may:
(a) establish, own, operate or participate in the ownership
or operation of payment and clearing and
settlement systems;
(b) act as a central counter-party to participants;
(c) hold cash accounts for operators and participants,
which may be used for the clearing and settlement
of transfers into a system;
(d) hold securities on accounts for operators and
participants, which may be used for the working
of systems;
(e) extend intra-day credit, as determined by the Central
Bank, to entities that are participating in payment,
clearing and settlement systems (and as such,
adequate collateral must be granted to the Central
Bank); and
(f) act as a central securities depositary.




2014, No. 4 National Payment System 11

6. Cooperation with other authorities-(1) The Central Bank
may:
(a) cooperate with other public authorities engaged in the
regulation and supervision of financial institutions
and other entities directly or indirectly involved in
payment services and financial institutions
operation in Samoa; and
(b) cooperate with other monetary authorities or
international organisations dealing with regulation
or oversight of payments.
(2) For the purposes of subsection (1), the Central Bank may
conclude memoranda of understanding.

7. National Payment System Committee-(1) The Central
Bank may establish a National Payment System Committee
pursuant to subsection (3).
(2) The objective of the Committee is to advise the Central
Bank on the following:
(a) the regulation and oversight of the National Payment
System;
(b) on the operational and technical standards;
(c) any other matters affecting payment services and the
clearing and settlement of payments and
securities.
(3) The Central Bank may, by directives:
(a) set out the composition and number of members of the
Committee;
(b) establish the charter of the Committee and its scope of
activities;
(c) any other matter to give effect to or for the purpose of
this section. (4) The Committee must:
(a) provide for the establishment and the terms of any
advisory sub-committee or working group to deal
with various aspects of the National Payment
System;
(b) enable the Central Bank, when discharging its
responsibilities, to adequately monitor the affairs
of licensees and participants;


12 National Payment System 2014, No. 4

(c) support the working of the Central Bank by promoting
appropriate contractual and other general
measures by the market.

PART 3
LICENSING OF SERVICES AND SYSTEMS

8. Prohibition-(1) A person must not provide payment
services or operate a system unless the person is licensed under
this Part.
(2) A bank providing payment services under the Financial
Institutions Act 1996 is not required to obtain a licence to provide
payment services or issue new payment instruments under this
Act.
(3) However, a bank must:
(a) comply with operational, reporting and disclosure
requirements set by directives;
(b) be subject to oversight requirements for licensees;
(c) obtain a licence to operate a system.
(4) A person who contravenes subsection (1) or a bank that
contravenes subsection (3) commits an offence and is liable to a
fine not exceeding 100 penalty units.

9. Power to issue licence-(1) The Central Bank may, with or
without conditions, grant a licence under this Part authorising the
licensee to provide payment services or to operate a system under
this Act.
(2) The power under subsection (1) includes the power to
vary, suspend or revoke the licence.

10. Application for licence-(1) A person may apply in
writing to the Central Bank for a licence under this Part,
accompanied by the application fee.
(2) Before a licence is granted, the Central Bank:
(a) may require the applicant to maintain capital adequacy
at levels specified by the Central Bank to be
determined by the type of service, average value
of payments, aggregate value and other factors as
the Central Bank considers necessary;


2014, No. 4 National Payment System 13

(b) must take into account section 40.

11. Registration instead of licence-(1) The Central Bank
may register the applicant for offering of payment instruments
instead of granting a licence if the management of a specific
category of payment instruments does not involve specific risks
for the market or would strongly compromise competitiveness.
(2) The registration must not discriminate among payment
services providers offering the same instrument.

12. Licences non-transferable-(1) A licence or any right
acquired under the licence, whether wholly or partly, must not be
transferred to another person except as provided by directives.
(2) A licence or right transferred in contravention of
subsection (1) is void.

13. Renewal of licence - A licence may be renewed in any
manner and subject to payment of renewal fees or other payments
approved by the Central Bank in a directive.

14. Conditions of licence - The Central Bank may, on its
own initiative or application by the licensee, vary, amend,
suspend or cancel any or impose new, condition of a licence.

15. Right to be heard-(1) If the Central Bank intends, on its
own initiative, to suspend or revoke a licence or to exercise a
power under section 14, the Bank must serve a notice on the
licensee informing the licensee of the reasons for the proposed
suspension or revocation or exercise of power and providing the
licensee with at least 10 days within which to provide comments.
(2) When any comments are received, the Central Bank must
take into account the comments when making its decision.
(3) As an exception to subsection (1), if the Central Bank has
reason to believe that there would be systemic risk arising out of
a breach, the Central Bank must immediately suspend the licence
and serve a notice required under subsection (1).



14 National Payment System 2014, No. 4
PART 4
OVERSIGHT
16. Standards, criteria and directives-(1) The Central Bank
may issue directives:
(a) to adopt general standards and criteria for the conduct
of payment services activities or the operation of
systems, either generally addressing the totality of
entities or a specific category; or
(b) to licensees on the governance, management,
operations, relations with customers, and relations
with systems; or
(c) on any other matter for the efficient administration of
this Act.
(2) The Central Bank must, at least 15 days before
commencement of directives, publish the directives in the Savali.
(3) The directives:
(a) commence on the date of publication in the Savali or
on a later date as the Central Bank may specify in
the directives; and
(b) may also be published in the Central Bank’s website
and a newspaper having wide circulation in
Samoa.

17. Power to enter and inspect-(1) The Central Bank may,
where it is of the opinion that it is necessary for the purposes of
carrying out its functions and duties under this Act, enter and
inspect or examine any of the following, with or without any
prior written notice:
(a) any business premises, apparatus, equipment or
machinery;
(b) any books, documents, accounts or transactions of a
payment system participant;
(c) an authorised operator or issuer of payment
instruments;
(d) any offices of the participant, operator or issuer.



2014, No. 4 National Payment System 15

(2) Without limiting subsection (1), the Central Bank may
apply to a judge of a District Court for a warrant to enter
premises.

18. Rules of systems-(1) An operator must issue the
following rules:
(a) rules for the governance, management and operations
of its system;
(b) minimum rules on management of liquidity, credit and
settlement risk;
(c) rules determining the time when a payment instruction
and a settlement is final;
(d) rules on corporate governance, access, contingency
arrangements and operational risk, rights and
liabilities of participants and the system operator.
(2) The rules must comply with this Act and any directives.
(3) The Central Bank may amend, suspend or revoke any
rules issued under subsection (1) if it considers appropriate to do
so, having regard to any of the following:
(a) whether the variation or revocation would be in the
public interest;
(b) the interests of the current participants;
(c) the interests of persons who, in the future, may desire
access to the system;
(d) any other matters the Central Bank considers relevant.
(4) An operator may not change the structure, operation or
administration of its system unless:
(a) the Central Bank has approved the change; and
(b) the operator gives notice of at least 30 days to the
participants after the approval of the Central Bank.
(5) As an exception to subsection (2), the Central Bank may
approve the change in the interest of monetary policy, financial
stability, or the public interest, subject to any of the following
condition:
(a) the notice under subsection (4)(b) is not required to be
given; or



16 National Payment System 2014, No. 4

(b) the notice is to be given for a period of less than 30
days.
(6) Directives:
(a) may be issued on any matter in this section; and
(b) prevail if a rule conflicts with the directives.

19. Access to systems - The rules on access to systems:
(a) are to be objective, non-discriminatory and
proportionate; and
(b) must not inhibit access more than is necessary to
safeguard against settlement risk, operational risk,
business risk or other risk and to protect the
financial and operational stability of the payment
system.

20. Outsourcing of activities-(1) A licensee who intends to
outsource its operational functions must, in writing, inform the
Central Bank.
(2) Outsourcing of important operational functions may not
be undertaken in such a way as to impair materially the quality of
internal control of the licensee and the ability of the Central Bank
to monitor the licensee’s compliance with the licensee’s
obligations under this Act.
(3) In subsection (2), an operational function is important if a
defect or failure in its performance would materially impair:
(a) the continuing compliance of the licensee with the
requirements of its licence; or
(b) the licensee’s financial performance, or the soundness
or the continuity of its services.
(4) The Central Bank must ensure that the outsourcing
complies with the following conditions:
(a) the outsourcing will not result in the delegation by
senior management of its responsibility;
(b) the relationship and obligations of the issuer towards
the users of any relevant payment instrument are
not to be altered;
(c) the conditions with which the licensee is to comply
with the licence are not to be undermined; and



2014, No. 4 National Payment System 17

(d) no other condition of the licence is to be amended,
suspended or revoked.

21. Agents-(1) A person who intends to provide payment
services, in particular when linked to a payment instrument, to
customers through an agent must communicate the following
information to the Central Bank:
(a) the name and address of the agent;
(b) a description of the internal control mechanisms that
will be used by agents in order to comply with the
obligations in relation to money laundering and
terrorist financing; and
(c) the identity of directors and persons responsible for
the management of the agent to be used in the
provision of the services and evidence that the
directors are fit and proper persons.
(2) When the Central Bank receives the information under
subsection (1), the Bank:
(a) if, before listing the agent in the register, it considers
that the information provided is incorrect, may
take further action to verify the information;
(b) if, after taking action to verify the information, not
satisfied that the information provided under
subsection (1) or paragraph (a) is correct, must
refuse to list the agent in the register;
(c) if satisfied that the information provided under
subsection (1) or paragraph (a) is correct, must list
the agent in a register.
(3) An agent must not carry out an activity under the agency
before being listed in the register.
(4) The principal must ensure that its agent informs customers
about the agency and the principal.
(5) The register must be available to the public for inspection. 22. Liability for acts of agents, employees, etc.-(1) A
licensee who relies on third parties to perform its operational
functions must take reasonable steps to ensure that the third
party complies with this Act.


18 National Payment System 2014, No. 4

(2) A licensee is liable for the acts of its employee, agent,
branch or entity to which activities are outsourced.

23. Legislation on anti-money laundering or terrorist
financing-(1) A licensee must comply with:
(a) legislation on anti-money laundering and terrorist
financing; and
(b) any directives on paragraph (a).
(2) The licensee must ensure that a third party acting on the
licensee’s behalf or the licensee’s employees or agents comply
with subsection (1).

24. Retention of records-(1) The Central Bank (for its
operational functions), a participant or a licensee must retain all
records obtained during the course of its operations and
administration for seven (7) years from the date of creating the
records.
(2) Records under subsection (1) may be retained by
electronic means under the Electronic Transactions Act 2008.

25. Access to information and disclosure-(1) A licensee or
participant must:
(a) on written request, provide any information; and
(b) produce all books, minutes, accounts, cash
instruments, securities, vouchers or any
documents relating to its business or the business
of its agents or other entities,
for inspection by an examiner appointed by the Central Bank at a
time and manner specified by the Central Bank or the examiner.
(2) However, the Central Bank or the examiner must not
disclose to another person any information obtained under
subsection (1) except for any of the following:
(a) for the purposes of this Act;
(b) if it is necessary to protect the financial integrity,
effectiveness or security of the system;
(c) if it is made to a recipient who is legally authorised to
get the information;
(d) if ordered by a court;


2014, No. 4 National Payment System 19

(e) if it is required to meet Samoa’s obligations under any
international agreement entered by it.
(3) The Central Bank may conduct audits or appoint an
independent auditor to conduct an audit of the accounts, books,
documents and other records of the operator and its participants
or a provider.
(4) The operator or provider must assist the Central Bank to
the extent necessary for the purpose of subsection (3).
(5) In this section, “auditor” means a public accountant who
practises under a certificate of public practice issued under the
Samoa Institute of Accountants Act 2006.
26. Fees and charges - The Central Bank may, by directives
and published in the Savali, impose fees or charges:
(a) to defray its direct and indirect costs incurred in
providing its oversight and regulatory services, to
licensees and participants; or
(b) for operational services or infrastructure under section
5.
PART 5
SETTLEMENT, NETTING AND
FINALITY OF PAYMENT
27. Settlement accounts-(1) A participant must:
(a) open and maintain settlement accounts on the books of
the Central Bank or a licensed settlement system
operator, including the maintenance of minimum
balances, on conditions specified by the Central
Bank or operator; or
(b) appoint another participant which has opened a
settlement account as a settlement agent to settle
all obligations due from the first-mentioned
participant to any other participant arising out of
each day’s clearing.
(2) If a settlement agent is appointed under subsection (1)(b),
the participant must, before any obligation is settled by the
settlement agent on the participant’s behalf, give the operator
written notice of the appointment, accompanied by a written
confirmation from the settlement agent of the appointment.


20 National Payment System 2014, No. 4

(3) A participant who intends to terminate the appointment of
the participant’s settlement agent must give to the operator
written notice of at least seven (7) days before the date of
termination. 28. Finality of payment-(1) A system must specify rules:
(a) to achieve finality in the operations of the system,
pursuant to this Act and as prescribed by any
rules, regulations or directives issued under this
Act; and
(b) to establish irrevocability of orders once entered into
the system, unless special conditions apply.
(2) An entry or payment effected under subsection (1):
(a) must not be revoked, reversed, or set aside, including,
without limitation, by insolvency or bankruptcy
proceedings or any other law similar; and
(b) is not subject to any other law or order of an
administrative or judicial authority that operates as
a stay of that payment.

29. Collateral for payment and settlement obligation - The
rights and remedies of an operator, a participant, a clearing
house, a central counter-party and any other third party into a
system or the Central Bank to collateral granted to it as security
for a payment or the performance of an obligation incurred in a
system:
(a) are not affected by insolvency or bankruptcy
proceedings or any other similar law; and
(b) in particular, may not be the subject of any stay
provision or order affecting the ability of creditors
to exercise rights and remedies on the collateral.

PART 6
WINDING-UP AND ADMINISTRATION

30. Central Bank to be notified of winding-up - An
operator or a participant that is wound-up or placed in scheme
of arrangement must immediately lodge within two (2) working


2014, No. 4 National Payment System 21

days of the date of the order or decision lodge with the Central
Bank a copy of the order or decision.

31. Prohibition - An operator or participant against which a
winding-up application or scheme of administration has been
lodged or decision for voluntary dissolution is made must not
operate or participate in the system until the application or
scheme is disposed of or finally determined.

32. Winding-up or administration of participant not to
affect finality - As an exception to the legislation on insolvency
or bankruptcy, the winding-up or the opening of scheme of
administration of the participant must not affect the finality or
irrevocability of an entry or payment which became final and
irrevocable under section 28 before the copy of the winding-up
order or administration decision was lodged with the Central
Bank.

33. Rules of the Central Bank and licensed systems to
bind liquidators - As an exception to any other law, if an
institution participating in a system is wound-up or placed in
administration or declared insolvent by a court, any provision
contained in a written netting arrangement to which the
participant is a party or any netting rules and practices applicable
to the system, are binding upon the liquidator or administrator of
the participant on a payment or settlement obligation:
(a) which has been determined through netting prior to the
issue of the winding-up or arrangement order; and
(b) which is to be discharged on or after the date of the
winding-up or arrangement order or discharge of
which was overdue on the date of the winding-up
or scheme of administration order.

34. Preservation of rights - A person has the right to enforce
any rights under the law in so far as it does not affect the finality
of payment instruction or settlement or the validity and
enforceability of a netting arrangement under this Part.


22 National Payment System 2014, No. 4

35. Conflict of laws-(1) For the insolvency of a foreign
participant, the rights and obligations of the foreign participant to
settlement are governed by the laws of Samoa.
(2) The rights and obligations of a domestic participant in a
foreign system are governed by the law of the country of the
foreign system.
PART 7
CHEQUES, ELECTRONIC FUND TRANSFERS AND ELECTRONIC MONEY

36. Cheque truncation and electronic cheque image
presentment-(1) A bank may present a cheque for payment to the
bank on whom it is drawn by notifying the bank of its essential
features by electronic or other means, instead of physically
presenting the cheque.
(2) A cheque presented for payment under this section need not
be made at the proper place or at a reasonable hour on a business
day.
(3) If, before the close of business on the next business day
following presentment of a cheque under this section, the bank on
whom the cheque is drawn requests the bank by whom the cheque
was presented to present the cheque itself:
(a) the presentment under this section must be
disregarded; and
(b) this section does not apply to the subsequent
presentment of the cheque.
(4) A request under subsection (3) does not constitute dishonour
of the cheque by non-payment.
(5) If a cheque is presented under this section, the bank that
presented the cheque and the bank on which it is drawn have the
same duties on the collection and payment of the cheque as if the
cheque itself had been presented for payment.
(6) For the purposes of this section, the essential features of a
cheque are:
(a) its serial number; and
(b) the code of the bank on whom the cheque is drawn;
and
(c) the account number of its drawer; and
(d) the amount entered on the cheque.


2014, No. 4 National Payment System 23

37. Powers of Central Bank-(1) Enforceability and
evidentiary value of electronic transfers and records must be
granted pursuant to the Electronic Transactions Act 2008.
(2) When implementing this Act and pursuant to the Electronic
Transactions Act 2008, directives may cover specific issues on
payment orders and money transfers executed by electronic
messages, including, when considered relevant, protection of users
of electronic payment instruments.

38. Customers to be notified on fees-(1) Directives under
section 37 must require a provider who imposes fees on its
customers for electronic transfers to provide a written notice of
fees to the customers on the fees imposed. (2) The notice of fees must:
(a) be posted at a prominent and conspicuous location at which the customer initiates the electronic fund transfer; and
(b) state that the fees are determined by the Central Bank. (3) A fee must not be imposed on any electronic fund transfer
initiated by a customer for whom a notice is required under
subsection (1), unless the customer is aware of the notice posted
under subsection (2) and elects to continue with the transaction.

39. Terms of transfers-(1) The terms and conditions of
electronic fund transfers involving a customer’s account must be
disclosed by a bank or other payment service provider in a manner
and language clearly understood by the customer, at the time the
customer contracts for an electronic fund transfer service, pursuant
to any directives.
(2) A disclosure must include the following, namely:
(a) the customer’s liability for unauthorised electronic
fund transfers and notice of the advisability of
prompt reporting of any loss, theft, or
unauthorised use of a card, access code or other
means of access;
(b) the telephone number of the person to be notified if
the customer believes that an unauthorised
electronic fund transfer has been or may be
effected;



24 National Payment System 2014, No. 4

(c) the kind and nature of electronic fund transfers which
the customer may initiate, including any
limitations on the frequency or amount of the
electronic fund transfers;
(d) any charges for electronic fund transfers or for the
right to make electronic fund transfers;
(e) the customer’s right to stop payment of a pre-
authorised electronic fund transfer and the
procedure to initiate a stop payment order;
(f) the customer’s right to receive information of
electronic fund transfers;
(g) the bank or other payment service provider’s liability
to the customer;
(h) the circumstances under which the bank or other
payment service provider will in the ordinary
course of business disclose information
concerning the customer’s account to third parties;
(i) a notice to the customer that a fee may be imposed if
the customer initiates a transfer from an automatic
teller machine or other electronic terminal that is
not operated by the issuer of the card or other
means of access.
(3) A bank or other payment service provider must notify a
customer in writing or by other means provided in any directives,
at least 21 days prior to the effective date of any material change
in any term of the customer’s account required to be disclosed,
unless the change is immediately necessary to maintain or restore
the security of an electronic fund transfer system or a customer’s
account.

40. Issuance of electronic money - In addition to the
licensing requirements for a provider under Part 3, an applicant
must prove that the following conditions are met:
(a) the electronic money must not include the provision of
credit;
(b) electronic money products denominated in Samoan
tala are to be treated as sight deposits, and the
electronic money must be issued in exchange for


2014, No. 4 National Payment System 25

the equivalent of Samoa tala or highly liquid
assets acceptable by the Central Bank;
(c) electronic money providers must provide statistics on
electronic money loaded and redeemed values in
their periodic financial statements, and the scheme
should also be able to provide sufficient and
reliable information to the Central Bank to
monitor and control the quantity and velocity of
electronic money supply in the economy;
(d) clearing and settlement mechanisms must facilitate
rapid provision of final settlement after a payment
instruction has been initiated in the banking
system, according to time limits imposed under
any directives;
(e) issuers must be obliged to redeem electronic money
value in Central Bank money, at par, upon request,
and the management of the underlying float and
redemption of electronic money value by the
issuer to the holder must be clearly defined.
PART 8
MISCELLANEOUS

41. Administrative penalties-(1) Without affecting any
offence provision of this Act, the Central Bank may impose
administrative penalties under this section for an infringement by
a licensee or participant or the licensee’s manager, employee or
agent of a provision or requirement of this Act or of a directive.
(2) The action taken under subsection (1) must be based on
the following:
(a) the seriousness of the breach and its effect on systemic
risk;
(b) the stage at which the infringement was detected;
(c) whether the infringement was voluntarily reported by
the perpetrator;
(d) the appropriate measure to stop the infringement.



26 National Payment System 2014, No. 4

(3) Before imposing a remedy under subsection (4), the
Central Bank must issue an infringement notice (in a form
approved by it) to the offender setting out the facts of the breach
and a specified time of at least 10 working days in which the
offender must response to the allegation.
(4) The Central Bank may, in writing, issue the following
remedies:
(a) a warning;
(b) an order to cease and desist from the breach and to
undertake remedial action;
(c) an order to perform any act necessary to comply with
the order;
(d) suspend temporarily or dismiss any manager,
employee or agent of the licensee; or
(e) suspend or revoke the licence or the authorisation to a
participant; or
(f) impose a penalty not exceeding 100 penalty units a day
for each day that the breach continues from the
date of the order.
(5) As an exception to subsection (3), the Central Bank may
immediately impose any penalty under subsection (4) if the
Central Bank has issued a notice under section 15(3) and is
satisfied that the breach has caused or likely to cause a serious
systemic risk to the National Payment System.
(6) The following decisions may be appealed on question of
law to the Supreme Court:
(a) a decision to dismiss under subsection (4)(d);
(b) a decision to revoke the licence or authorisation under
subsection (4)(e);
(c) a decision to impose a penalty under subsection (4)(f);
(d) a decision to impose a penalty under subsection (5).

42. Offences-(1) A licensee, participant or any other person
who contravenes a provision or requirement of this Act commits
an offence.



2014, No. 4 National Payment System 27

(2) The director, manager, employee or agent of a licensee or
participant commits an offence who:
(a) obstructs a person when carrying a function, duty or
power under this Act;
(b) damages, destroys, alters or falsifies accounts, books
or records of a licensee or participant;
(c) with intent to deceive, makes false entries or fails to
enter material items in the accounts of a system.
(3) A person convicted of an offence under subsection (1) or
(2) is liable to a fine not exceeding 100 penalty units or to
imprisonment for a term not exceeding two (2) years. 43. Settlement of disputes - Without affecting the right of an
operator and a participant to take a matter before the courts, an
operator and a participant may refer any dispute under this Act
for arbitration under the Arbitration Act 1976.

44. Exemption from liability - The Central Bank or officers,
employees or agents of or any other person engaged under this
Act by the Central Bank is not liable for anything done in good
faith when carrying the functions, duties and powers under this
Act.

45. Regulations and directives-(1) The Head of State, acting
on the advice of Cabinet, may make regulations to give effect to
the provisions or for the purposes of this Act.
(2) Without limiting subsection (1), the Central Bank may
issue directives, orders or guidelines necessary to give effect to
the functions, duties and powers of the Central Bank under this
Act.
(3) Directives must be consistent with this Act and
regulations.

46. Saving and transition-(1) At the commencement of this
Act, a bank, operator, provider, participant or administrator that
requires a licence or other authority under this Act continues as if
it were licensed or authorised under this Act but must, within six
(6) months from the commencement of this Act, obtain the
licence or authority.


28 National Payment System 2014, No. 4

(2) At the commencement of this Act, a directive may be
issued:
(a) to deal with the organisation, administration or
operation of bank, operator, provider, participant
or administrator in order to comply with this Act;
(b) to deal with any other saving or transitional matter.
(3) A bank, operator, provider, participant or administrator
must comply with a directive given under subsection (2).

__________
The National Payment System Act 2014
is administered by the Central Bank of Samoa.