AML/CFT Guidance Notes for Virtual Asset Service Providers and Initial Token Offering Issuers – Finance and Banking

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1.0 INTRODUCTION

1.1 The Mauritius Financial Services Commission (the “FSC”) is established under the Financial Services Act 2007 (the “FSA”) and has the mandate to regulate the non-banking financial services and global business sectors. The FSC is under Section 5 of the Virtual Assets and Initial Token Offering Services Act 2021 (“VAITOS”) responsible for regulating and supervising asset service providers. (“VASP”) and Initial Token Offering Issuers (“IITO”). ).

1.2 Guidance Notes are issued by the FSC pursuant to its powers under Section 7(1)(a) of the FSA.

1.3 The Guidance Notes define the measures that entities regulated under the VAITOS Act 2021 must apply for the prevention of money laundering and terrorist financing (“ML/FT”) during their activities and operations.

1.4 The provisions of the Guidance Notes should be read in conjunction with the VAITOS Act 2021, the Financial Intelligence and Anti-Money Laundering Act 2002 (“FIAMLA 2002”), the Financial Intelligence Regulations 2018 and Anti-Money Laundering (“FIAMLR 2018”) and the FSC Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) Handbook.

1.5 Terms used in these guidance notes have, unless otherwise specified, the same meaning as in the relevant laws.

2.0 PURPOSE

2.1 Guidance notes are established for:

2.1.1 provide an overview of the significance of ML/FT risks associated with Virtual Asset (“VA”) activities; and

2.1.2 guide VASPs and IITOs in understanding their specific AML/CFT compliance obligations under the VAITOS Act 2021.

3.0 EFFECTIVE DATE

3.1 The guidance notes are effective from February 28, 2022.

3.2 The Guidance Notes may be subject to change or update from time to time to reflect changes in the national and international regulatory landscape, including market dynamics of the AV sector, in or from Mauritius. of Mauritius.

4.0 BACKGROUND TO VAITOS LAW 2021

4.1 The VAITOS Act 2021, which came into force on February 7, 2022, provides a comprehensive legislative framework for VASPs and IITOs in accordance with the Financial Action Task Force (“FATF”) international standards with respect to the management, mitigation and prevention of any ML. /FT risks.

4.2 The VAITOS Act 2021 designates the FSC as the prudential and AML/CFT supervisory authority to regulate and supervise the business activities of VASPs and IITOs respectively.

4.3 Any person carrying on the business of a VASP and an IITO, in or from Mauritius, must hold a license or registration, as the case may be, issued by the FSC.

4.4 VASPs and IITOs (hereafter also collectively referred to as “regulated entities”) are encouraged to:

4.4.1 reflect the elements of the guidance notes in their policies, procedures and internal controls; and

4.4.2 therefore apply the guidance notes, inter alia, for the assessment of persons managing, controlling, directing, holding or exercising key functions within their entities.

5.0 DEFINITIONS AND TERMINOLOGY

5.1 The FATF, through its Recommendation 15 and the relevant interpretative notes issued thereunder, requires countries to ensure that VASPs are regulated for AML/CFT purposes, licensed or registered and subject to effective systems for monitoring and ensuring compliance with the measures contained therein.

5.2 VASPs and other financial institutions that engage in VA-related activities are required to identify, assess and take effective measures to mitigate their ML/FT risks.

5.3 For any additional information, in this regard, please refer to the latest FATF guidance or updates: A risk-based approach for virtual assets and virtual asset service providers published in October 2021.

5.4 Virtual Asset

5.4.1 A VA is a digital representation of value that can be traded or transferred digitally and can be used for payment or investment purposes. VA does not include digital representations of fiat currencies, securities, and other financial assets that fall within the jurisdiction of the Securities Act.

5.4.2 VA must have inherent value to be exchanged or transferred and used for payment or investment purposes or be a means of recording or representing ownership of assets.

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The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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