Notice: Travel Rule Requirements for Virtual Asset Service Providers (2022-02-22)

Summary

This is a CIMA notice announcing that Part XA of the Anti-Money Laundering (Amendment) (No. 2) Regulations, 2020 will come into force on 1 July 2022. Part XA introduces the 'Travel Rule' for virtual asset service providers (VASPs), requiring them to obtain and hold accurate originator and beneficiary information on virtual asset transfers, in line with FATF Recommendation 16.

• Applies whenever transactions involve: a traditional wire transfer, a virtual asset transfer between a VASP and another obliged entity, or a transfer between a VASP and a non-obliged entity.
• Scope of application: The notice applies to all VASPs that are registered with CIMA or are in the process of registering, as well as new applicants for VASP registration or licensing.
• Existing/registering VASPs: Must proactively inform CIMA of how they intend to comply with the Travel Rule provisions.
• New applicants: Must build this information into their licence/registration applications going forward.

The notice itself is informational in nature, announcing commencement of the regulation and a related notification requirement, but it creates two concrete near-term action items: a one-off disclosure deadline for current/prospective VASPs and an ongoing requirement for future applicants to address Travel Rule compliance in their applications.

Key obligations

• VASPs registered or in the process of registering with CIMA must submit details of their Travel Rule compliance arrangements (including policies, procedures, and use of technological tools/resources) via email to vaspinfo@cima.ky by 31 March 2022.
• New applicants for VASP registration or licensing (after the date of this notice) must indicate in their applications how they will comply with the Travel Rule provisions, including as an attachment to their AML/CFT policies submitted via the REEFs application, APP 101-84 (Schedule E).

Applies to

virtual asset service providers (VASPs)

Deadlines

• 31 March 2022: Deadline for VASPs registered or in the process of registering with CIMA to submit details of their compliance arrangements for the Travel Rule requirements via email to vaspinfo@cima.ky.
• 1 July 2022: Effective/commencement date of Part XA of the Anti-Money Laundering (Amendment) (No. 2) Regulations, 2020, setting out Travel Rule identification and record-keeping requirements for virtual asset transfers.