On 28 June, Forbes carried a useful article saying that there has been an enormous upsurge in interest in FATF Recommendation 16, widely known as the “Travel Rule”.  It is said that prevention of money laundering, terrorism financing, bribery and corruption, tax evasion, international sanctions breaches, and other illicit activity via the exchange of virtual assets such as bitcoin, ether, XRP, and others is at the centre of this activity. It explains that, put simply, the Travel Rule covers VASP such as cryptocurrency exchanges and digital wallet providers, custodians, and some traditional financial institutions transacting in virtual assets. It ensures that originators, intermediaries, and beneficiaries of virtual asset transactions disclose a minimum standard of customer data. It identifies some of the comprehensive tools for the transfer, registration, and reporting of Travel Rule data which, it says, are key.  It sets out the 6 guiding principles it says are needed for Travel Rule implementation and standardisation. These principles should form the cornerstones of any technical solution that facilitates compliance with the Travel Rule.  It also says that VASP must be able, where applicable, to freeze transactions as well as block and prohibit transactions with designated persons, in line with sanctions lists, PEP lists, blacklisted address lists, etc. Finally, it says, regulators need to have meaningful information and remediation to enable them to license VASP and oversee VASP activities in sufficient detail.





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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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