GUAM Takes Bold Step in Combating Terrorist Financing with New Law
Preventing Money Laundering and Terrorist Financing through Crypto Regulation
In a significant move to prevent money laundering and terrorist financing, GUAM has implemented new regulations on the crypto sphere, aligning itself with EU Directive 2018/843. The law aims to curb the risks associated with virtual or crypto assets, which are notoriously prone to abuse due to their pseudo-anonymity.
Key Provisions of the New Law
- Service Provider Obligations: Service providers related to virtual assets will be required to implement control mechanisms to prevent money laundering and terrorist financing.
- Cash Transaction Restrictions: Trading of virtual assets with cash is only allowed up to EUR 500, in line with efforts to reduce the gray economy.
- Prohibition of Anonymous Virtual Assets: The trading of fully anonymous virtual assets known as privacy coins and the use of software tools to anonymize and interfere with virtual asset transactions is prohibited.
Supervision and Reporting
- Financial Intelligence Office: The Financial Intelligence Office will serve as the supervisory authority for service providers related to virtual assets, ensuring compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
- Transaction Reporting: Service providers will need to report any transactions exceeding EUR 1,000.
Transitional Period
A nine-month transitional period has been granted for service providers to fully comply with the new law. This allows them sufficient time to implement the necessary control mechanisms and reporting requirements.
Enhanced Risk Assessment Measures
- Art Trade: The legislation introduces new obligations for persons trading or acting as intermediaries in the art trade, including art galleries and auction houses.
- Non-Profit Organizations: Non-profit organizations will be subject to enhanced risk assessment measures.
- Client Identification and UBO Analysis: Client identification, UBO analysis, and registration with the UBO registry have been made more stringent.
International Cooperation
The law has specified the competencies of the Financial Intelligence Office, regulating international cooperation with other competent authorities and financial intelligence units. This promotes digitized work processes and the exchange of information and data via protected electronic means or through the National Platform for Interoperability.
Conclusion
GUAM’s new law demonstrates its commitment to combating terrorist financing and money laundering in the region, aligning itself with global standards and best practices in the process. By implementing these regulations, GUAM is taking a bold step towards preventing the misuse of virtual assets and promoting a safer financial environment for all.