Armenia -- Travel Rule Implementation Regulatory Overview

Armenia has made significant strides in implementing the FATF Travel Rule, primarily by incorporating virtual assets and Virtual Asset Service Providers (VASPs) into its existing Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) framework.

Here's a breakdown of the status:

1. Adoption and Effective Date

• Adopted: Yes, Armenia has adopted the FATF Travel Rule by amending its primary AML/CFT legislation to include virtual assets and regulate VASPs.
• Effective Date: The key legislative changes, including specific regulations for VASPs, became effective around January 2022. This followed amendments to the Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing and the issuance of specific regulatory acts by the Central Bank of Armenia.

2. Threshold Amounts

Armenia generally aligns with the FATF's recommended thresholds for the Travel Rule. While specific Armenian legislation might detail these, the standard FATF thresholds are:

• Cross-border transfers: USD/EUR 1,000 or more.
• Domestic transfers: USD/EUR 3,000 or more (though many countries apply the lower threshold to domestic as well for consistency).

For transactions at or above these thresholds, VASPs are required to obtain and transmit originator and beneficiary information. Below these thresholds, only a "check-the-box" approach for screening is generally required by FATF.

3. Which VASPs are Covered

The Armenian framework defines and covers a broad range of Virtual Asset Service Providers (VASPs). According to the Decision No. 44-N of January 26, 2022, "On Approving the Procedure for Licensing, Regulation, and Supervision of Virtual Asset Service Providers" by the Central Bank of Armenia, covered entities typically include:

• Entities that exchange virtual assets for fiat currency or other virtual assets.
• Entities that transfer virtual assets.
• Custodians of virtual assets (i.e., those providing safekeeping and/or administration services for virtual assets or instruments enabling control over virtual assets).
• Entities providing financial services related to an issuer's offer and/or sale of a virtual asset.

In essence, any entity conducting business that involves the provision of services for or on behalf of another natural or legal person that facilitates the transfer or exchange of virtual assets falls under the regulatory scope.

4. Technical Implementation Requirements

The Armenian legislation and Central Bank guidance, while not typically mandating a specific technical solution, require VASPs to:

• Obtain and Transmit Information: For transactions exceeding the threshold, VASPs must obtain required originator and beneficiary information and transmit it to the beneficiary VASP. This includes:
  • Originator Information: Name, physical address, unique identification number (e.g., passport number), customer identification number (if applicable), and the virtual asset wallet address.
  • Beneficiary Information: Name, physical address, unique identification number, customer identification number (if applicable), and the virtual asset wallet address.
• Secure Data Transfer: The method of information transfer must be secure, immediate, and compliant with data protection and privacy regulations. VASPs are expected to implement robust systems to ensure the integrity and confidentiality of this data.
• Record-Keeping: VASPs must maintain records of all collected information for a prescribed period (typically 5 years) to be available to authorities upon request.
• Risk-Based Approach: VASPs are expected to integrate the Travel Rule data into their overall AML/CFT risk assessment framework, identifying and reporting suspicious transactions.
• Compliance with Data Protection: Adherence to Armenian data protection laws (e.g., the Law on Protection of Personal Data) is paramount when collecting, storing, and transmitting personal information.

5. Penalties for Non-Compliance

Penalties for non-compliance with AML/CFT obligations, including those related to the Travel Rule, are outlined in the Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing and related regulations. These typically include:

• Administrative Fines: Significant monetary penalties can be imposed on non-compliant VASPs.
• Sanctions against Management: Fines or other administrative measures may also be directed at the management or responsible individuals within the VASP.
• Suspension or Revocation of License: The Central Bank of Armenia has the authority to suspend or revoke the operating license of a non-compliant VASP.
• Other Enforcement Actions: This can include written warnings, demands for corrective actions, and increased supervisory oversight.
• Criminal Charges: In cases of severe or repeated breaches, especially those linked to actual money laundering or terrorist financing activities, criminal proceedings against the VASP and/or its personnel may be initiated.

References and URLs:

• Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing:
  • While finding a direct, up-to-date English translation on an official government website can be challenging, the law is generally referred to as Հայաստանի Հանրապետության օրենքը փողերի լվացման և ահաբեկչության ֆինանսավորման դեմ պայքարի մասին (Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing).
  • It can be found on legal information systems like ARLEX (Ministry of Justice): http://www.arlis.am/DocumentView.aspx?docID=141834 (Armenian)
• Central Bank of Armenia (CBA) Official Website:
  • The CBA is the primary regulator for VASPs. Their official website is the best source for regulations and guidance.
  • https://www.cba.am/ (English available)
• CBA Decision No. 44-N of January 26, 2022, "On Approving the Procedure for Licensing, Regulation, and Supervision of Virtual Asset Service Providers":
  • This is a crucial regulatory act. Search the CBA's official publications or legal databases for the official text (usually in Armenian).
  • It is often referenced in legal analyses concerning VASP regulation in Armenia.

Armenia's regulatory framework demonstrates a clear commitment to aligning with FATF standards, making it a jurisdiction where VASPs must adhere to robust AML/CFT measures, including the Travel Rule.