Brunei -- Travel Rule Implementation Regulatory Overview

Brunei has adopted and implemented the FATF Travel Rule through guidance issued by its financial regulator, Autoriti Monetari Brunei Darussalam (AMBD).

Here's a breakdown of its implementation:

1. Whether Adopted: Yes, Brunei has adopted the FATF Travel Rule. The Autoriti Monetari Brunei Darussalam (AMBD), Brunei's central bank and financial regulator, issued guidance explicitly covering Virtual Asset Service Providers (VASPs) and the requirements stemming from FATF Recommendation 15 (Virtual Assets and VASPs), which includes the Travel Rule.

2. Effective Date: The "Guidance on Anti-Money Laundering and Countering the Financing of Terrorism for Virtual Asset Service Providers (VASPs)" was initially issued on 14 December 2020 and subsequently updated on 14 September 2021. This guidance is effective from its issuance dates, making the Travel Rule requirements applicable from then.

3. Threshold Amounts: The AMBD VASP Guidance specifies a threshold for the collection and transmission of originator and beneficiary information:

   • "In cases where the transaction amount is BND 1,500 (Brunei Dollars) or more (or equivalent in other currencies or virtual assets), whether in a single transaction or several transactions that appear to be linked."

4. Which VASPs Are Covered: The AMBD VASP Guidance applies to all Virtual Asset Service Providers (VASPs) that operate in or from Brunei Darussalam. The guidance defines a VASP broadly as any natural or legal person who, as a business, conducts one or more of the following activities or operations for or on behalf of another natural or legal person:

   • Exchange between virtual assets and fiat currencies.
   • Exchange between one or more forms of virtual assets.
   • Transfer of virtual assets.
   • Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
   • Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

5. Technical Implementation Requirements: The AMBD VASP Guidance specifies what information needs to be collected and made available, rather than dictating a specific technical solution or protocol (e.g., TRISA, Sygna, Travel Rule Universal Protocol). This gives VASPs flexibility in choosing a technical solution, as long as it allows them to comply with the data collection and transfer requirements.

   For virtual asset transfers of BND 1,500 or more, VASPs are required to:

   • For Originator Information: Obtain and hold the following:
     • Originator’s name.
     • Originator’s physical address.
     • Originator’s account number or unique transaction identifier (e.g., wallet address).
   • For Beneficiary Information: Obtain and hold the following:
     • Beneficiary’s name.
     • Beneficiary’s physical address.
     • Beneficiary’s account number or unique transaction identifier (e.g., wallet address).

   VASPs must make this information available to relevant authorities upon request. In situations where the other VASP involved in the transfer is not regulated or does not apply the Travel Rule, the initiating VASP must assess the risks and take mitigating measures (e.g., rejecting the transaction, filing a suspicious transaction report).

6. Penalties for Non-Compliance: Non-compliance with the AMBD VASP Guidance and the underlying Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework can lead to significant penalties under the Anti-Money Laundering and Counter-Terrorism Financing Order, 2011 (AMLA/CTFA 2011).

   Penalties can include:

   • Fines: Substantial monetary penalties for institutions and individuals.
   • Imprisonment: Individuals involved in serious breaches or deliberate non-compliance can face terms of imprisonment.
   • Withdrawal of License/Registration: VASPs failing to comply may have their operating licenses or registrations revoked by the AMBD, effectively barring them from operating in Brunei.
   • Reputational Damage: Public sanctions and enforcement actions can severely damage a VASP's reputation.

   For specific penalties, one would refer to Part IV (Offences and Penalties) of the AMLA/CTFA 2011, which outlines various offences related to money laundering, terrorism financing, and non-compliance with reporting and record-keeping obligations. For example, Section 36 of the AMLA/CTFA 2011 states that a person who contravenes any Order, direction, or requirement of the AMBD or any provision of the Order for which no penalty is expressly provided shall be guilty of an offence and liable on conviction to a fine or imprisonment, or both.

References:

• AMBD Guidance on Anti-Money Laundering and Countering the Financing of Terrorism for Virtual Asset Service Providers (VASPs) (Updated 14 September 2021):
  • You can typically find this on the AMBD's official website under "Notices & Guidelines" or "Publications."
  • Direct link (as of current search): https://www.ambd.gov.bn/SiteAssets/Guidance%20on%20AML%20CFT%20for%20VASPs.pdf
• Anti-Money Laundering and Counter-Terrorism Financing Order, 2011 (AMLA/CTFA 2011):
  • Often available on the AMBD's website under "Legislation" or through Brunei's Attorney General's Chambers website.
  • Example source (may require navigation): https://www.agc.gov.bn/SitePages/Legislation.aspx
• FATF Mutual Evaluation Report of Brunei Darussalam (October 2021):
  • Confirms Brunei's implementation of FATF Recommendation 15 and the Travel Rule.
  • https://www.fatf-gafi.org/content/fatf-gafi/en/countries-regions/brunei.html (Look for the "Mutual Evaluation Report" document).

In summary, Brunei has a clear regulatory framework in place for the FATF Travel Rule, mandating data collection for virtual asset transfers above BND 1,500 and carrying significant penalties for non-compliance.