Bolivia -- AML/CFT Compliance Regulatory Overview

It is crucial to understand that Bolivia has a highly restrictive stance on cryptocurrencies and virtual assets. The Central Bank of Bolivia (Banco Central de Bolivia - BCB) issued a strong prohibition against their use and commercialization.

Therefore, the primary "AML/KYC requirement" for a VASP in Bolivia is that operating such a service is generally prohibited. If an entity were to operate in violation of this prohibition, it would first be breaking the law concerning monetary policy, and then any general AML/CFT requirements applicable to financial activities would still apply to their illicit operations.

Here's a breakdown of the situation:

AML/CFT Requirements for Virtual Asset Service Providers (VASPs) in Bolivia

1. Current Legal Status of Cryptocurrencies and VASPs:

• Prohibition by the Central Bank: The Banco Central de Bolivia (BCB) issued Resolution 144/2014, which explicitly prohibits the use, commercialization, and negotiation of any currency or monetary instrument that is not issued and regulated by the national monetary authority (the BCB itself). This resolution effectively bans cryptocurrencies and their related services within Bolivia.

  • URL (BCB official site - relevant news/statements often linked from here): https://www.bcb.gob.bo/

  • Implication: This means that there are no specific VASP licensing or regulatory frameworks for AML/KYC because the activity itself is generally disallowed. Any entity operating as a VASP would be doing so in violation of this central bank resolution.

2. General AML/CFT Legislation (Applicable to all financial activities, including potentially illicit ones):

Despite the prohibition on virtual assets, Bolivia has a general AML/CFT framework designed to combat illicit financial activities. If any entity, including one illegally operating as a VASP, were to engage in suspicious transactions, these general laws would apply.

• Law No. 004 of Corruption, Illicit Enrichment and Investigation of Fortunes "Marcelo Quiroga Santa Cruz" (Ley N° 004 de Lucha contra la Corrupción, Enriquecimiento Ilícito e Investigación de Fortunas “Marcelo Quiroga Santa Cruz”): This is the foundational anti-corruption and anti-money laundering law in Bolivia. It establishes the framework for prosecuting corruption and illicit enrichment and outlines obligations for preventing money laundering.
• Supreme Decree No. 2145: This decree regulates Law No. 004 and details the structure and functions of the Financial Investigations Unit (UIF).

3. Customer Due Diligence (CDD) Requirements (Hypothetical, if VASPs were legal/regulated):

If VASPs were legal and regulated in Bolivia, they would typically be expected to adhere to CDD requirements similar to those for traditional financial institutions, based on FATF recommendations and the spirit of the existing AML laws. These would include:

• Identification and Verification of Identity:
  • Collecting full legal name, date of birth, address, and national identification number (e.g., Cédula de Identidad).
  • Verifying identity using official, reliable, independent source documents (e.g., valid government-issued ID).
• Beneficial Ownership: Identifying and verifying the identity of the beneficial owner(s) if the customer is a legal entity or arrangement.
• Purpose and Nature of the Business Relationship: Understanding the purpose and intended nature of the business relationship.
• Ongoing Due Diligence: Conducting ongoing monitoring of the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.
• Risk-Based Approach: Applying enhanced due diligence (EDD) for higher-risk customers (e.g., politically exposed persons - PEPs, customers from high-risk jurisdictions) and simplified due diligence (SDD) for lower-risk customers.

4. Suspicious Transaction Reporting (STR):

• Obligation: Any entity, including those that might illegally facilitate virtual asset transactions, would be obligated under the general AML laws to report suspicious transactions to the Financial Investigations Unit (UIF).
• Indicators of Suspicion: These include unusual transaction patterns, large transactions inconsistent with the customer's profile, attempts to avoid identification, structuring transactions, or transactions involving sanctioned entities or individuals.
• Reporting Mechanism: Reports are submitted to the UIF.

5. Record-Keeping Obligations:

• Retention Period: In line with international standards and general Bolivian AML laws, financial institutions (and by extension, any entity processing financial transactions) are generally required to retain records for a minimum of five (5) to ten (10) years.
• Types of Records: This includes customer identification data, account files, business correspondence, and records of all transactions (domestic and international), as well as records of any STRs made.

6. Authority Overseeing Compliance:

• Unidad de Investigaciones Financieras (UIF): This is Bolivia's Financial Intelligence Unit. The UIF is the primary authority responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering and terrorist financing. They would be the body to whom STRs are submitted and who would investigate suspicious financial activities, regardless of whether the underlying activity (like VASP operation) is permitted.

  • URL (UIF): http://www.uif.gob.bo/

• Autoridad de Supervisión del Sistema Financiero (ASFI): This is the financial system supervisory authority. While ASFI supervises traditional banks, insurance companies, and other regulated financial entities, their role regarding VASPs is primarily to enforce the BCB's prohibition and ensure regulated entities do not facilitate prohibited activities.

  • URL (ASFI): https://www.asfi.gob.bo/

Summary and Caveat:

Given the explicit prohibition by the Banco Central de Bolivia, there are no specific AML/KYC requirements tailored for legal VASP operations in Bolivia. Any entity attempting to operate a VASP would first face legal challenges due to the ban. However, the general AML/CFT framework (Law 004, Supreme Decree 2145) and the investigative powers of the UIF would still apply to any financial activity, including those deemed illicit or prohibited.

Anyone considering virtual asset services in Bolivia should seek specific legal counsel due to the highly restrictive regulatory environment.