Central African Republic -- AML/CFT Compliance Regulatory Overview

The Central African Republic (CAR) has taken a unique approach to virtual assets, notably by adopting Bitcoin as legal tender and launching its own national cryptocurrency, the Sango Coin. This has necessitated the development of a regulatory framework, albeit one that is still evolving.

While specific, granular regulations for Virtual Asset Service Providers (VASPs) are still maturing, the existing legislative framework and CAR's participation in regional bodies (like CEMAC) mean that VASPs are subject to a combination of national, regional, and international AML/CFT standards.

AML/CFT Legislation for Cryptocurrency/Virtual Asset Service Providers in CAR

1. Law No. 22.006 of April 27, 2022, on the Regulation of Cryptocurrencies in the Central African Republic:

   • This is the foundational law that made Bitcoin legal tender and established the legal framework for virtual assets in CAR.
   • It mandates that all virtual asset activities, including those carried out by VASPs, must comply with national and international AML/CFT standards. It establishes a requirement for licensing and supervision of VASPs.
   • While it creates the framework, it generally defers to further decrees or existing AML/CFT laws for specific requirements.

2. BEAC Regulation No. 01/17/CEMAC/UMAC/CM of March 30, 2017, on the Prevention and Suppression of Money Laundering and Terrorist Financing in the CEMAC Zone:

   • As a member of the Economic and Monetary Community of Central Africa (CEMAC), CAR is bound by regional regulations issued by the Banque des États de l'Afrique Centrale (BEAC).
   • This regulation provides the comprehensive AML/CFT framework for financial institutions within the CEMAC zone. While it predates the explicit regulation of VASPs, the CAR's 2022 crypto law implies that VASPs should adhere to the same stringent AML/CFT requirements as traditional financial institutions, as per FATF Recommendation 15.
   • This regulation covers customer due diligence, suspicious transaction reporting, and record-keeping obligations for all regulated entities.

3. Law No. 00-010 of May 8, 2000, on Money Laundering and Terrorist Financing:

   • This is the general national AML/CFT law in CAR. While the BEAC regional regulation often takes precedence for financial institutions, this law provides the overarching legal basis for combating financial crime at a national level.

Customer Due Diligence (CDD) Requirements

VASPs in CAR are expected to implement CDD measures consistent with FATF standards and the BEAC regional regulation, which include:

• Identification and Verification:
  • Collecting and verifying the identity of customers (natural and legal persons) using reliable, independent source documents, data, or information. This includes full name, date of birth, nationality, physical address, and identification numbers (e.g., passport, national ID card).
  • For legal entities, this includes verifying the legal form, name, address, directors, and beneficial owners.
• Understanding the Nature of Business: Understanding the purpose and intended nature of the business relationship.
• Ultimate Beneficial Ownership (UBO): Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of customers, especially for legal persons and arrangements.
• Ongoing Monitoring: Continuously monitoring the business relationship and transactions undertaken throughout the course of the relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.
• Enhanced Due Diligence (EDD): Applying enhanced measures for higher-risk categories, such as politically exposed persons (PEPs), cross-border correspondent relationships, or transactions involving high-risk jurisdictions or products.
• Source of Funds/Wealth: For high-risk clients or large transactions, inquiring about the source of funds or wealth.

Suspicious Transaction Reporting (STR)

• Obligation to Report: VASPs are obligated to report any suspicious transactions, regardless of the amount involved, to the national Financial Intelligence Unit (FIU).
• Reporting Body: The national FIU in the Central African Republic is the Cellule Nationale de Traitement des Informations Financières (CENTIF).
• Reports must be made promptly when a VASP knows, suspects, or has reasonable grounds to suspect that funds are the proceeds of a criminal activity or are related to terrorist financing.
• Tipping-off is strictly prohibited, meaning VASPs must not inform the customer or any third party that an STR has been filed.

Record-Keeping Obligations

VASPs must maintain records for a specified period to assist in investigations and analysis. These typically include:

• CDD Information: All documents and information obtained during the CDD process (identification documents, verification records).
• Transaction Records: Records of all transactions, including sender and recipient information, amounts, dates, and types of virtual assets involved.
• STRs: Copies of all suspicious transaction reports filed.
• Duration: Records must generally be kept for a minimum of five (5) years after the business relationship has ended or after the date of the transaction.

Overseeing Authority for Compliance

The regulatory landscape for VASPs in CAR is evolving, with several bodies playing a role:

1. National Agency for the Regulation of Virtual Assets (ANRAV - or similar body):

   • The Law No. 22.006 of April 27, 2022, provides for the establishment of a national body responsible for the regulation, supervision, and licensing of virtual asset service providers. This entity, once fully operational, will be the primary authority for crypto-specific compliance.
   • Note: As of now, the full operationalization and specific structure of this agency are still developing.

2. Cellule Nationale de Traitement des Informations Financières (CENTIF):

   • Role: The FIU responsible for receiving, analyzing, and disseminating suspicious transaction reports. CENTIF plays a crucial role in the operational AML/CFT framework.
   • URL (General info, direct link to CAR's CENTIF portal is scarce, but typical FIU functions are universal): You can find general information on FIUs through the Egmont Group (an international body for FIUs): https://egmontgroup.org/

3. Commission Bancaire de l'Afrique Centrale (COBAC):

   • Role: The banking supervisory body for the CEMAC zone, which includes CAR. COBAC oversees prudential regulation for traditional financial institutions. While not directly supervising VASPs yet, its regional AML/CFT directives (like the BEAC Regulation) apply, and it may play an increasing role in broader financial stability aspects related to virtual assets.
   • URL: https://www.cobac.org/

4. Banque des États de l'Afrique Centrale (BEAC):

   • Role: The central bank for the CEMAC zone. BEAC is responsible for monetary policy and issuing the regional AML/CFT regulations that impact all financial institutions, including, by extension, VASPs under the CAR's crypto law.
   • URL: https://www.beac.int/

Important Considerations:

• Evolving Landscape: The regulatory environment for virtual assets in CAR is dynamic and still developing. VASPs should monitor official pronouncements and new decrees closely.
• FATF Standards: Given CAR's commitment to international AML/CFT standards and its participation in regional bodies that adhere to FATF recommendations, VASPs should align their practices with the latest FATF guidance on virtual assets.
• Sanctions Compliance: VASPs must also comply with national and international sanctions regimes.