Central African Republic -- Travel Rule Implementation Regulatory Overview

The implementation of the FATF Travel Rule in the Central African Republic (CAR) is primarily driven by regional directives from the Economic and Monetary Community of Central Africa (CEMAC), to which CAR belongs. While CAR made headlines for adopting Bitcoin as legal tender in 2022, this move has been met with strong opposition from CEMAC and the IMF, and CAR remains subject to CEMAC's financial regulations, including those concerning virtual assets and AML/CFT.

The key regulatory framework for virtual assets, including the Travel Rule requirements, originates from CEMAC.

Status of FATF Travel Rule Implementation in Central African Republic

Overall Status: The Central African Republic, as a member of CEMAC, is bound by the regional framework for the regulation of Virtual Asset Service Providers (VASPs). This framework incorporates the principles of the FATF Travel Rule, requiring VASPs to collect and transmit originator and beneficiary information for virtual asset transfers. While CAR has its own national context regarding cryptocurrency, the CEMAC regulations are legally binding for financial institutions and VASPs operating within the region.

1. Adoption: The Travel Rule is adopted through regional CEMAC legislation that member states, including CAR, are obliged to transpose into national law. The primary legislation is:

• Regulation No. 04/22/CM/UMAC/CM of 21 December 2022 concerning the regulation of Virtual Asset Service Providers (VASPs) in the CEMAC zone.
• This regulation is further complemented by an instructional circular from the Banking Commission of Central Africa (COBAC), which is the primary supervisor for financial institutions in CEMAC:
  • Instruction No. 001/GR/2023 of 31 January 2023 from COBAC on the practical implementation of certain provisions of Regulation No. 04/22/CM/UMAC/CM.

2. Effective Date:

• Regulation No. 04/22/CM/UMAC/CM came into effect upon its publication on 21 December 2022.
• The COBAC Instruction No. 001/GR/2023, providing implementation guidance, was effective from 31 January 2023.
• While national transposition into CAR-specific law might still be ongoing or subject to internal processes, the regional directive and COBAC's instruction mandate compliance from VASPs operating in CAR as of these dates.

3. Threshold Amounts: The CEMAC framework, consistent with FATF guidance, mandates the collection and transmission of originator and beneficiary information for virtual asset transfers where the value:

• Exceeds EUR 1,000 (or its equivalent in XAF or other currency) for transactions conducted by VASPs.
• This threshold applies to both single transactions and linked transactions.

4. Which VASPs are Covered: The CEMAC Regulation defines VASPs broadly to cover entities that, as a business, conduct one or more of the following activities 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.

This definition aims to capture all relevant service providers in the virtual asset ecosystem operating within the CEMAC zone, including those in CAR.

5. Technical Implementation Requirements: The CEMAC Regulation and COBAC Instruction require VASPs to:

• Collect and retain the following information for transactions above the threshold:
  • Originator Information: Name, physical address, national identity number (or customer identification number), date and place of birth, and virtual asset wallet address (or unique transaction identifier).
  • Beneficiary Information: Name, physical address, virtual asset wallet address (or unique transaction identifier).
• Transmit this information to the beneficiary VASP, where applicable, immediately and securely.
• Maintain records of all collected information for at least five (5) years.
• Implement risk-based procedures to identify and verify the identity of customers, especially for higher-risk transactions or relationships.
• While specific technical protocols (e.g., TRISA, Sygna) are not explicitly mandated by the CEMAC framework, VASPs are expected to adopt secure and interoperable solutions for information exchange.

6. Penalties for Non-Compliance: Non-compliance with the CEMAC regulation and COBAC instructions can lead to a range of penalties, typically enforced by COBAC and/or national AML/CFT authorities. These can include:

• Administrative sanctions: Fines, injunctions, public reprimands.
• Withdrawal or suspension of operating licenses for VASPs.
• Referral to national judicial authorities for criminal prosecution under national AML/CFT laws, which can lead to imprisonment and substantial monetary fines for individuals and legal entities.
• The specific penalties are generally outlined in the national AML/CFT laws of CEMAC member states, as well as COBAC's supervisory powers.

References:

1. CEMAC Regulation No. 04/22/CM/UMAC/CM: (French)

   • A full official link might be harder to find publicly and consistently, as these documents are often distributed to member states and regulated entities. However, news outlets and legal summaries often reference it:
   • Example summary/mention: https://www.lexology.com/library/detail.aspx?g=e46d29aa-4481-4286-bc19-14a57121287c
   • Another mention: https://www.chainalysis.com/blog/travel-rule-adoption-in-africa/

2. COBAC Instruction No. 001/GR/2023: (French)

   • Often circulated internally within the CEMAC financial sector.
   • Example mention/summary of its content: https://www.coinfirm.com/blog/african-countries-travel-rule-implementation/
   • Official COBAC communications often mention such instructions, though direct PDF links can be ephemeral. The COBAC website (www.cobac.org) is the primary source, but direct links to specific instructions may change.

It is important for any VASP operating in the Central African Republic to consult directly with local legal counsel and regulatory experts to ensure full compliance with both the regional CEMAC framework and any specific national transposition laws or guidelines issued by the CAR authorities.