Remote VASP serving residents in Cuba

Ley No. 143/2021 (Law 143/2021) – Ley de Prevención y Confrontación del Lavado de Activos, el Financiamiento al Terrorismo y a la Proliferación de Armas de Destrucción Masiva

Resolución No. 215/2021 del Banco Central de Cuba (BCC)

Resolución No. 216/2021 del Banco Central de Cuba (BCC)

Legalizes the use of virtual assets for financial transactions between individuals and legal entities, but only those authorized by the BCC.

Requires service providers dealing with virtual assets to obtain a license from the BCC.

Prohibits the use of virtual assets that are not authorized by the BCC.

Identification and Verification:

Ongoing Monitoring: Conduct ongoing monitoring of the business relationship and transactions undertaken by customers to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile, including the source of funds.

Risk-Based Approach (RBA): Implement a risk-based approach, meaning that the intensity of CDD measures should be commensurate with the level of ML/TF risk identified.

Simplified Due Diligence (SDD): May be applied in low-risk situations.

Enhanced Due Diligence (EDD): Must be applied for higher-risk categories, such as:

Resolution 215/2021 covers any legal entity operating in Cuba that intends to provide virtual asset services to the public or other entities. These services include, but are not limited to:

These entities must obtain a license from the Banco Central de Cuba to operate legally.

As the Travel Rule itself is not explicitly mandated, there are no specific technical implementation requirements for the transmission of originator and beneficiary information.

Resolution 215/2021 broadly requires authorized VASPs to have "robust technological infrastructure" and "risk management systems" to prevent money laundering and terrorism financing, but it does not specify data standards or protocols for inter-VASP information sharing related to transfers.

Resolution 215/2021 regulates the use of virtual assets in Cuba. It defines virtual assets and states that their use for transactions between natural and legal persons is authorized by the BCC, provided they are issued by central banks or monetary authorities, or otherwise explicitly approved by the BCC. It also explicitly prohibits the use of virtual assets issued by private entities without prior authorization from the BCC. Entities operating with virtual assets must obtain a license from the BCC.

Resolution 216/2021 initially authorized financial institutions to use virtual assets under BCC supervision with prior authorization, but subsequent implementation has moved to a concrete licensed framework where only 10 state-owned and mixed-enterprise firms have been granted licenses, excluding regular banks and non-bank financial institutions, and accompanied by new restrictive conditions including unilateral account freezing powers.

However, Resolution 215/2021 mandates that any legal person (entity) operating with virtual assets (which would include providing custody-like services) must obtain prior authorization from the Banco Central de Cuba.

Lack of Transparency: The Cuban government is not known for its transparency regarding internal enforcement actions, especially against individuals or smaller, private entities.

Nature of the Economy: In a state-controlled economy, significant independent financial operations (like an unregistered crypto exchange) would likely be shut down or absorbed without a public trial or detailed announcement.

Central Bank of Cuba (BCC) holds expanded enforcement powers, including unilateral authority to freeze bank accounts without notice and suspend Visa and Mastercard transactions.

Decree-Law 215/2021: Published in the Official Gazette on August 16, 2021, coming into effect 90 days later.