Comoros -- Sanctions Compliance Regulatory Overview

The cryptocurrency regulatory landscape in Comoros, particularly concerning sanctions, largely aligns with international standards due to its membership in international bodies and its efforts to combat money laundering and terrorist financing. While there isn't a highly developed, standalone regulatory framework specifically for crypto assets or VASPs (Virtual Asset Service Providers) with unique Comorian sanctions lists, general financial laws and international obligations apply.

Here's a breakdown:

1. International Sanctions Regimes (OFAC, EU, UN) and VASP Compliance

Comoros, as a UN member state and participant in regional AML/CFT bodies, is obligated to implement UN Security Council sanctions. Furthermore, any VASP operating in Comoros that deals with international transactions, particularly those involving US dollars, EU entities, or global service providers, will be indirectly or directly subject to OFAC and EU sanctions due to their extraterritorial reach.

a. UN Sanctions Compliance:

• Requirements: Comoros is obligated to implement all UN Security Council Resolutions, which include asset freezes, travel bans, and arms embargoes against individuals, entities, and countries designated by various UN sanctions committees (e.g., Al-Qaida, ISIS, Taliban, DPRK, Iran, etc.).
• VASP Obligations: VASPs in Comoros must:
  • Screen all customers (KYC/CDD) and transactions against the UN Consolidated Sanctions List.
  • Freeze virtual assets and funds of designated persons and entities without delay.
  • Prohibit making virtual assets, funds, or economic resources available to sanctioned parties.
  • Report any matches or suspicious activities to the relevant Comorian authorities (e.g., CENTIF).
• Legal Reference: UN Security Council Resolutions (e.g., UNSCR 1267, 1373, 1718, etc.) are binding on all UN member states.
  • UN Sanctions Lists: https://www.un.org/securitycouncil/sanctions/information

b. OFAC (U.S. Department of the Treasury's Office of Foreign Assets Control) Sanctions Compliance:

• Requirements: OFAC sanctions apply to:
  • U.S. persons wherever they are located (U.S. citizens, permanent residents, entities incorporated in the U.S., and their foreign branches).
  • All transactions touching the U.S. financial system or involving U.S. dollar clearing.
  • Transactions with Specially Designated Nationals (SDNs) and Blocked Persons, regardless of the currency or location.
• VASP Obligations: Any VASP in Comoros dealing with U.S. persons, U.S. dollars, or facilitating transactions that route through the U.S. financial system, or dealing with global crypto platforms that have U.S. nexus, must:
  • Screen all customers and transactions against the SDN List and other OFAC sanctions lists.
  • Block (freeze) virtual assets of SDNs and other sanctioned persons/entities and report the blocking to OFAC.
  • Reject (prohibit) transactions that violate OFAC sanctions and report them.
  • Implement robust geo-blocking measures for sanctioned jurisdictions.
• Legal Reference: Various U.S. Executive Orders and statutory authorities.
  • OFAC SDN List: https://ofac.treasury.gov/specially-designated-nationals-list-data-formats
  • OFAC Virtual Currency Guidance: https://ofac.treasury.gov/media/13217/download?inline

c. EU Sanctions Compliance:

• Requirements: EU sanctions apply to:
  • EU nationals wherever they are located.
  • Entities incorporated or constituted under the law of an EU Member State.
  • Economic activities carried out in whole or in part within the territory of the EU.
• VASP Obligations: If a VASP in Comoros has any connection to the EU (e.g., EU-based customers, partners, or uses EU-based service providers), it must:
  • Screen customers and transactions against the EU Consolidated Sanctions List.
  • Freeze assets of designated persons/entities and report to relevant EU national competent authorities.
  • Comply with any specific prohibitions (e.g., restrictions on services to certain entities or regions).
• Legal Reference: Various EU Regulations and Decisions.
  • EU Sanctions Map (Consolidated List): https://sanctions-map.eu/

2. Comoros Domestic Legal Framework for AML/CFT and Sanctions

Comoros has implemented an Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) framework that serves as the primary legal basis for sanctions compliance for financial institutions and, by extension, would apply to VASPs if they are regulated as such.

a. Key Legislation:

• Law N° 08-013/AF of 2008 on Anti-Money Laundering and Combating the Financing of Terrorism: This is the foundational AML/CFT law in Comoros, based on FATF recommendations. It mandates financial institutions (which would likely encompass regulated VASPs) to implement customer due diligence, suspicious transaction reporting, and compliance with international sanctions.
  • Note: While finding the direct URL for the specific, most recent version of this law in English from a Comorian government source can be challenging, its existence and purpose are consistently referenced by international bodies like the IMF and ESAAMLG.
  • Reference (ESAAMLG mentioning Comoros' framework): https://www.esaamlg.org/index.php/member-countries/comoros (Comoros is a member of the Eastern and Southern Africa Anti-Money Laundering Group).
• Central Bank of Comoros (Banque Centrale des Comores - BCC) Regulations: The BCC may issue circulars or regulations that further elaborate on AML/CFT obligations for financial service providers, which could be extended to VASPs.
  • BCC Website: https://www.banquecentrale.km/ (Check for official publications under "Publications" or "Textes Législatifs et Réglementaires").

b. Competent Authority:

• Cellule Nationale de Traitement des Informations Financières (CENTIF) - National Financial Information Processing Unit: This is Comoros' Financial Intelligence Unit (FIU). It is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial intelligence related to money laundering and terrorist financing.
  • VASPs (if covered by the AML/CFT law) would be obligated to report suspicious transactions, including those related to sanctions violations, to CENTIF.

3. Sanctioned Entity Screening Obligations for VASPs

Based on the above, VASPs operating in Comoros are expected to implement robust screening procedures:

• Customer Due Diligence (CDD) and Know Your Customer (KYC): Mandatory identification and verification of all customers and beneficial owners.
• Sanctions List Screening: Continuous screening of all customers, beneficial owners, and, where feasible, transaction counterparties against:
  • UN Consolidated Sanctions List
  • OFAC Specially Designated Nationals (SDN) and other sanctions lists
  • EU Consolidated Sanctions List
• Adverse Media Screening: Checking for any public information linking customers to illicit activities or sanctioned entities.
• Transaction Monitoring: Implementing systems to detect unusual or suspicious transaction patterns, including those that might indicate sanctions evasion (e.g., unusual geographies, high-risk counterparties, structuring transactions).
• Source of Funds/Wealth: Understanding the origin of virtual assets and funds to mitigate ML/TF and sanctions risks.

4. Geographic Restrictions

Sanctions regimes impose restrictions on dealing with specific countries or regions. VASPs must implement geographic restrictions, including:

• Prohibition on transactions with sanctioned jurisdictions: This includes countries subject to comprehensive UN, OFAC, or EU embargoes (e.g., North Korea, Iran, Cuba, certain regions in Ukraine/Russia).
• Geo-blocking: Implementing technological controls to prevent access to services from sanctioned IP addresses or jurisdictions.
• Enhanced Due Diligence: For transactions involving high-risk jurisdictions not under full embargo, but known for ML/TF risks (e.g., those on FATF grey or black lists), VASPs should apply enhanced CDD.

5. Penalties for Violations

Violations of AML/CFT laws and sanctions obligations in Comoros typically carry severe penalties, as outlined in Law N° 08-013/AF of 2008 and subsequent amendments. These can include:

• Fines: Substantial monetary penalties for individuals and legal entities.
• Imprisonment: For individuals involved in serious breaches, especially related to terrorist financing or money laundering.
• Asset Forfeiture: Seizure and forfeiture of assets involved in or derived from illicit activities.
• Reputational Damage: Significant harm to the VASP's brand and trust.
• Revocation of Licenses: If a VASP is operating under any form of financial service license, severe violations could lead to its revocation.
• Exclusion from Financial System: VASPs found in violation could be cut off from correspondent banking relationships and other financial services.

6. Country-Specific Sanctions Lists for Crypto

Comoros does NOT maintain its own independent, internationally recognized sanctions list specifically targeting individuals or entities for crypto-related activities.

Instead, Comoros' domestic framework for combating financial crime and terrorism relies on and implements:

• UN Sanctions Lists: These are directly incorporated into Comorian law through decrees or regulations.
• FATF Standards: Comoros, through its membership in ESAAMLG, is committed to implementing the Financial Action Task Force (FATF) recommendations, which include guidance on virtual assets and VASPs. This means that while Comoros may not have its own list, it will adhere to international standards for identifying and sanctioning entities involved in illicit finance, including the misuse of crypto.

Current Status of Crypto Regulation in Comoros: It's important to note that as of late 2023/early 2024, Comoros has not established a comprehensive, dedicated regulatory framework for licensing and overseeing VASPs distinct from general financial services. The legal status of cryptocurrencies themselves can vary. However, even in the absence of specific crypto-VASP licensing, the general AML/CFT laws and international obligations against financing terrorism and proliferation (which encompasses sanctions compliance) would still apply to any entity facilitating value transfer, including virtual assets. Any financial innovation, even if not explicitly regulated, is expected to adhere to core AML/CFT principles.

In summary, VASPs in Comoros must primarily focus on complying with UN sanctions, and depending on their operational reach and customer base, also with OFAC and EU sanctions, by implementing robust KYC, screening, and transaction monitoring procedures as mandated by Comoros' general AML/CFT laws.