North Macedonia -- Travel Rule Implementation Regulatory Overview

North Macedonia has made significant progress in implementing the FATF Travel Rule for virtual assets, largely bringing its legal framework into compliance with international standards.

Here's a detailed breakdown:

1. Adoption and Effective Date

• Adopted: Yes, the FATF Travel Rule (Recommendation 16, as applied to virtual assets) has been adopted in North Macedonia.
• Legislation: The primary legislation is the Law on Prevention of Money Laundering and Terrorist Financing (LPPMLTF) (Закон за спречување перење пари и финансирање тероризам).
  • Key amendments that introduced and refined the virtual asset provisions, including the Travel Rule, were made through various revisions, particularly those in December 2021 (Official Gazette No. 297/21) and subsequent updates.
  • Effective Date: While the law and its amendments have come into force at different stages, the core virtual asset service provider (VASP) and Travel Rule obligations largely became effective for regulated entities around early 2022. The MONEYVAL 4th Enhanced Follow-Up Report (December 2023) confirms that North Macedonia has addressed the technical compliance deficiencies related to FATF Recommendations 15 (New Technologies) and 16 (Wire Transfers, including VA transfers).

2. Threshold Amounts

• No De Minimis Threshold for VASP-to-VASP Transfers: Consistent with FATF guidance, for transfers of virtual assets between obliged entities (VASPs), there is generally no de minimis threshold for the required originator and beneficiary information to be transmitted. The full Travel Rule information must be collected and transmitted regardless of the amount.
• Other Thresholds (Contextual): While not a direct Travel Rule threshold, other AML/CFT obligations in the LPPMLTF, such as enhanced due diligence requirements, may be triggered by transactions exceeding certain amounts (e.g., EUR 1,000 or EUR 15,000 for specific cash transactions or occasional transactions, as per standard FATF R.10 triggers, which can be applied analogously by VASPs in certain contexts). However, for the information transmission aspect of the Travel Rule itself, for VASP-to-VASP, it is typically without a de minimis.

3. Which VASPs Are Covered

The LPPMLTF defines "providers of services related to virtual assets" as obliged entities, subject to AML/CFT requirements, including the Travel Rule. This definition generally covers a broad range of entities consistent with FATF recommendations, including but not limited to:

• Exchanges between virtual assets and fiat currencies.
• Exchanges between one or more forms of virtual assets.
• Transfers of virtual assets.
• Custody 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.

4. Technical Implementation Requirements

The LPPMLTF, in line with FATF Recommendation 16 for virtual assets, mandates that VASPs must:

• Collect Required Information:
  • Originator Information: Name, account number (or unique transaction identifier), physical address, national identity number (or customer identification number), date and place of birth (or legal entity registration number for corporate originators).
  • Beneficiary Information: Name, account number (or unique transaction identifier).
• Transmit Required Information: VASPs must obtain and transmit this information to the beneficiary VASP, or to the beneficiary itself if they are using an unhosted wallet.
• Retention: VASPs must retain the collected information for a prescribed period (typically 5-10 years, as per general AML record-keeping rules).
• No Specific Technology Mandate: Like most jurisdictions, North Macedonia's law does not mandate a specific technical solution (e.g., TRISA, TRAVELER, Sygna). VASPs are expected to choose and implement a solution that allows them to securely and effectively collect, transmit, and store the required information in a compliant manner. The emphasis is on what information needs to be transmitted, not how it is technically done, as long as it meets security and data protection standards.

5. Penalties for Non-Compliance

The LPPMLTF includes provisions for administrative and potentially criminal penalties for non-compliance with its obligations, including those related to virtual assets and the Travel Rule. Penalties typically include:

• Administrative Fines: Substantial monetary fines can be imposed on the VASP (legal entity) and/or responsible individuals within the VASP's management. These fines can vary depending on the severity and recurrence of the breach.
• Withdrawal of Licenses/Registrations: Supervisory authorities may suspend or revoke a VASP's license or registration if there are serious or repeated breaches of AML/CFT obligations.
• Other Supervisory Measures: These can include public reprimands, imposition of specific compliance measures, increased supervisory oversight, or orders to cease certain activities.
• Criminal Charges: In cases of severe or intentional non-compliance, particularly if linked to actual money laundering or terrorist financing activities, individuals responsible could face criminal charges and imprisonment.

References:

• Law on Prevention of Money Laundering and Terrorist Financing (LPPMLTF):

  • Official Gazettes (Службен весник на Република Северна Македонија): The most recent consolidated version should be sought. Relevant amendments were published in various issues, notably No. 297/21 of 23.12.2021. While a direct English translation of the latest consolidated version might not be easily accessible online through an official government portal, the Macedonian versions are available.
  • A search on the official gazette website: https://slvesnik.com.mk/ (You would need to search for "Закон за спречување перење пари и финансирање тероризам").

• MONEYVAL Reports on North Macedonia: These reports provide detailed analysis of North Macedonia's compliance with FATF Recommendations.

  • MONEYVAL 4th Enhanced Follow-Up Report (December 2023): This report specifically notes improvements in compliance ratings for R.15 and R.16.
    • Available on the Council of Europe/MONEYVAL website: https://www.coe.int/en/web/moneyval/-/moneyval-publishes-fourth-enhanced-follow-up-report-on-north-macedonia
    • (Look for the direct PDF link within the page for the full report).

These resources confirm that North Macedonia has a robust legal framework in place for virtual assets and the Travel Rule, aligning with international standards.