Crypto ATM / kiosk operator in Namibia

Financial Intelligence Act, 2012 (Act No. 13 of 2012) as amended by the Financial Intelligence Amendment Act, 2017 (Act No. 2 of 2017): This is the cornerstone of Namibia's AML/CFT framework. It establishes the Financial Intelligence Centre (FIC), defines money laundering and terrorist financing offenses, sets out reporting obligations, and outlines due diligence requirements for accountable institutions.

Identification and Verification of Customers:

Natural Persons: Obtain full name, date of birth, residential address, nationality, identification number (e.g., national ID, passport). Verify identity using reliable, independent source documents, data, or information (e.g., government-issued ID, utility bills).

Legal Persons/Arrangements (Companies, Trusts): Obtain name, legal form, proof of existence, powers that regulate and bind the legal person/arrangement, and the names of relevant persons holding senior management positions.

Beneficial Ownership: Identify and verify the identity of the beneficial owner(s) of the customer, ensuring that VASPs understand the ownership and control structure of the customer. This involves identifying the natural person(s) who ultimately own or control the customer, and/or on whose behalf a transaction is being conducted.

Purpose and Nature of Business Relationship: Understand the purpose and intended nature of the business relationship or occasional transaction.

Ongoing Monitoring: Conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Enhanced Due Diligence (EDD): Apply EDD in higher-risk situations, which typically include:

Politically Exposed Persons (PEPs).

Customers from high-risk geographic areas (as identified by FATF or FIC).

Complex, unusually large transactions, or unusual patterns of transactions that have no apparent economic or lawful purpose.

Relationships with shell companies.

Transactions involving new technologies or products that favor anonymity.

Travel Rule: Although specific regulations may be pending, consistent with FATF Recommendation 16 (the "Travel Rule"), VASPs should be prepared to obtain and transmit required originator and beneficiary information for virtual asset transfers above a certain threshold (typically EUR/USD 1,000 or equivalent).

Reporting Threshold: There is no monetary threshold for reporting suspicious transactions. Any transaction (or attempted transaction) that gives rise to a suspicion of money laundering or terrorist financing, regardless of the amount, must be reported.

Content of Report: The report must include all relevant information known to the VASP regarding the customer, the transaction, and the reasons for suspicion.

"No Tipping-Off": VASPs and their employees are strictly prohibited from disclosing to the customer or any third party that an STR has been, or will be, submitted.

Customer Identification Records: Copies of all documents used for customer identification and verification (e.g., ID cards, passports, utility bills, company registration documents).

Transaction Records: Details of all transactions conducted by the VASP, including amounts, types of virtual assets, dates, sender and recipient information, and any associated messages. This includes both successful and attempted transactions.

Business Relationship Records: Records pertaining to the establishment and duration of business relationships.

Analysis and Decision Records: Records of any internal analysis undertaken regarding suspicious activity, and decisions made regarding whether or not to file an STR.

STRs Submitted: Copies of all suspicious transaction reports filed with the FIC.

Financial Intelligence Centre (FIC) Namibia

Issuing warnings and consumer advisories about the risks associated with cryptocurrencies due to their unregulated nature.

Developing a regulatory framework for virtual assets, which is still in progress.

Regulator Name: Bank of Namibia (BoN)

June 15, 2022: The BoN issued a comprehensive position paper on Virtual Assets and Virtual Asset Service Providers (VASPs).

Outcome: The position paper clarified that, while the BoN had previously not recognized crypto assets, it now acknowledges them but only for specific purposes and with strong warnings. It confirmed that VASPs are not regulated by the BoN under existing laws and reiterated the high risks. It also signaled the intent to develop a robust regulatory framework.

Significance: This was a pivotal moment, moving from non-recognition to acknowledging the existence and potential future regulation of virtual assets, while emphasizing current risks. It set the stage for future legislation.

Entity Targeted: General public and unregulated entities dealing in crypto assets. No specific private entity was targeted for enforcement. Violation Type: N/A (as no specific enforcement action was taken against an entity). The BoN's actions focused on addressing the unregulated nature of virtual assets and the associated risks. Penalty Amount: N/A (no penalty issued).

Regulator Name: Namibia Financial Institutions Supervisory Authority (NAMFISA)

Date: NAMFISA has consistently issued advisories and warnings, often in conjunction with the BoN's stance. For example, in late 2022 / early 2023, they highlighted investment fraud risks, including those involving digital assets.

Outcome: To educate the public about the risks of unregulated investment schemes, including those masquerading as cryptocurrency opportunities, emphasizing that these schemes are not licensed or supervised by NAMFISA.

Significance: These warnings complement the BoN's efforts to protect consumers in an unregulated space.

Financial Intelligence Regulations, 2017: These regulations provide further details and procedures for implementing the Financial Intelligence Act.