Custodial wallet / SaaS in Namibia

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.

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

Regulator Name: Bank of Namibia (BoN)

Regulator Name: Namibia Financial Institutions Supervisory Authority (NAMFISA)

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.

Financial Intelligence Centre (FIC) Namibia

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:

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.

"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.