Remote VASP serving residents in Eswatini

AML/CFT Registration: Eswatini, as a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), is committed to implementing FATF standards. This typically means that VASPs, including those providing custody, are required to be registered or licensed with the FIU or a designated authority for AML/CFT compliance. This registration focuses on identifying the VASP, its beneficial owners, and ensuring it has robust AML/CFT policies and procedures.

Prevention of Organised Crime Act (POCA) & FIU Act: The primary legislation addressing AML/CFT in Eswatini includes the Prevention of Organised Crime Act and the Financial Intelligence Unit Act. These acts, along with their accompanying regulations, are the most likely place where definitions of "virtual assets" and "VASPs" and their reporting obligations would be found. While specific details on custody per se might be absent, the entity providing custody would be subject to VASP AML/CFT obligations.

Legal Basis in Eswatini: Eswatini's AML/CFT laws, notably the Prevention of Organised Crime Act, 2018, and the Money Laundering and Financing of Terrorism (Prevention) Act, 2011 (as amended), mandate compliance with these international obligations. The Financial Intelligence Unit (FIU) of Eswatini is responsible for ensuring the implementation of these measures.

United Nations (UN) Sanctions:

ISIL (Da'esh) & Al-Qaida Sanctions List: Maintained by the 1267/1989/2253 Committee.

Taliban Sanctions List: Maintained by the 1988 Committee.

Other UN Sanctions Regimes: Pertaining to specific countries (e.g., Democratic People's Republic of Korea, Iran, Libya, Yemen, etc.) and individuals/entities associated with violations of peace and security.

Jurisdictional Nexus: A VASP in Eswatini becomes subject to OFAC sanctions if:

No, not yet comprehensively adopted for Virtual Asset Service Providers (VASPs).

Eswatini's legislative and regulatory framework for virtual assets (VAs) and virtual asset service providers (VASPs) is still developing and considered significantly deficient by the FATF. The country has not yet effectively implemented the FATF Recommendations 15 (on new technologies) and 16 (the Travel Rule, adapted for VAs) at an operational level.

Currently, VASPs are not effectively covered under a specific, dedicated regulatory regime in Eswatini. The absence of a clear legal framework means that obligations, including the Travel Rule, cannot be systematically applied to them.

The FATF reports indicate that VASPs are not yet defined, licensed, registered, or supervised for AML/CFT purposes in Eswatini.

Date: January 28, 2021 (This statement set the initial tone for recent years)

Outcome: Cautioned the public about the risks of virtual assets, stated that they are not legal tender, and advised financial institutions to exercise extreme caution in dealing with virtual assets, warning that they are not currently regulated in Eswatini.

An investment of money or assets: The investor commits capital to acquire the token.

In a common enterprise: The investment is pooled with others, or the value of the token is tied to a broader project or business venture managed by others.

With an expectation of profits: The investor anticipates financial gain (e.g., capital appreciation, dividends, revenue sharing, or other forms of return) from holding the token.

Derived solely or substantially from the efforts of others: The profits are expected to come from the managerial or entrepreneurial efforts of a third party (the issuer, promoter, or other entities), rather than the investor's own efforts.

Certain Utility Tokens: While typically designed to provide access to a product or service, a utility token can be reclassified as a security if:

Licensed Trading Platforms: Trading would likely need to occur on an exchange or platform licensed and regulated by the FSRA as a securities exchange. Unregulated trading platforms would be illegal for securities.

Prospectus Requirements: For public offerings of securities, a comprehensive prospectus must be prepared and registered with the FSRA. This prospectus must disclose all material information relevant to the investment, risks, and the issuer.

Licensing: Issuers, promoters, or financial intermediaries involved in offering or distributing securities may need to be licensed by the FSRA as financial services providers (e.g., investment advisors, brokers, collective investment scheme managers).

FATF Recommendations: Eswatini, through its membership in ESAAMLG, is expected to continue enhancing its legal framework to fully comply with FATF Recommendation 15 on new technologies and Virtual Asset Service Providers (VASPs). This implies that future amendments or new regulations could introduce more specific requirements for VASPs, which might eventually encompass more detailed aspects of custody.