Chad -- AML/CFT Compliance Regulatory Overview

**CEMAC's Stance on Cryptocurrencies:** Chad is a member of the Economic and Monetary Community of Central Africa (CEMAC). The **Banque des États de l'Afrique Centrale (BEAC)**, which is the central bank for CEMAC member states, has historically taken a very restrictive stance on cryptocurrencies and virtual assets. Directives and circulars from the BEAC have effectively prohibited or severely restricted the use, trade, and even possession of cryptocurrencies within the CEMAC zone, citing concerns about financial stability, monetary policy sovereignty, and AML/CFT risks.

**Lack of Specific VASP Legislation:** While Chad has general AML/CFT legislation aligned with international standards (primarily driven by FATF recommendations and its regional body, GABAC), it lacks specific national legislation that explicitly licenses, regulates, or defines AML/KYC requirements for VASPs as a distinct category of financial institutions.

**Primary Legislation:** **Law N°004/PR/2020** modifying **Law N°006/PR/2010** on the Fight against Money Laundering and Terrorist Financing. This is the cornerstone legislation defining reporting obligations, predicate offenses, and the functions of the Financial Intelligence Unit.

**Implementing Decrees:** Various decrees further detail the application of the AML/CFT law.

**International Conventions:** Chad has ratified several international conventions related to AML/CFT, including the Palermo Convention, the Vienna Convention, and the International Convention for the Suppression of the Financing of Terrorism.

**Prohibition:** The Banque des États de l'Afrique Centrale (BEAC) has issued directives (e.g., circulars in 2022 and earlier) that effectively prohibit or severely restrict cryptocurrency activities within the CEMAC zone, including Chad. These directives aim to safeguard monetary stability and prevent financial crime risks.

**Implication for VASPs:** This means that, currently, legally establishing and operating a VASP in Chad is highly problematic, if not outright impossible. Any operations would be considered unauthorized and potentially illegal.

Carrying out occasional transactions above a certain threshold (e.g., EUR 1,000 equivalent for VASPs, as per FATF guidance).

There is a suspicion of money laundering or terrorist financing.

There are doubts about the veracity or adequacy of previously obtained customer identification data.

**Identification and Verification of Customer Identity:**

**Natural Persons:** Obtain full name, date of birth, place of birth, nationality, physical address, and a unique identification number (e.g., national ID card, passport number). Verification through reliable, independent source documents or data.

**Legal Entities:** Obtain legal name, legal form, proof of existence (e.g., registration certificate), physical address of operations, names of directors/authorized representatives, and identify beneficial owners.

**Identification of Beneficial Owners:** Take reasonable measures to understand the ownership and control structure of the customer and identify the natural persons who ultimately own or control the customer. This often involves identifying individuals holding 25% or more of shares or voting rights, or otherwise exercising control.

**Understanding the Purpose and Nature of the Business Relationship:** Obtain information on the intended purpose and nature of the customer's activities and the anticipated transactions.

**Ongoing Monitoring:** Continuously monitor the business relationship, including 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.

**Enhanced Due Diligence (EDD):** Apply EDD for higher-risk categories, which would typically include:

Customers from high-risk jurisdictions (as identified by FATF, GABAC, or national authorities).

Transactions without an apparent economic or lawful purpose.

Accounts with unusually high transaction volumes or values.

**Simplified Due Diligence (SDD):** May be applied in low-risk scenarios, as defined by regulations, but VASPs are generally considered higher risk by default.

**Obligation to Report:** VASPs would be legally obligated to report any suspicious transactions, attempts at transactions, or activities that give rise to a suspicion of money laundering or terrorist financing to Chad's Financial Intelligence Unit (FIU).

**No Tipping-Off:** VASPs and their employees are prohibited from informing the customer or third parties that a suspicious transaction report is being or has been made.

All customer identification data obtained through CDD.

Transaction records, including the amount, currency, type of virtual asset, date, and identities of the sender and recipient (Travel Rule considerations, if implemented for VASPs).

Records of suspicious transaction reports filed.

Records of analyses performed in support of suspicious transaction reporting.

**Internal Controls:** Implement internal policies, procedures, and controls to prevent ML/TF.

**Compliance Officer:** Appoint a designated compliance officer at the management level responsible for AML/CFT compliance.

**Training:** Provide ongoing AML/CFT training to relevant employees.

**Risk Assessment:** Conduct institutional risk assessments to identify and mitigate ML/TF risks.

**Name:** **Cellule Nationale de Traitement des Informations Financières (CENTIF)** - Tchad

**Role:** CENTIF is Chad's FIU. It receives, analyzes, and disseminates financial intelligence on suspected money laundering and terrorist financing to law enforcement agencies. It is responsible for ensuring compliance with AML/CFT obligations by reporting entities.

**GABAC (Groupe d'Action contre le Blanchiment d'Argent en Afrique Centrale):** https://gabac.org/ (Look for sections on member states or FIUs)

**Banque des États de l'Afrique Centrale (BEAC):** The central bank for CEMAC, crucial for monetary policy and financial stability, and currently the main body prohibiting virtual assets.

**Commission Bancaire de l'Afrique Centrale (COBAC):** The banking supervisory body for CEMAC.

**Relevance to Sanctions:** FATF Recommendations 6 and 7 specifically address targeted financial sanctions related to terrorism and proliferation financing. Recommendation 15 covers virtual assets and VASPs, urging countries to regulate and supervise VASPs for AML/CFT purposes, including sanctions compliance.

**KYC/CDD:** Robust customer identification and due diligence processes.

**Transaction Monitoring:** Ongoing monitoring of transactions for suspicious activities, including potential sanctions evasion.

**Suspicious Transaction Reports (STRs) / Suspicious Activity Reports (SARs):** Reporting of suspicious activities to Chad's FIU (if one is operational and relevant for crypto, given the BEAC prohibition).

**Travel Rule:** For VASPs operating legally elsewhere and transacting with Chadian nationals, they would be expected to implement the FATF "Travel Rule" by obtaining and transmitting originator and beneficiary information for crypto transfers above a certain threshold.

**Yes, indirectly through regional CEMAC legislation.** The CEMAC zone, guided by GABAC, has adopted a comprehensive anti-money laundering and combating the financing of terrorism (AML/CFT) framework that incorporates the updated FATF Recommendations, including those related to Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs).

The primary legal instrument is **Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 on the Prevention and Suppression of Money Laundering and Terrorist Financing in CEMAC Member States**, adopted on May 5, 2021. This regulation aligns with FATF Recommendation 15 (New Technologies) and Recommendation 16 (Wire Transfers, which now includes VA transfers or the "Travel Rule").

Chad, as a CEMAC member state, is obliged to transpose this regional regulation into its national law or directly apply it.

The **CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021** was adopted on **May 5, 2021**. Its provisions are generally effective from this date, though national implementation/transposition might involve additional steps and timeframes for VASPs to comply.

The CEMAC Regulation, following FATF Recommendation 16 and its Interpretive Note, requires VASPs to obtain and transmit required originator and beneficiary information for virtual asset transfers.

**For cross-border transfers:** The threshold is **EUR 1,000 (or equivalent in other currencies/VAs)**. Transfers below this threshold may still require information collection if there is a suspicion of money laundering or terrorist financing.

**For domestic transfers:** The FATF recommends a de minimis threshold of EUR/USD 1,000. However, countries have discretion regarding applying a threshold for purely domestic transfers, or to apply a lower or no threshold. The CEMAC regulation generally adopts the FATF standard, implying the EUR 1,000 threshold for virtual asset transfers.

The CEMAC Regulation defines VASPs broadly to align with FATF definitions. This includes any natural or legal person who, as a business, conducts one or more of the following activities for or on behalf of another natural or legal person:

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

Safekeeping 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 or sale of a virtual asset.

This means all entities operating in Chad (and other CEMAC states) that provide these services, whether centralized exchanges, brokers, custodians, or other platforms facilitating VA transfers, are subject to the requirements.

The CEMAC Regulation, like the FATF Recommendations it's based on, does not prescribe specific technical solutions for implementing the Travel Rule. Instead, it mandates that VASPs must have systems and procedures in place to:

**Collect:** The required originator and beneficiary information (name, account number/VA wallet address, physical address/national ID number/customer ID number, date and place of birth).

**Transmit:** This information to the beneficiary VASP during or before the transaction.

**Hold:** The collected information securely and make it available to competent authorities upon request.

**Screen:** Transactions for sanctions compliance and suspicious activity.

VASPs are expected to adopt interoperable solutions that allow for the secure and efficient exchange of this data between different VASPs globally.

The CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 (and its national transposition in Chad) outlines administrative and criminal penalties for non-compliance with AML/CFT obligations. These can include:

**Administrative sanctions:** Fines, suspension or revocation of licenses, and prohibition from holding management positions within financial institutions for individuals.

**Criminal sanctions:** Imprisonment and heavier fines for serious offenses, particularly those related to money laundering or terrorist financing facilitation.

The exact nature and severity of penalties would be detailed in the specific articles of the CEMAC Regulation and any corresponding Chad national legislation.

**CEMAC Regulation N°02/CEMAC/UMAC/CM/CJ/05-2021 (French):** This is the core document. Finding an official public URL can sometimes be difficult for CEMAC regulations, but it is widely cited by GABAC and other bodies. It can often be found through legal databases or GABAC reports.

**GABAC Official Website:** https://www.gabac.org/ (You may need to navigate to "Publications" or "Textes Réglementaires" for relevant documents).

**FATF Recommendations:** The foundational document that CEMAC/GABAC uses as its basis.

**FATF R.15 (New Technologies) & R.16 (Wire Transfers, including VA Transfers):** https://www.fatf-gafi.org/recommendations.html