Chad -- Travel Rule Implementation Regulatory Overview

Chad, as a member of the Economic and Monetary Community of Central Africa (CEMAC) and the regional anti-money laundering body Groupe d'Action contre le Blanchiment d'Argent en Afrique Centrale (GABAC), is expected to implement the FATF Recommendations, including the Travel Rule.

While it can be challenging to find specific, publicly available national legislation for Chad directly addressing the "Travel Rule" by that exact name, the implementation occurs primarily through the regional CEMAC framework, which Chad is legally bound to adopt and enforce.

Here's the breakdown:

Status of FATF Travel Rule Implementation in Chad

1. Whether Adopted:

• 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.

2. Effective Date:

• 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.

3. Threshold Amounts:

• 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.

4. Which VASPs are Covered:

• 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.
  • Transfer 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.

5. Technical Implementation 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.

6. Penalties for Non-Compliance:

• 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.

References and Further Reading:

1. 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.
   • While a direct link to the full text isn't always stable, you can often find references or summaries on GABAC's website or other regional legal resources.
2. GABAC (Groupe d'Action contre le Blanchiment d'Argent en Afrique Centrale): The regional FATF-style body that oversees AML/CFT implementation in CEMAC states. Their website provides reports and guidance.
   • GABAC Official Website: https://www.gabac.org/ (You may need to navigate to "Publications" or "Textes Réglementaires" for relevant documents).
3. 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

Important Note: The implementation of these regulations, especially for a nascent sector like virtual assets, can be a phased and evolving process. While the legal framework is in place through CEMAC, the practical enforcement and the level of compliance by individual VASPs in Chad may vary. It is always recommended to consult legal professionals in Chad or the CEMAC region for the most current and specific advice.