DeFi protocol frontend in Trinidad and Tobago

Virtual Asset Business Act, 2022 (VABA, 2022): This is the foundational law for virtual assets and VASPs, defining what constitutes a "virtual asset" and "virtual asset business" and establishing the regulatory framework. It mandates licensing and compliance with AML/CFT obligations for VASPs.

Anti-Money Laundering and Countering the Financing of Terrorism Act, Chap 11:13: This is the overarching AML/CFT legislation that applies to all financial institutions, including VASPs under the VABA. It sets out the general requirements for AML/CFT compliance, including CDD, STRs, and record-keeping.

Proceeds of Crime Act, Chap 11:27: This Act criminalizes money laundering and the financing of terrorism, providing the legal basis for prosecuting such offenses and seizing assets.

Financial Intelligence Unit Act, Chap 72:01: This Act establishes the Financial Intelligence Unit (FIU) as the central national agency for receiving, analyzing, and disseminating suspicious transaction reports and other financial intelligence.

Identification and Verification of Customers:

For Individuals: Obtain and verify the customer's full legal name, date of birth, residential address, nationality, and a unique identification number (e.g., passport number, national ID card number). Verification must be done using reliable, independent source documents, data or information.

For Legal Persons/Arrangements (e.g., companies, trusts): Obtain and verify the legal name, principal place of business, registration number, articles of incorporation, bylaws, and other relevant constitutional documents.

Beneficial Ownership: VASPs must identify and take reasonable measures to verify the identity of the beneficial owner(s) of the customer, including for legal persons and arrangements. This involves understanding the ownership and control structure of the customer.

Purpose and Intended Nature of Business Relationship: Understand the purpose and intended nature of the business relationship or transaction (e.g., why is the customer using VASP services, what types of virtual assets will be involved, expected transaction volumes).

Ongoing Monitoring: Continuously monitor the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes keeping customer information and beneficial ownership up-to-date.

Politically Exposed Persons (PEPs): Implement enhanced scrutiny for customers who are PEPs (domestic or foreign) or their family members or close associates. This includes obtaining senior management approval for establishing business relationships with PEPs and taking reasonable measures to establish the source of wealth and source of funds.

Enhanced Due Diligence (EDD): Apply EDD in situations identified as high-risk, such as:

Trigger: Any VASP that knows, suspects, or has reasonable grounds to suspect that a transaction (attempted or completed), virtual asset, or funds are linked to money laundering, terrorist financing, or other criminal activity, must file an STR.

Reporting Body: Financial Intelligence Unit (FIU) of Trinidad and Tobago.

Timeline: Reports must be submitted promptly, typically within a few working days of forming the suspicion, and in accordance with FIU guidelines.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that an STR has been or will be filed, or that an investigation is being conducted.

Customer Records: All records obtained during CDD, including identification documents, verification data, beneficial ownership information, and the assessment of the purpose and nature of the business relationship.

Transaction Records: Detailed records of all virtual asset transactions, including the amount, type of virtual asset, date, time, originating and beneficiary addresses (or equivalent identifiers), and any other relevant transaction data. These records must be sufficient to reconstruct individual transactions.

Analysis Records: Records of any analysis undertaken concerning complex, unusual, or large transactions, and the findings of such analysis.

STRs: Copies of all suspicious transaction reports filed, along with supporting documentation.

Sanctioned Entity Screening Obligations:

Implement Robust Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures: This includes identifying and verifying the identity of customers and beneficial owners.

Screen against Sanctions Lists: Regularly screen customers, counterparties, and transactions against:

UN Consolidated Sanctions List: This is legally binding for T&T.

OFAC Specially Designated Nationals (SDN) List and other OFAC lists: Essential due to the dominance of the USD in global finance and the extraterritorial reach of OFAC.

EU Sanctions Lists: Important for similar reasons if dealing with EU counterparties or currencies.

Domestic Lists: Any individuals or entities designated under T&T's Anti-Terrorism Act or similar legislation.

Ongoing Monitoring: Continuously monitor transactions for red flags indicative of sanctions evasion or illicit activity.

Politically Exposed Persons (PEPs) Screening: Identify and apply enhanced due diligence to PEPs, their family members, and close associates, as PEPs often present a higher risk for corruption and sanctions evasion.

Imprisonment: Individuals found guilty of offences under the Anti-Terrorism Act or Proceeds of Crime Act can face significant prison sentences. For example, terrorism financing offences carry terms of imprisonment of up to 25 years.

Fines: Substantial monetary penalties can be imposed on both individuals and corporate entities.

Asset Forfeiture: Proceeds of crime, including virtual assets, can be confiscated.

Public Advisories and Warnings: Educating the public about the risks associated with investing in or using cryptocurrencies.

Statements on Regulatory Stance: Clarifying that cryptocurrencies are not legal tender and are generally unregulated under existing financial services laws, which limits the scope for traditional "enforcement actions" against entities operating solely in this space unless they infringe on other laws (e.g., fraud, money laundering, unregistered securities offerings).

Regulator Name: Central Bank of Trinidad and Tobago (CBTT)

Entity Targeted: General Public, Financial Institutions. Violation Type: N/A (General warning about risks and unregulated status). Penalty Amount: N/A.

Key Points: The CBTT has consistently warned against the use of cryptocurrencies due to high volatility, potential for fraud, money laundering, lack of consumer protection, and the absence of regulatory oversight. They maintain that crypto assets are not legal tender in Trinidad and Tobago.

Regulator Name: Financial Intelligence Unit of Trinidad and Tobago (FIUTT)

FIUTT Annual Reports: These reports often contain sections detailing their work on emerging risks, including virtual assets and their associated AML/CFT challenges.

Regulator Name: Trinidad and Tobago Securities and Exchange Commission (TTSEC)