Remote VASP serving residents 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:

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.

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.

For cross-border virtual asset transfers: Information must accompany the transfer for transactions equal to or exceeding US$1,000 or €1,000 (or the equivalent in other currencies).

For domestic virtual asset transfers: Information must accompany the transfer for transactions equal to or exceeding US$3,000 or €3,000 (or the equivalent in other currencies).

Important Note: Regardless of the threshold, VASPs are required to collect and retain originator and beneficiary information for all virtual asset transfers, including those below the thresholds, and provide it to competent authorities upon request.

Collect and Transmit Required Information:

Secure Transmission: Ensure that the required information is transmitted securely and reliably with the virtual asset transfer.

Real-time or Near Real-time Availability: The information should be made available to the beneficiary VASP and competent authorities in a timely manner.

Record Keeping: Maintain records of all collected information for at least five years from the date of the transaction.

Interoperability: While no specific technology standard is mandated (e.g., TRISA, Shyft, OpenVASP), VASPs must implement solutions that allow them to fulfill the data transfer and record-keeping requirements in a secure and verifiable manner. They are expected to have robust systems for identity verification (KYC) and transaction monitoring (AML/CFT).

Operating Without a License:

For an individual: A fine of TTD $500,000 and imprisonment for five years.

For a body corporate: A fine of TTD $2,000,000.

Sanctioned Entity Screening Obligations:

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.

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.

Global Reach of Virtual Assets: Virtual asset transactions are inherently global. A VASP in T&T could inadvertently facilitate transactions with individuals or entities sanctioned by the US or EU, leading to secondary sanctions risks or enforcement actions by these foreign authorities if there's a nexus to their jurisdiction (e.g., a US person involved, US-domiciled technology, or USD stablecoins).

International Correspondent Banking: VASPs often rely on traditional financial institutions (banks) for fiat on-ramps/off-ramps, payroll, etc. These banks are almost universally subject to OFAC and EU sanctions due to their international operations, especially their dealings in USD or EUR. Non-compliance by a VASP could lead to banks de-risking or terminating services.

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

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

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.

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: Financial Intelligence Unit of Trinidad and Tobago (FIUTT)

Entity Targeted: Financial Institutions, Designated Non-Financial Businesses and Professions (DNFBPs), Public. Violation Type: N/A (Guidance on AML/CFT risks).