Tanzania -- AML/CFT Compliance Regulatory Overview

**The Anti-Money Laundering Act (AMLA), 2006 (as amended):** This is the principal legislation establishing the legal framework for combating money laundering. It defines "financial institutions" and "other reporting institutions" and imposes obligations on them. While VASPs may not be explicitly listed, their activities are likely to be interpreted as falling under the scope of financial services or other reporting obligations.

**The Anti-Money Laundering Regulations, 2012 (as amended):** These regulations provide detailed rules and procedures for implementing the AMLA, including customer due diligence, suspicious transaction reporting, and record-keeping.

**The Anti-Terrorism Act, 2002 (as amended):** This act provides the legal framework for combating terrorism financing.

**Identification and Verification of Customers:**

**Natural Persons:** Collecting and verifying full legal name, date of birth, residential address, nationality, national identification number (e.g., National ID, passport, driver's license). Verification should be done using reliable, independent source documents, data, or information.

**Legal Entities (Companies, Partnerships, etc.):** Collecting and verifying official name, registration number, address of registered office, names of directors/partners, legal form, proof of existence (e.g., certificate of incorporation).

**Beneficial Ownership:** Identifying and verifying the identity of the ultimate beneficial owner(s) of the virtual assets or the entity, ensuring that the VASP knows who ultimately owns or controls the funds/assets.

**Purpose and Intended Nature of the Business Relationship:** Understanding the purpose and intended nature of the customer's virtual asset activities and the business relationship.

**Ongoing Monitoring:** Continuously monitoring the business relationship and transactions undertaken by the customer to ensure that they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes monitoring for unusual or suspicious activities.

**Enhanced Due Diligence (EDD):** Applying EDD for higher-risk situations, which may include:

Transactions involving Politically Exposed Persons (PEPs).

Customers from high-risk jurisdictions (as identified by FATF or local authorities).

Complex, unusually large transactions, or unusual patterns of transactions that have no apparent economic or lawful purpose.

New technologies or products that favor anonymity, which is often a characteristic of some virtual asset transactions.

**Obligation to Report:** Any VASP, or its employees, that knows or suspects that a transaction (or attempted transaction) involves funds or virtual assets derived from illegal activity, or is related to money laundering or terrorism financing, must report it.

**What Constitutes Suspicion:** Suspicion can arise from various factors, including unusual transaction patterns, inconsistent customer information, lack of clear economic purpose, or involvement of high-risk jurisdictions.

**Reporting Mechanism:** Reports must be submitted to the FIU Tanzania promptly and without delay, typically through a prescribed format (e.g., an online portal or specific form).

**No Tipping-Off:** VASPs and their employees are prohibited from "tipping-off" customers or third parties that an STR has been or will be submitted.

**Duration:** All records must be kept for a minimum period of **five (5) years** after the business relationship has ended or after the date of the transaction.

All customer identification and verification data.

Business correspondence related to the customer relationship.

Records of all virtual asset transactions, including transaction dates, amounts, types of virtual assets, sending and receiving addresses (if applicable), and originating/beneficiary information.

Records of all suspicious transaction reports filed.

Records of internal policies and procedures for AML/CFT compliance.

**Accessibility:** Records must be maintained in a manner that allows for easy retrieval by competent authorities upon request.

**Financial Intelligence Unit (FIU Tanzania):** This is the primary body responsible for receiving, analyzing, and disseminating suspicious transaction reports and financial intelligence related to money laundering and terrorism financing. The FIU also provides guidance on AML/CFT compliance.

**Bank of Tanzania (BoT):** As the central bank, BoT is the primary regulator for financial institutions and is responsible for overall financial sector stability and supervision. While they have historically been cautious regarding crypto, any future formal licensing or prudential regulation of VASPs would likely fall under their purview. They have also indicated an openness to exploring virtual assets, which may lead to a more defined regulatory stance.

**Evolving Landscape:** The regulatory environment for virtual assets is dynamic globally and locally. VASPs should continuously monitor for new laws, regulations, or guidance from Tanzanian authorities.

**Risk-Based Approach:** VASPs are expected to implement a risk-based approach to AML/CFT, meaning they should assess their specific risks (customer type, products, services, delivery channels, geographical areas) and apply controls commensurate with those risks.

**FATF Standards:** Tanzania is expected to align with the recommendations of the Financial Action Task Force (FATF), particularly FATF Recommendation 15 on New Technologies and its Interpretive Note on Virtual Assets and VASPs. This means adhering to the "travel rule" (which requires VASPs to obtain and transmit originator and beneficiary information for virtual asset transfers) and having a robust internal compliance program.

**Legal Counsel:** Given the evolving nature and the lack of highly specific VASP legislation, it is highly advisable for any VASP operating or intending to operate in Tanzania to seek local legal counsel specializing in financial regulation and AML/CFT to ensure full compliance.

**The Anti-Money Laundering Act, 2006 (as amended):** This is the primary law combating money laundering. It designates "reporting persons" (financial institutions and certain non-financial businesses and professions) who are obliged to implement customer due diligence (CDD), record-keeping, transaction monitoring, and suspicious transaction reporting (STR) measures. While VASPs may not be explicitly listed, if they offer services that fall under the broader definitions of financial services or property, they could be captured.

**The Prevention of Terrorism Act, 2002 (as amended):** This act provides the legal framework for combating terrorism financing, including measures for freezing assets of designated terrorist organizations and individuals.

**Bank of Tanzania (BOT):** The central bank, responsible for monetary policy and financial sector regulation. It has issued warnings regarding crypto assets but has also explored potential regulatory approaches.

**Financial Intelligence Unit (FIU):** The national center for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial information related to money laundering and terrorist financing.

**Current Stance on Crypto:** The BOT has generally maintained a cautious stance, warning the public about the risks associated with investing in and using cryptocurrencies, often citing their speculative nature, volatility, and lack of regulation. In 2021, the former President hinted at the need to prepare for and potentially regulate crypto, but concrete steps for a full regulatory framework for VASPs are still pending.

**Implication for Crypto (if permitted/regulated):** If VASPs were to operate under a formal regulatory framework in Tanzania, they would be designated as "reporting persons" and would be subject to:

**Customer Due Diligence (CDD) and Know Your Customer (KYC):** Identifying and verifying the identity of customers and beneficial owners.

**Ongoing Transaction Monitoring:** Scrutinizing transactions for suspicious activity.

**Sanctions Screening:** Screening customers and transactions against national and international sanctions lists.

**Suspicious Transaction Reporting (STR):** Reporting any suspicious activities or transactions to the FIU.

**Record-Keeping:** Maintaining records for a prescribed period.

**The Anti-Money Laundering Act, 2006 (and amendments):** Available through Tanzania's Parliament website or legal databases. (Example via National Assembly: http://www.parliament.go.tz/polis/uploads/bills/1474278458-Bill%20No.3%20of%202019%20The%20Anti-Money%20Laundering%20(Amendment)%20Act,%202019.pdf%20Act,%202019.pdf) - Note: always check for the latest consolidated version)

**The Prevention of Terrorism Act, 2002 (and amendments):** (Similarly, via Parliament website)

**Bank of Tanzania Website:** https://www.bot.go.tz/

**Tanzania Financial Intelligence Unit (FIU) Website:** http://www.fiu.go.tz/