Remote VASP serving residents in Holy See

Exchanges: Entities facilitating the exchange between virtual assets and fiat currencies, or between different forms of virtual assets, would be classified as VASPs.

Custody Providers: Entities providing safekeeping or administration of virtual assets or instruments enabling control over virtual assets would be classified as VASPs.

Payment Processors (dealing with VAs): Entities involved in the transfer of virtual assets or providing services related to the issuance/sale of virtual assets would also fall under the VASP definition.

Notification/Registration with ASF: Informing the ASF of the intent to engage in virtual asset activities.

Demonstrating Compliance: Providing documentation to the ASF detailing how the institution will comply with all relevant AML/CFT obligations, including risk assessments, policies, procedures, and internal controls specific to virtual assets.

Ongoing Supervision: Remaining subject to ongoing supervision by the ASF, including regular reporting and audits.

Law No. CCXI (2018): On the prevention and countering of money laundering and terrorist financing.

Resolution No. 16/2022 on Virtual Assets:

Local Presence: While there isn't a specific "local presence" requirement for external crypto businesses to set up shop (as this is not the Holy See's regulatory focus), any entity operating under its jurisdiction (e.g., Vatican banks or financial institutions) is, by definition, locally present. For foreign entities, the question of "local presence" is generally moot, as the Holy See is not seeking to attract such entities.

Licensing/Registration: VASPs are required to be authorized or registered by ASIF before commencing operations.

Identification and Verification:

Ongoing Monitoring: Conduct ongoing monitoring of the business relationship and transactions undertaken throughout the course of the relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes scrutiny of transactions and the source of funds where necessary.

Source of Funds/Wealth: For higher-risk situations, VASPs must inquire about the source of funds and wealth of the customer.

Politically Exposed Persons (PEPs): Implement additional measures for customers who are PEPs, their family members, or close associates.

High-Risk Jurisdictions: Apply EDD to business relationships and transactions involving countries identified by FATF or ASIF as high-risk.

Complex or Unusual Transactions: Scrutinize transactions that are unusually large, complex, or have no apparent economic or lawful purpose.

New Technologies/Products: Evaluate the risks associated with new technologies or products, particularly those that might favor anonymity.

Non-Face-to-Face Relationships: Apply specific and adequate measures to compensate for the higher risk of non-face-to-face relationships.

"Travel Rule" for VA Transfers: Decree No. CCCLVI implements the FATF "Travel Rule," requiring VASPs to obtain, hold, and transmit originator and beneficiary information for VA transfers above a certain threshold (typically equivalent to EUR 1,000, but may be subject to specific ASIF instructions).

VASPs are obligated to report suspicious transactions to ASIF (acting as the FIU) without delay if they know, suspect, or have reasonable grounds to suspect that funds (including virtual assets) are proceeds of crime or are linked to terrorist financing.

When a VASP conducts a VA transfer for an originator (or to a beneficiary), it must collect and transmit the required information, regardless of the value of the transaction.

Collect the required originator and beneficiary information accurately.

Store this information securely.

Transmit this information securely and reliably to the beneficiary VASP (or make it available upon request).

Administrative Sanctions: Fines imposed by ASIF, revocation or suspension of licenses, and other supervisory measures.

Criminal Penalties: Imprisonment and significant monetary fines for serious violations, particularly those related to money laundering, terrorist financing, or other financial crimes. These are outlined in the Holy See's Criminal Code and specific AML/CFT laws.

Robust AML/CTF Framework: The Holy See has significantly strengthened its anti-money laundering (AML) and counter-terrorist financing (CTF) framework in recent years, under the supervision of its financial intelligence and supervisory authority, the Autorità di Supervisione e Informazione Finanziaria (ASIF). This includes complying with international standards set by the Financial Action Task Force (FATF) and undergoing evaluations by MONEYVAL (the Council of Europe's AML body).

Low Cryptocurrency Activity: The Vatican City State is a unique, extremely small sovereign entity with a highly specialized financial system primarily focused on managing the assets of the Catholic Church and its charitable works, as well as supporting its diplomatic missions. It is not a center for commercial cryptocurrency activity or innovation.

Regulatory Preparedness (Not Enforcement): While there haven't been enforcement actions, ASIF has issued guidance and regulations acknowledging the risks associated with virtual assets (cryptocurrencies). This indicates preparedness rather than a history of specific enforcement cases.