Saint Vincent and the Grenadines

**The Proceeds of Crime Act, 2013 (as amended):** This act criminalizes money laundering and terrorist financing offenses and provides for the forfeiture of assets derived from criminal conduct.

**The Anti-Money Laundering and Combating the Financing of Terrorism Act, 2017 (as amended):** This is the principal legislation outlining the obligations for financial institutions and DNFBPs to prevent and detect money laundering and terrorist financing. It defines key terms, outlines reporting obligations, and sets out penalties for non-compliance.

**The Financial Intelligence Unit Act, 2001 (as amended):** This act establishes the Financial Intelligence Unit (FIU) and defines its powers and functions, including receiving and analyzing suspicious transaction reports.

**The Terrorism Prevention Act, 2002 (as amended):** This act provides for measures to prevent terrorism, including the freezing of terrorist assets.

**Identify and Verify Customer Identity:**

**For natural persons:** Obtain full name, residential address, date of birth, nationality, and a unique identification number (e.g., passport, national ID card). Verification typically requires independent, reliable source documents.

**For legal persons/entities:** Obtain legal name, address of registered office and principal place of business, incorporation details (e.g., certificate of incorporation, articles of association), and identify beneficial owners (those who ultimately own or control 25% or more of the entity).

**Understand the Purpose and Intended Nature of the Business Relationship:** Gather information about why the customer is seeking the services and how they intend to use them.

**Conduct Ongoing Monitoring:** Regularly review the business relationship and transactions undertaken to ensure they are consistent with the entity's knowledge of the customer, their business, and risk profile, including (where necessary) the source of funds.

**Risk-Based Approach:** Apply a risk-based approach to CDD.

**Enhanced Due Diligence (EDD):** Required for high-risk customers, such as Politically Exposed Persons (PEPs), customers from high-risk jurisdictions, or transactions involving complex structures or unusually large amounts. This involves more rigorous verification, deeper understanding of source of funds/wealth, and higher-level approval for establishing relationships.

**Simplified Due Diligence (SDD):** Permitted for low-risk customers, where sufficient information is available through public sources and the risk of ML/FT is assessed as low.

**Obligation to Report:** All reporting entities (which would include VASPs if their activities are considered relevant financial business) have a legal obligation to report any transaction (or attempted transaction) where there are reasonable grounds to suspect that funds are the proceeds of criminal activity or are linked to terrorist financing.

**Recipient:** Reports must be submitted to the **Financial Intelligence Unit (FIU)** of Saint Vincent and the Grenadines.

**Timeliness:** STRs must be filed promptly, "without delay," upon forming the suspicion.

**No Tipping-Off:** It is an offense to disclose to the customer or any third party that a suspicious transaction report has been or will be made.

**Customer Identification Data:** All documents used for CDD, including copies of identification documents and verification records.

**Transaction Records:** Details of all transactions, including amounts, types of currency/virtual assets, dates, and parties involved.

**Business Correspondence:** Records of communications with customers and third parties related to transactions and the business relationship.

**STRs and Internal Reports:** Copies of all suspicious transaction reports filed and any internal reports or analyses leading to such reports.

**Retention Period:** Records must generally be kept for a minimum of **five (5) years** after the business relationship has ended or after the date of the transaction.

**Role:** The SVG FSA is the primary financial regulator in Saint Vincent and the Grenadines. While it does not license VASPs specifically, it is responsible for the oversight of other financial institutions and can take action against entities operating without proper authorization or in violation of financial laws. It would likely provide guidance or interpretation regarding the applicability of general AML/CFT laws to new financial activities.

**Role:** The FIU is the central national agency responsible for receiving, analyzing, and disseminating suspicious transaction reports to competent authorities for investigation and prosecution of money laundering and terrorist financing offenses. VASPs (as reporting entities) would directly interact with the FIU for STR submissions.

**Seek independent legal counsel** specializing in SVG financial and AML law to ensure compliance with existing regulations and to understand potential future regulatory developments.

**Proactively implement robust internal AML/KYC policies and procedures** that meet international FATF standards, even in the absence of specific VASP regulations, to mitigate risks and demonstrate good faith compliance.

**Issuing public warnings:** Alerting the public about unlicensed entities or common scams that may falsely claim to be regulated in SVG.

**Revoking licenses or registrations:** For companies that fail to comply with regulations, often without a public announcement of the specific reasons or a penalty amount.

**Direct communication and directives:** Engaging directly with non-compliant entities to ensure remediation without a public enforcement notice.

**Focus on legislative compliance:** The emphasis has been heavily on implementing the VABA and ensuring VASPs operating in or from SVG register and comply with Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) obligations.

**Regulator:** Financial Services Authority (FSA)

**Focus:** Implementing the Virtual Asset Business Act, 2020 (VABA), and ensuring compliance with AML/CFT standards aligned with FATF recommendations.

**Nature of Actions:** Primarily focused on **warnings about unlicensed entities** and clarifying the scope of their regulation rather than public prosecution or substantial monetary penalties against specific, named entities for crypto-specific violations. The FSA frequently issues public notices clarifying that registration as an International Business Company (IBC) in SVG does **not** constitute a license to conduct crypto trading, forex trading, or operate as a bank.

**Regulator Name:** Financial Services Authority (FSA)

**Entity Targeted:** General public and entities falsely claiming to be regulated by the SVG FSA for virtual asset business.

**Violation Type:** Operating or advertising virtual asset business activities without proper licensing under the Virtual Asset Business Act, 2020 (VABA), or misrepresenting regulatory status.

**Penalty Amount:** Not applicable to general warnings; specific penalties for unlicensed operation would be determined if an investigation led to a formal enforcement action, which typically isn't publicly detailed.

**Date:** Ongoing, with several notices issued throughout the last three years. Specific dates vary, but the theme is consistent.

**Outcome:** Increased public awareness, pressure on unlicensed entities to cease operations or comply, and a clear stance from the regulator.

**Source URL (Example of a relevant notice type, though not crypto-specific, illustrating the FSA's warning approach):**

**FSA Public Notice - Warning on Unregulated Activities:** While this specific notice might predate the last 3 years and not be crypto-specific, the FSA regularly issues similar warnings. The most direct approach is to check the "Public Notices" section of the FSA website.

FSA SVG - Public Notices (You would need to scroll through recent notices for crypto-specific warnings, but these are often general about "unregulated activities" or "boiler room operations.")

**Entity Targeted:** All virtual asset service providers (VASPs) and the general public, including those considering operating in or from SVG.

**Violation Type:** N/A (this is a regulatory clarification, not an enforcement action itself). However, entities failing to register or comply with VABA would be in violation.

**Date:** The VABA came into force in 2021. Subsequent guidance and clarifications have been ongoing.

**Outcome:** Enhanced clarity on legal obligations for VASPs, driving compliance with registration requirements, AML/CFT measures, and consumer protection. This sets the stage for future enforcement by defining what constitutes a violation.

**Virtual Asset Business Act, 2020:**

**Virtual Asset Business Act, 2023:** This is the primary legislation governing Virtual Asset Service Providers (VASPs) in SVG. It came into force on December 1, 2023, and mandates licensing, AML/CFT compliance, and other obligations for VASPs.

**Proceeds of Crime and Money Laundering (Prevention) Act [Cap 182 Revised Edition 2009] (as amended):** This is the foundational anti-money laundering (AML) and counter-financing of terrorism (CFT) law, which criminalizes ML/TF and provides for asset freezing.

**Anti-Terrorism Act [Cap 180A Revised Edition 2009] (as amended):** This act specifically addresses terrorism financing and facilitates the implementation of UN Security Council Resolutions related to terrorism.

**Financial Intelligence Unit Act [Cap 180C Revised Edition 2009] (as amended):** Establishes the FIU as the national center for receiving, analyzing, and disseminating suspicious transaction reports.

**Designated Persons and Entities:** The laws require financial institutions, including VASPs, to identify and freeze the assets of individuals and entities designated by the UN Security Council as terrorists or terrorist financiers (e.g., those on the ISIL (Da'esh) & Al-Qaida Sanctions List) or subject to other UN sanctions regimes (e.g., DPRK, Iran, Libya, etc.).

**Sanctioned Entity Screening:** VASPs must conduct robust screening of their customers (both at onboarding and on an ongoing basis) and their transactions against the UN sanctions lists.

**Asset Freezing:** Upon identification of a match, VASPs must immediately freeze any virtual assets or other property belonging to, or controlled by, a designated person or entity.

**Prohibition on Dealings:** They must also be prohibited from making any funds or financial services available to such designated persons or entities.

**Reporting:** Any such freezes or attempted transactions must be reported promptly to the FIU and the FSA.

**UN Sanctions Lists:** While SVG implements these domestically, the primary source is the UN:

UN Security Council Sanctions Committees

**Anti-Terrorism Act:** (Requires access to SVG legislative database).

**Virtual Asset Business Act, 2023:** (Expected to be available on the SVG FSA website or Government Gazette): This Act will specifically lay out VASP responsibilities regarding AML/CFT and compliance with national and international sanctions.

**Extraterritorial Reach:** Both OFAC and EU sanctions have extraterritorial application.

**OFAC:** If an SVG VASP engages in transactions involving U.S. persons (citizens, residents, entities), the U.S. financial system (e.g., USD-denominated transactions, U.S. correspondent banks), or sanctioned entities/countries directly targeted by U.S. sanctions, it falls under OFAC's jurisdiction.

**EU:** Similarly, if an SVG VASP engages with EU persons, entities, or uses EU financial infrastructure, it may be subject to EU sanctions regulations.

**Correspondent Banking Relationships:** Financial institutions in SVG (including those that might serve as banking partners for VASPs) rely on correspondent banking relationships with international (often U.S. or European) banks. These correspondent banks impose strict requirements on their clients to screen against OFAC, EU, and other major sanctions lists to avoid processing prohibited transactions.

**Reputational Risk:** Failure to comply with major international sanctions regimes, even if not directly mandated by SVG law for a purely domestic transaction, can lead to reputational damage, de-risking by international partners, and exclusion from the global financial system.

**FATF Standards:** The FATF Recommendations, which SVG adheres to through CFATF, require a risk-based approach to AML/CFT. Given the global nature of virtual assets, a robust VASP in SVG would inherently consider major international sanctions lists as part of its risk assessment and compliance program.

**Enhanced Screening:** VASPs dealing with international clients or operations should implement screening against OFAC's Specially Designated Nationals (SDN) List and other sanctions lists, as well as relevant EU sanctions lists.

**Prohibited Transactions:** Avoid processing transactions involving individuals, entities, or jurisdictions targeted by these sanctions regimes.

**OFAC Sanctions List (SDN List):** https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists

**Requirement:** VASPs are required to establish and maintain an AML/CFT program that includes policies, procedures, and controls for screening customers and transactions against relevant sanctions lists.

**Scope:** This includes, at a minimum, the UN sanctions lists as implemented by SVG law. Given the international nature of virtual assets, a VASP's risk-based approach will likely extend to screening against major international lists like OFAC's SDN List and EU Consolidated List.

**Technology:** VASPs are expected to utilize reliable and up-to-date screening solutions that can check customer names, addresses, and other identifiers against sanctions databases.

**Ongoing Monitoring:** Screening must be conducted at the time of onboarding and on an ongoing basis to catch newly designated entities or changes in customer status.

**UN Sanctions:** SVG, through its national laws, prohibits transactions involving countries or regions designated by the UN Security Council (e.g., certain aspects of North Korea, Iran, and other conflict zones).

**OFAC/EU Sanctions:** VASPs must avoid transactions with jurisdictions under comprehensive U.S. or EU sanctions (e.g., Cuba, Iran, North Korea, Syria, and certain regions of Ukraine/Russia for OFAC; or similar for EU). This means no providing virtual asset services to individuals or entities located in, or ordinarily resident in, these jurisdictions.

**Origin/Destination:** VASPs must have systems in place to identify the geographic origin and destination of virtual asset transactions to ensure compliance with these restrictions.

**Entities:** Significant fines, which can run into millions of Eastern Caribbean Dollars (XCD).

**Individuals:** Imprisonment, substantial fines, particularly for financing terrorism or dealing with terrorist property.

**Virtual Asset Business Act, 2023:** While specific penalties are detailed within the Act, typical consequences for non-compliance with VASP regulations and AML/CFT obligations would include:

**License Revocation/Suspension:** Loss of operating license.

**Imprisonment:** For individuals responsible for severe breaches.

**Reputational Damage:** Significant harm to the VASP's standing.

**Cessation of Business:** The FSA has the power to order a VASP to cease operations.

Obtain the necessary license under the **Virtual Asset Business Act, 2023**.

Implement robust AML/CFT programs compliant with the **Proceeds of Crime and Money Laundering (Prevention) Act** and the **Anti-Terrorism Act**.

**Mandatorily screen** against **UN sanctions lists** as implemented in SVG law.

As a best practice and due to the extraterritorial reach of major regimes, **proactively screen** against **OFAC and EU sanctions lists**.

Maintain effective geographic restrictions to prevent dealings with sanctioned jurisdictions.

Report suspicious transactions and asset freezes to the FIU and FSA.

Be aware of the severe penalties for non-compliance.

shares, stock, bonds, debentures, notes, or any other instrument that creates or acknowledges indebtedness

rights, options, or interests in respect of a share, stock, bond, debenture or note

options in respect of a debt or equity instrument

a participation in a collective investment scheme

any other instrument or right commonly known as a security

any other instrument or right specified as a security by the Authority

**An investment of money (or other assets):** The purchaser provides value.

**In a common enterprise:** The investment is pooled with others, and investors' fortunes are linked to the success or failure of the overall enterprise.

**With an expectation of profit:** The purchaser expects to gain financially from the investment.

**Derived solely (or primarily) from the efforts of others:** The success of the investment depends substantially on the managerial or entrepreneurial efforts of the issuer or a third party, rather than the efforts of the investor.

**Investment Tokens/Security Tokens:** Tokens that represent an ownership interest in a company (equity tokens), a right to a share of profits, revenue, or other financial benefits, or debt instruments. These are typically issued during Initial Coin Offerings (ICOs) or Security Token Offerings (STOs) with the primary purpose of fundraising against an expectation of future financial return.

**Tokens Functioning as Collective Investment Schemes:** If the funds raised through token sales are pooled and managed by a central entity with the aim of generating returns for the token holders, this would fall under "participation in a collective investment scheme."

**Tokens Misrepresented as Utility but Functioning as Investments:** Even if a token is initially marketed as a "utility token," if its primary purpose at the time of sale is to raise capital with purchasers expecting profit from the efforts of the issuer (e.g., developing a platform that will increase the token's value), it can be reclassified as a security.

**Payment/Currency Tokens (e.g., Bitcoin, Ethereum):** Tokens primarily intended as a medium of exchange or store of value, without a central issuer whose efforts drive the expectation of profit, are generally not considered securities. However, this distinction can become blurred if they are sold or promoted in a manner that suggests an investment opportunity in a common enterprise.

**True Utility Tokens:** Tokens that provide immediate access to a product or service and whose value is derived solely from their use within a functional ecosystem, without an expectation of profit from the efforts of others. The key is "immediate utility" versus "future utility contingent on development."

**Prospectus Requirement:** Generally, a public offering of securities in SVG requires the publication of a prospectus approved by the FSA. This would entail significant disclosure obligations. (See Part III, Division 1, Section 31 onwards of the Securities Act, 2003).

Issuers may need to be licensed or registered with the FSA if their activities fall under other financial services categories.

Any person or entity acting as a broker, dealer, or advisor in relation to these security tokens would need to be licensed by the FSA under the Securities Act (Part IV).

**Exemptions:** The Securities Act provides for certain exemptions from the prospectus requirement (e.g., private placements to sophisticated investors, offerings to a limited number of persons). However, these exemptions are typically narrow and require strict compliance.

**Trading on a Licensed Exchange:** Trading of securities is generally expected to occur on a licensed securities exchange (e.g., the Eastern Caribbean Securities Exchange - ECSE, though the ECSE does not currently list crypto assets). Any platform facilitating the trading of such tokens would likely need to be licensed as an exchange or operate under specific regulatory exemptions.

**Market Conduct Rules:** Rules against market manipulation, insider trading, and other unethical trading practices as outlined in the Securities Act would apply.

**Reporting Requirements:** Issuers of publicly traded securities typically have ongoing reporting obligations.

Impose administrative penalties and fines.

Refer matters for criminal prosecution for serious breaches.

This is the primary legislation. Finding a direct, stable government URL for older Acts can sometimes be challenging. It would typically be found on the government's official legal affairs website or via the FSA.

*While a direct government link is hard to pin down definitively without being subject to change, the text of the Act can often be found via legal databases or legislative portals once accessed through the government.*

**Search Term:** "Saint Vincent and the Grenadines Securities Act 2003"

**Financial Services Authority (FSA) Official Website:**

This is the main regulatory body. Any official guidance or warnings related to cryptocurrencies would be published here.

The FSA's website often has a section for public warnings or advisories, which may include general cautions about unregulated investment products, including those involving virtual assets.

**URL (Check "Public Warnings" or "News" sections):** http://svgfsa.com/news-updates-and-press-releases/

**Role:** While the FSA **does not license or supervise specific virtual asset activities**, it is the primary financial regulator in SVG. It oversees international business companies (IBCs), mutual funds, banks, and insurance companies. Entities involved in virtual assets that are incorporated as IBCs are registered with the FSA in that capacity, but the FSA clarifies that this registration does not imply regulation or endorsement of their crypto operations. The FSA *does* have a role in overseeing AML/CFT compliance for entities that fall under the scope of the AML/CFT Act, even if they aren't directly regulated for the underlying activity.

**Website:** Financial Services Authority - St. Vincent and the Grenadines

**Role:** The FIU is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other information related to money laundering and terrorist financing. VASPs, if they meet the criteria under the AML/CFT Act, would be reporting entities to the FIU.

**Anti-Money Laundering and Combating the Financing of Terrorism Act, 2017 (as amended)**

**Date:** 2017 (with subsequent amendments)

**Relevance:** This is the cornerstone legislation for AML/CFT compliance. It defines "financial institutions" and "designated non-financial businesses and professions," which can implicitly include entities dealing with virtual assets if their activities are construed as falling within the scope of financial operations or virtual asset services as per international standards (e.g., FATF). It imposes obligations such as customer due diligence, record-keeping, and suspicious transaction reporting.

**Proceeds of Crime Act, 2017 (as amended)**

**Relevance:** This Act provides the legal framework for investigating, prosecuting, and confiscating proceeds of criminal activity, including money laundering. It complements the AML/CFT Act.

**URL:** Also typically found on the FSA's legislation page: SVG FSA Legislation Page

**International Business Companies Act, 2007 (as amended)**

**Date:** 2007 (with subsequent amendments)

**Relevance:** This Act governs the formation and operation of International Business Companies (IBCs) in SVG. Many virtual asset businesses choose to incorporate as IBCs in SVG due to the relatively straightforward incorporation process and offshore nature. However, it's crucial to reiterate that incorporation under this Act does *not* grant a license for virtual asset activities from the FSA.

**No Direct Regulation/Licensing:** Saint Vincent and the Grenadines does **not** offer specific licenses for cryptocurrency exchanges, trading platforms, or other VASP activities through its Financial Services Authority. Any entity claiming to be "licensed by the SVG FSA" for cryptocurrency trading or exchange services is likely misrepresenting its status. The FSA has issued public warnings regarding such claims.

**Incorporation vs. Regulation:** Companies *can* incorporate in SVG as International Business Companies (IBCs) and subsequently conduct virtual asset business activities globally. However, their incorporation in SVG does not mean their crypto activities are regulated or supervised by the SVG FSA for prudential, conduct-of-business, or specific crypto-related compliance standards.

**AML/CFT Obligations:** Despite the lack of specific crypto licensing, entities incorporated in SVG that engage in activities falling under the definition of a "virtual asset service provider" (VASP) or a "financial institution" (as per international standards adopted into local AML/CFT law) are expected to comply with SVG's Anti-Money Laundering and Combating the Financing of Terrorism Act. This includes implementing KYC/AML procedures, monitoring transactions, and reporting suspicious activities to the FIU.

**Consumer Warning:** The FSA has consistently advised the public to exercise extreme caution when dealing with entities that claim to be regulated by the FSA for virtual asset trading, as the FSA does not provide such regulation.