January 31st 2023
Stakeholders sensitized on Virtual Assets Business Act
by NCPC
THE RECENTLY-PASSED LEGISLATION WAS ENACTED TO BOLSTER SAINT LUCIA’S ANTI-MONEY LAUNDERING LAWS.
The National Anti-Money Laundering Oversight Committee (NAMLOC) presented certificates of participation to stakeholders involved in reviewing the recent amendments to Saint Lucia’s Anti-Money Laundering, Terrorist, and Proliferation Financing legislation. These amendments are critical to Saint Lucia's application for re-rating to be removed from enhanced follow-up. One piece of legislation which will impact several service providers is the Virtual Assets Business Act which was recently passed in December 2022.
Natalie Dusauzay, Executive Director of the Financial Services Regulatory Authority (FSRA), explained that a virtual asset is a digital representation of value that can be traded or used for payment or investment.
“Most virtual assets that you would know or would have heard of would be cryptocurrencies or virtual currencies such as bitcoin or lite coin. And, today it is reported that over 20,000 of those are in circulation.”
She said a virtual currency cannot be equated to a fiat currency.
“What do I mean by that? A fiat currency is a legal tender issued by a government, while a cryptocurrency or a virtual currency is backed by a blockchain technology that is not overseen by any central authority.”
Dusauzay added that blockchain technology has the ability to allow the transfer of value around the world quickly and efficiently, with law enforcement authorities reporting that illicit traders are using such technology to trade in cyberspace to conduct transfers between multiple accounts, in multiple jurisdictions using virtual identities where the owner of the virtual asset isn’t always known.
“So, you could understand how difficult it is for law enforcement to trace a transaction, and due to that emerging risk, the Financial Action Task Force (FATF) has issued recommendations to deal with such emerging risks and they have issued recommendation no.15 out of the 40 recommendations that have been issued by the Financial Action Task Force.”
These recommendations provide guidance to national authorities such as NAMLOC, virtual asset providers, financial entities, and the like to better understand their risks and potential exposure in relation to money laundering, terrorist, and proliferation financing. It calls for institutions to conduct effective and continuous customer due diligence.
“That Virtual Asset Business Act would provide for anyone wanting to provide a virtual asset business from or within Saint Lucia would have to be licensed. That means they would have to submit an application to the Financial Services Regulatory Authority to be approved as a virtual asset service provider.”
The Executive Director stated that NAMLOC is aware that virtual assets are a burning issue for many stakeholders and the intent of the legislation is not to stifle investment opportunities.
“We as prudential regulators and money laundering and terrorism financing regulators such as the Financial Intelligence Authority, understand that the objective is not to stifle the growth of virtual assets but rather to make sure that we remain compliant.”
A number of key stakeholders have volunteered their services to NAMLOC to address gaps in Saint Lucia’s Anti-Money Laundering Legislation and the ongoing National Risk Assessment.
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