On Oct. 26, LBN FSA drafted guidelines re digital asset transfers.
LBN FSA issued draft Guidelines on travel rule for Labuan digital financial services, aimed to enhance transparency in digital asset transfers for digital financial services.
Enable traceability to prevent money laundering, terrorism financing, financial crimes.
Guidelines
Based on FATF recommendation 15 to manage risks from virtual assets, applies to Labuan reporting institutions (Labuan RI) engaged in digital financial services.
Require Labuan RIs to obtain, securely share originator and beneficiary information.
Applies to Labuan banks, investment banks, Islamic banks, investment banks, Labuan trust companies, money-broking businesses, payment systems, and exchanges.
Information must be provided before or during the transfer, with varying requirements for transfers below or equal to USD/EUR1,000 and those exceeding that threshold.
Labuan RIs should use technology to protect and transmit information securely, and implement risk-based policies to address transfers with insufficient information.
Must also obtain, verify originator information, obtain beneficiary information, conduct sanctions screening, particularly for transactions with other financial institutions.
Consultation End
Consultation is open until Nov. 24, 2023.
Dec. 2023 Guidelines Published
On Dec. 14, 2023, LBN FSA issued finalized Guidelines on travel rule for Labuan digital financial services, re the consult above, and these guidelines take effect Jan. 1, 2025.
Labuan reporting institutions undertaking digital financial service (specified Labuan RI) are highly encouraged to early adopt the requirements ahead of Jan. 1, 2025, in order to ensure their ongoing adherence to FATF requirements on digital asset transfers.
Finalized guidelines include revisions to draft above; i.e. amendments to definitional provisions like meaning of digital asset, digital asset transfers; additional definitions.
In addition, removed references to EUR; and added an appendix which contains an illustrative guide for specified Labuan RI to apply the travel rule requirements in the process of digital asset transfer from an ordering institution to a beneficiary institution.
Includes revisions to wording of types of specified labuan RIs the guidelines apply to.
Document dated Dec. 14, 2023, received from LBN FSA Dec. 15, summarized Dec. 20.
In Dec. 2023, LBN FSA proposed guidelines on money broking business, see #196345.
