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- UAE joins the US, Canada, Singapore, and the UK, among other countries, in adopting the FATF “travel rule” for crypto.
- The imposition is contained in the revised AML rulebook.
The financial watchdog of the United Arab Emirates (UAE) has revised its anti-money laundering laws and introduced the FATF “travel rule” related to digital assets.
While most jurisdictions and authorities have yet to enact laws covering digital assets, the UAE has taken progressive steps to establish crypto-friendly policies, which has prompted many companies to spread their tentacles in the region, including Ripple.
See Also: Binance Withdraws License Application in the United Arab Emirates (UAE)
UAE Adopts the FATF Crypto “Travel Rule”
According to a statement issued on December 21, the Financial Services Regulatory Authority (FSRA) has revised its Anti-Money Laundering and Sanctions Rules and Guidance, popularly known as the AML Rulebook, to ensure compliance with “targeted financial sanctions.”
“In particular, minor drafting changes have been made to the provisions relating to wire transfers in order to provide greater clarity that the FATF “Travel Rule” applies to Virtual Assets,” The statement read.
Originally adopted by the Financial Action Task Force (FATF) in 2016 to curb illicit activities, the FATF travel rule was updated in 2021 to apply to businesses that conduct virtual asset-related transactions.
The rule is designed to prevent money laundering and terrorist financing while ensuring compliance with AML policies by requiring virtual asset service providers (VASPs) to clearly identify the origins and destinations of crypto transactions above the given jurisdiction’s set threshold.
See Also: eToro Receives Approval to Operate in UAE
While the rule supersedes similar recommendations by the Financial Crimes Enforcement Network under the U.S. Bank Secrecy Act, it is up to FATF members to determine whether to implement the travel rule and how.
With the revision, the UAE joins the UK, US, Canada, Singapore, Switzerland, Gibraltar, Malaysia, and South Korea as countries adopting the FATF travel rule.
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