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Travel Rule

The FATF's Travel Rule (Recommendation 16) is an important measure in anti-money laundering and countering the financing of terrorism (AML/CFT) efforts. Its purpose is to empower VASPs and financial institutions in preventing terrorists, money launderers, and criminals from utilising wire transfers to move their funds, including virtual assets.

Additionally, it aids in identifying and addressing such misuse if it occurs. The primary objective of these requirements is to ensure that originator and beneficiary information is readily accessible for the following purposes:

  • Assisting law enforcement authorities in detecting, investigating, and prosecuting terrorists or other criminals, as well as tracing their assets.

  • Facilitating financial intelligence units in analysing suspicious or unusual activities.

  • Enabling ordering, intermediary, and beneficiary VASPs and financial institutions to identify and report suspicious transactions, freeze funds, and prevent transactions involving sanctioned individuals or entities.

(Source: FATF Recommendations, Interpretive Note to Recommendation 16)

The Travel Rule is now part of the Transfer of Funds Regulation (TFR). To find out more about the Travel Rule, check out these posts;

FATF Travel Rule Breakdown Glossary

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