On-shore VASP in Benin

Decret n° 2025-678 du 29 octobre 2025 exists and does set the conditions for establishing personal identification documents and dispenses six of them (CIP, CIP afro-descendants, CIP etranger, CNI biometrique, passeport ordinaire biometrique, carte de resident) from mandatory legalisation/certification, with validity periods of 5 / 3 / 6 years. However it is a civil-identification instrument (RNPP / etat civil), not an AML/CFT instrument: Benin's AML identification and verification obligations remain those of Loi n° 2024-01 du 20 fevrier 2024, notably article 17 (verification from reliable and independent sources).

Article 17 of Loi n° 2024-01 du 20 fevrier 2024 requires reporting entities to identify the customer and to verify identity by means of documents, data or information from reliable and INDEPENDENT sources. Customer self-certification does not satisfy verification. The risk-based approach modulates the extent of measures, not the requirement of an independent source. The only material carve-out identified by GIABA is article 86 (certain online payment transactions where the account is held in Benin, another WAEMU state, or an equivalent third country).

Identification of legal-entity customers and of their beneficial owners is required under Loi n° 2024-01 du 20 fevrier 2024. The statement that beneficial ownership is not obtainable through ordinary company searches is now out of date: Benin established a beneficial ownership registry by Decret n° 2024-917 du 24 avril 2024.

Beneficial Ownership: Identify and take reasonable measures to verify the identity of the beneficial owner(s) of the customer.

Purpose and Intended Nature of Business: Understand the purpose and intended nature of the business relationship.

Ongoing Monitoring: Conduct ongoing due diligence on the business relationship and scrutinize transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.

Risk-Based Approach: Apply a risk-based approach, meaning enhanced due diligence (EDD) for higher-risk situations (e.g., customers from high-risk jurisdictions, politically exposed persons - PEPs, complex transactions) and simplified due diligence (SDD) for lower-risk situations.

No travel rule applies to virtual asset transfers in Benin. The originator/beneficiary information rules of the UMOA uniform law (arts. 39-47), carried into Loi n° 2024-01, are drafted for 'institutions financieres', which the law defines separately from prestataires de services d'actifs virtuels. GIABA's May 2025 follow-up report rates Benin Non-Compliant on Recommendation 15 ('no legal instrument has been adopted by Benin designed to regulate VA and VASP activities') and Partially Compliant on Recommendation 16 with no virtual-asset coverage at all.

Article 60 al. 1 of Loi n° 2024-01 du 20 fevrier 2024 requires reporting entities (assujettis) to report immediately to CENTIF sums, transactions or attempted transactions suspected of being proceeds of money laundering, terrorist financing, proliferation financing or a predicate offence. GIABA rates Benin Compliant on R.20. However it is not established that PSAV/VASPs are operative reporting entities in Benin: GIABA rates R.15 Non-Compliant and records that no legal instrument regulating VA/VASP activity has been adopted.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or third parties that an STR is being or has been filed.

The retention period in Benin is TEN (10) years, not five. Article 23 of Loi n° 2024-01 du 20 fevrier 2024 requires reporting entities to keep, for ten years from the closure of accounts or the termination of the relationship, documents on customer identity, customer knowledge and risk profile, due diligence analyses and transactions. This mirrors art. 23 of the UMOA uniform law of 31 March 2023 ('dix ans, a compter de la cloture de leurs comptes').

Type of Records: This includes all customer identification data (e.g., copies of identification documents), account files, business correspondence, and transaction data (e.g., amounts, dates, types of transactions, involved parties).

Availability: Records must be sufficient to permit the reconstruction of individual transactions and be made available to competent authorities upon request.

Benin’s Financial Intelligence Unit (FIU) is the Cellule Nationale de Traitement des Informations Financières (CENTIF). CENTIF is an administrative financial intelligence unit under the Minister of Finance, with financial and decision-making autonomy, responsible for receiving, analyzing, enriching and transmitting suspicious transaction reports and other relevant financial information to competent authorities for the purposes of combating money laundering and terrorist financing, and for coordinating and supporting national AML/CFT policy and strategy.

Central Bank of West African States (BCEAO): While the BCEAO is the central bank for UEMOA member states and regulates traditional financial institutions, it has issued warnings and statements regarding cryptocurrencies. It would likely be involved in any future licensing or specific regulatory framework for VASPs in the region.

The date is right - Directive n° 02/2015/CM/UEMOA relative a la lutte contre le blanchiment de capitaux et le financement du terrorisme dans les Etats membres de l'UEMOA was adopted on 2 July 2015 (the record's own id slug, '29 September 2015', is wrong). But it is no longer current: it has been superseded by the UMOA Loi uniforme LBC/FT/FP du 31 mars 2023, transposed in Benin by Loi n° 2024-01 du 20 fevrier 2024. It should be described as the former, not a live, regional reference.

Article 147 of the Constitution of 11 December 1990 does provide that 'les traites ou accords regulierement ratifies ont, des leur publication, une autorite superieure a celle des lois'. But that rule governs ratified treaties, not derived UEMOA/UMOA secondary legislation. A UEMOA directive is by definition binding as to result and requires national transposition; the UMOA uniform law is a model text that each member state must enact. Benin in fact transposed - Loi n° 2018-17 du 25 juillet 2018, then Loi n° 2024-01 du 20 fevrier 2024 - which would have been unnecessary if the record's inference were correct.

Not Legal Tender: Cryptocurrencies are not recognized as legal tender within the UEMOA zone.

Virtual assets are not recognised or regulated as financial instruments in Benin, and BCEAO has publicly flagged unregulated crypto-actifs as a financial-stability risk. However, Benin is not 'tightening oversight' through any crypto-specific instrument: Loi n° 2024-01 du 20 février 2024 makes prestataires de services d'actifs virtuels assujettis to AML/CFT obligations (art. 3(c)) and bars professional PSAV activity without prior agrément or authorisation of the 'autorité compétente' (art. 58), but no competent authority has been designated (art. 59 defers everything to future regulation). GIABA's May 2025 enhanced follow-up report rates Benin Non-Compliant on R.15, finding that 'no legal instrument has been adopted by Benin designed to regulate VA and VASP activities'.

No BCEAO or Beninese instrument prohibits banks, microfinance institutions or payment service providers from crypto-related activity. GIABA's May 2025 report states that 'no legal instrument has been adopted by Benin designed to regulate VA and VASP activities' and rates R.15 Non-Compliant. What exists is (a) BCEAO public warnings about unregulated crypto-actifs, and (b) Loi n° 2024-01 art. 58, a generally applicable prior-authorisation requirement for professional PSAV activity that is inoperative because no competent authority has been designated.

There is no operational licensing regime for crypto custody in Benin, but it is wrong to say custody falls outside the regulated perimeter altogether. Loi n° 2024-01 art. 2(44)(d) expressly includes 'la conservation et l'administration d'actifs virtuels' in the PSAV definition, art. 3(c) makes PSAV assujettis, and art. 58 forbids professional PSAV activity without prior agrément or authorisation from the competent authority. Because no competent authority has been designated (art. 59), no custody licence can in fact be applied for or granted.

Segregation of Client Assets Rules: No specific rules exist mandating the segregation of client digital assets from the custodian's operational assets.

Insurance/Bonding Requirements: There are no specific insurance or bonding requirements for crypto custodians.

Cold Storage Mandates: No specific mandates dictate the use of cold storage or other security protocols for digital assets held in custody.

Legal Uncertainty: Activities are conducted in a regulatory grey area.

No Consumer Protection: There are no specific regulatory safeguards for clients using such services.

Operational Risk: Without clear guidelines, security, operational, and financial risks are heightened.

Correct that no crypto-custody-specific law exists, but it understates the AML position: Beninese AML/CFT law does not merely 'apply generally' to crypto — Loi n° 2024-01 art. 3(c) expressly lists prestataires de services d'actifs virtuels as assujettis, art. 2(44) covers exchange, transfer, custody/administration and issuance-related services, art. 23 imposes 10-year record retention, and art. 58 requires prior agrément. Suspicious transaction reports go to CENTIF-Bénin (the FIU; note that 'CENAREF' is the DRC's FIU, not Benin's). In practice supervision is absent: GIABA rates Benin Non-Compliant on R.15.

No Crypto-Specific Rate: There are no specific capital gains tax rates for cryptocurrencies in Benin.

No Crypto-Specific Provisions: No specific income tax provisions for crypto.

No Crypto-Specific Reporting: There are no specific tax forms or declarations for cryptocurrency holdings or transactions in Benin.

Potential Interpretation: If the DGI were to view cryptocurrencies as a "movable asset" or a "financial instrument," any profits derived from their sale or exchange could theoretically be subject to general capital gains provisions.

Potential Interpretation: If cryptocurrencies are received as compensation for services, as salary, or as income from a business activity, they would likely be considered taxable income at their fair market value in West African CFA Franc (XOF) at the time of receipt.

VAT/GST Treatment (Taxe sur la Valeur Ajoutée - TVA)

Benin's VAT law contains no crypto-specific rules — verified: no occurrence of 'actif virtuel', 'crypto' or equivalent terms in the Code général des impôts 2023 or 2025. The stated 18% standard TVA rate could not be verified from any successfully fetched primary source: the TVA rate articles (CGI 2025, Livre 2, Titre 1, Chapitre 1, from p. 99) lie beyond the retrievable portion of the PDF, and the DGI site serves no fetchable content.

Developing Frameworks: Many African nations, including Benin, are still in the early stages of developing comprehensive regulatory frameworks specifically for cryptocurrencies. Enforcement often takes the form of general warnings or actions against broad financial fraud rather than specific crypto licensing violations.

Limited Public Reporting: Unlike jurisdictions with mature financial markets (e.g., USA, EU), individual enforcement actions, especially those involving relatively smaller sums or entities, are often not widely publicized by regulators in Benin or the wider UEMOA region.

Focus on Fraud: When actions occur, they are often initiated by law enforcement (police, judicial authorities) against individuals or groups involved in pyramid schemes or investment fraud using cryptocurrencies, rather than by a financial regulator against a crypto service provider for regulatory non-compliance.