Ecuador -- Travel Rule Implementation Regulatory Overview

Ecuador has adopted and implemented the FATF Travel Rule through specific regulations, primarily driven by its Financial Analysis Unit (UAFE) which serves as the Financial Intelligence Unit (FIU).

Here's a breakdown of the status:

1. Adopted and Effective Date

• Adopted: Yes, the FATF Travel Rule has been adopted in Ecuador.
• Effective Date: The key regulation implementing these requirements is UAFE Resolution No. UAFE-DG-2023-0002, titled "RESOLUCIÓN QUE EMITE LAS DISPOSICIONES PARA LA PREVENCIÓN DE LAVADO DE ACTIVOS Y FINANCIAMIENTO DE DELITOS PARA LOS PROVEEDORES DE SERVICIOS DE ACTIVOS VIRTUALES" (Resolution Issuing Provisions for the Prevention of Money Laundering and Financing of Offenses for Virtual Asset Service Providers). This resolution was published on January 27, 2023, and became effective upon its publication.

2. Threshold Amounts

• Travel Rule Threshold: UAFE Resolution No. UAFE-DG-2023-0002 (Article 10) mandates the collection and transmission of originator and beneficiary information for virtual asset transfers that exceed the value of five hundred United States Dollars ($500 USD) or its equivalent in other currencies.

3. Which VASPs are Covered

The UAFE Resolution No. UAFE-DG-2023-0002 defines and covers "Proveedores de Servicios de Activos Virtuales (PSAVs)" (Virtual Asset Service Providers - VASPs) which include any natural or legal person, or legal arrangement, that as a business carries out one or more of the following activities or operations for or on behalf of another natural or legal person:

• Exchange between virtual assets and fiat currencies.
• Exchange between one or more forms of virtual assets.
• Transfer of virtual assets.
• Custody and/or administration of virtual assets or instruments enabling control over virtual assets.
• Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

4. Technical Implementation Requirements

• Information Collection: For transactions exceeding the $500 USD threshold, VASPs must obtain and maintain the following information (Article 10):

  • Originator Information:
    • Full name of the originator.
    • Physical address or registered address.
    • Account number (or equivalent reference number) used to process the transaction.
    • Official identification number (e.g., passport, national ID).
  • Beneficiary Information:
    • Full name of the beneficiary.
    • Physical address or registered address.
    • Account number (or equivalent reference number) used to process the transaction.

• Information Transmission: This information must be transmitted to the beneficiary VASP in a secure, accurate, and timely manner (de forma segura, precisa y oportuna). While the resolution does not prescribe a specific technical protocol (like TRISA, OpenVASP, etc.), it implicitly expects VASPs to adopt solutions that meet these criteria and ensure interoperability where possible, aligning with FATF standards.

• Record Keeping: VASPs are required to keep records of this information for at least 10 years (Article 11).

5. Penalties for Non-Compliance

Penalties for non-compliance with AML/CFT obligations, including those related to the Travel Rule, are primarily established in the Ley Orgánica de Prevención, Detección y Erradicación del Delito de Lavado de Activos y Financiamiento de Delitos (Organic Law for the Prevention, Detection, and Eradication of the Crime of Money Laundering and Financing of Offenses).

• Administrative Sanctions: The UAFE, as the supervisory authority, can impose administrative sanctions on VASPs that fail to comply with their obligations (Article 33 of the Organic Law). These can include:

  • Fines: Monetary fines, which can vary depending on the severity and recurrence of the infraction, and the economic capacity of the VASP. The law specifies ranges, often linked to the basic unified salary.
  • Temporary Suspension of Activities: For serious or repeated infractions.
  • Definitive Closure/Revocation of Registration: In the most severe cases, particularly for repeated non-compliance or involvement in illicit activities.

• Criminal Penalties: Beyond administrative sanctions, severe breaches (e.g., direct involvement in money laundering or terrorism financing) can lead to criminal charges under the Código Orgánico Integral Penal (Organic Comprehensive Criminal Code), with penalties including imprisonment and larger financial penalties.

References:

• UAFE Official Website: https://www.uafe.gob.ec/
• UAFE Resolution No. UAFE-DG-2023-0002: While a direct public link is sometimes hard to keep current as government sites change, it would typically be found in the "Normativa" or "Resoluciones" section of the UAFE website. You might need to search for "Resolución UAFE-DG-2023-0002" on their site. (As of my last update, accessing the exact PDF directly from a stable URL can be challenging without a deep search on their portal).
• Ley Orgánica de Prevención, Detección y Erradicación del Delito de Lavado de Activos y Financiamiento de Delitos: This law can typically be found on the official legislative database of Ecuador (e.g., Registro Oficial or LexisFinders/Vlex).
  • Example search term for a government portal: "Ley Orgánica Prevención Lavado Activos Ecuador Registro Oficial"

Ecuador, through the UAFE, has clearly taken steps to align its regulatory framework for virtual assets with FATF Recommendation 15 and its Interpretive Note, including the implementation of the Travel Rule. Compliance is mandatory for all identified VASPs operating within or serving Ecuadorian customers.