[HT MENA] Travel Rule & Declaring Transactions

What is Travel Rule?
Required Information
Withdrawal Declaration Process
Deposit Declaration Process

Travel Rule for clients onboarded under Middle East and North Africa (MENA)

1. What is the Travel Rule?

The Travel Rule is a global compliance standard designed to ensure transparency in virtual asset transactions. It mandates that Virtual Asset Service Providers (VASPs) collect & store information about the originator (sender) and beneficiary (receiver) for transactions exceeding a specific threshold.

In the MENA region under Virtual Asset Regulatory Authority (VARA), any transfer of Virtual Assets exceeding AED 3,500 must meet these requirements:

• For Withdrawals: VASPs must collect and store accurate originator and beneficiary details before initiating the transfer.
• For Deposits: VASPs must obtain and verify originator and beneficiary details before granting clients access to the received Virtual Assets.

2. Required Information
The minimum required originator information should include the following: 

• Name
• Wallet Address / Account Number
• Residential or Business Address

The minimum required beneficiary information should include the following:

• Name
• Wallet Address / Account Number

3. Withdrawal Declaration Process (MENA Travel Rule)

When initiating a withdrawal exceeding AED 3,500, follow these steps to declare the required details:

Scenario A: Counterparty and all required information are saved in the Counterparty Book

• During the withdrawal process, the user selects the saved individual or company.
• The system will display the saved information for review.
• The user may proceed to instruct the withdrawal directly.

Scenario B: Counterparty and blockchain address are saved, but required additional information is missing

• During the withdrawal process, the user selects the saved individual or company.
  The saved information will be displayed, and the user will be prompted to input the missing required details.
• Recommendation: Enterprises are encouraged to pre-save all required information in the Counterparty Book to streamline the process.
• Once completed, the user may proceed to instruct the withdrawal.

Scenario C: New counterparty not saved in the Counterparty Book

• The user is prompted to manually input the originator and beneficiary details, including any required additional information.
• For non-intermediary institutions:
  1. The originator VASP will default to Hex Trust.
  2. The originator will be the enterprise’s “Own Profile”.
• For intermediary institutions:
  1. The originator VASP and originator fields will be user-editable to reflect the actual originator.
• The user may select “Save counterparty on the fly” and input the blockchain address and address label for future use.
• The withdrawal instruction will require two separate approvals:
  1. Approval to instruct the withdrawal
  2. Approval to save the counterparty information and blockchain address

4. Deposit Declaration Process

Step 1: Locate the Transaction

• Navigate to the “Active Transactions” tab and locate the relevant deposit transaction.

Step 2: Check Counterparty Information

• If the blockchain address and all required counterparty information are already saved in the Counterparty Book:
  
  ➤ No further action is required.
• If the blockchain address is saved but additional required information is missing, or the blockchain address is not saved:
  
   ➤ The user must click “Pending Originator and Beneficiary Information.

Step 3: Input Required Information

• If the counterparty is saved but missing additional information:
  1. The user is prompted to input the missing required details.
• If the counterparty is not saved:
  
  1. The user is prompted to input the full originator and beneficiary information, including required additional details.
  2. The user may select “Save counterparty on the fly” to store the originator information and blockchain address for future use.
  3. This action will trigger an approval workflow to validate and store the new counterparty details.

Step 4: Complete the Declaration

• Click "Continue" to finalize the declaration process.