Notice No. 4/GBM/2023, of 14 September - Requirements for the Registration of Virtual Asset Service Providers

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TABLE OF CONTENTS
N O T I C E
The matter to be published in the «Boletim da República» must be submitted as a duly authenticated copy, one for each subject, which must include, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the «Boletim da República». IMPRENSA NACIONAL DE MOÇAMBIQUE, E. P. Council of Ministers:
Rectification:
Regarding Decree No. 8/2022, of 14 March.
Ministries of Economy and Finance and of Industry and Commerce Rectification:
Regarding Ministerial Diploma No. 98/2023, of 14 July.
Bank of Mozambique:
Notice No. 4/GBM/2023:
Concerning the Registration of Virtual Asset Service Providers with the Bank of Mozambique.
Thursday, 14 September 2023 I SERIES — Number 178 BANK OF MOZAMBIQUE Notice No. 4/GBM/2023 of 14 September Given the need to establish a legal framework to allow for the registration of Virtual Asset Service Providers, the Bank of Mozambique, exercising the powers attributed to it by paragraph a) of Article 26 of Law No. 14/2023, of 28 August, determines:
CHAPTER I
General Provisions
ARTICLE 1
Subject Matter
This Notice establishes the rules regarding the registration process for virtual asset service providers with the Bank of Mozambique.
ARTICLE 2
Scope

1. This Notice applies to entities that intend to carry out or are carrying out, exclusively or simultaneously with other economic activities, one or more of the following activities:
   a) exchange of virtual assets for fiat currencies; b) exchange of one or more forms of virtual assets for others; c) transfer of virtual assets; d) custody or custody and administration services of virtual assets or instruments that allow controlling, holding, storing, or transferring these assets, including private cryptographic keys; e) participation in operations and provision of financial services related to the offer and/or sale of a virtual asset by an issuer; f) any other activity involving virtual assets.
2. The provisions of Chapters II and V of this Notice also apply to entities carrying out another activity subject to authorization by the Bank of Mozambique, including credit institutions and financial companies, that intend to carry out activities with virtual assets.
   ARTICLE 3
   Definitions
   The terms and expressions used in this Notice are defined in the Glossary contained in Annex 1, which is an integral part hereof.
   COUNCIL OF MINISTERS
   Rectification
   Having found an error in Decree No. 8/2022, of 14 March, published in the Boletim da República, No. 50, of 14 March 2022, I Series, it is rectified that, where it reads: «….conformdade….», it should read «….conformidade….». In paragraph 3 of Article 24, paragraph 1 of Article 25, and paragraph 1 of Article 26, it is rectified that, where it reads «…. Article 22…», it should read « ….Article 23….». MINISTRIES OF ECONOMY AND FINANCE AND OF INDUSTRY AND COMMERCE Rectification Having found an error in Ministerial Diploma No. 98/2023, of 14 July, published in the Boletim da República, No. 135 of 14 July 2023, I Series, it is rectified that, where it reads: « Article 7 » it should read « Article 6 ». Electronic edition by Pandora Box, Lda.

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CHAPTER II
Registration Process
ARTICLE 4
Registration
Activities related to virtual assets may only be carried out by entities previously registered with the Bank of Mozambique.
ARTICLE 5
Application Processing

1. The registration application must be submitted using the Application Submission Form duly completed, according to the model provided in Annex 2, which is an integral part of this Notice, accompanied by the following elements:
   a) in the case of legal entities:
   i. articles of association, draft articles of association, or amendment to the articles of association, which must explicitly reference the virtual asset activities the entity intends to register for;
   ii. identification of founding shareholders, specifying the capital subscribed by each, and of the beneficial owners of the company's participation;
   iii. identification of the entity's representative in Mozambique, if applicable, with the elements indicated in paragraph b) to be presented;
   iv. document proving the origin of the funds to be allocated and mobilized for the activity;
   v. declaration that no insolvency proceedings are pending against the applicant, issued by a Judicial Court;
   vi. declaration that the funds to be allocated and mobilized for the activity are not of illicit or criminal origin;
   vii. certificate of academic and professional qualifications of the partners or shareholders and representatives of the entity to be registered;
   viii. criminal record certificate of the partners or shareholders and representatives of the entity to be registered;
   ix. business plan;
   x. business continuity plan;
   xii. information on the company's governance system;
   xiii. Single Tax Identification Number;
   xiv. Single Legal Entity Number.
   b) in the case of natural persons:
   i. authenticated copy of the identification document;
   ii. authenticated copy of the certificate of academic and professional qualifications, if applicable;
   iii. specification of the capital to be invested in the exercise of the activity;
   iv. document proving the origin of the funds to be allocated and mobilized for the activity;
   v. declaration that no insolvency proceedings are pending against the applicant, issued by a judicial court;
   vi. declaration that the funds to be allocated and mobilized are not of illicit or criminal origin;
   vii. criminal record certificate, with the certificate from the country of origin to be attached when the persons concerned are foreigners;
   viii. Single Tax Identification Number;
   ix. activity project.
2. Information on the company's governance system must include:
   a) a clear organizational structure with defined, transparent, and coherent lines of responsibility; b) effective processes for identifying, managing, controlling, and communicating the risks to which it is or may be exposed; c) adequate internal control mechanisms, including solid administrative and accounting procedures.
3. The following information regarding founding shareholders that are legal entities holding qualifying participations in the institution to be registered must also be presented:
   a) the statutes and the list of members of the administrative body; b) the annual accounts report for the last three years or equivalent; c) the list of partners of the participating legal entity who hold qualifying participations; d) the list of companies in whose capital the participating legal entity holds qualifying participations, as well as an illustrative exposition of the group structure to which it belongs.
4. In the case of institutions subject to supervision by the Bank of Mozambique, applicants are exempt from submitting the elements provided for in items i. to viii. and xii. to xiv. of paragraph a) of paragraph 1 of this article.
5. Applicants must also present valid and updated elements demonstrating the absence of convictions, in the country or abroad, resulting from judicial proceedings for misdemeanors, administrative nature, or for crimes of an economic-financial nature punishable by imprisonment of eight years or more.
6. In the event of deficient processing of the application, resulting in the lack or imprecision of certain necessary elements, the Bank of Mozambique will notify the applicants, granting them a reasonable deadline to remedy the deficiency, consequently interrupting the counting of the deadline referred to in paragraph 1 of Article 9.
   ARTICLE 6
   Elements Subject to Registration
   The registration of virtual asset service providers covers the following elements:
   a) trade name or corporate name; b) corporate object; c) location of activity exercise; d) date of commencement of activity; e) structure of administration and supervision, if applicable; f) identification of members of corporate bodies and other equivalent positions, as legally established; g) identification of shareholders or partners; h) shareholders' agreements; i) changes that occur in the elements stated in the preceding paragraphs. Electronic edition by Pandora Box, Lda.

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ARTICLE 7
Language and Formalities Applicable to Foreign Documentation

1. All documents intended to support the application, including the form, procedure manuals, and other elements whose completion and preparation are the responsibility of the applicant entity, must be submitted in duplicate and in the Portuguese language.
2. When drafted in a foreign language, documents must be accompanied by their official translation into Portuguese.
3. Documents not issued by Mozambican authorities must be duly legalized.
   ARTICLE 8
   Request for Additional Elements
   The Bank of Mozambique may request applicants, at any time, for complementary elements and information, as well as conduct investigations it deems necessary.
   ARTICLE 9
   Decision
4. It is within the competence of the Bank of Mozambique, within a period of ninety days from the date of receipt of the registration application or, if applicable, the complementary information, to decide and notify the decision in writing to the applicants.
5. The registration application shall be denied whenever:
   a) it is not accompanied by all required information and documents; b) the applicants provide false information; c) the applicant lacks sufficient technical means and financial resources for the type and volume of operations it intends to carry out; d) there are other serious situations not mentioned in the preceding paragraphs, namely, the existence of well-founded doubts and/or reasonable suspicions regarding:
   i. suitability, as provided for in Article 28 of the Law on Credit Institutions and Financial Companies;
   ii. competence of the applicants;
   iii. lawfulness of the origin and source of the funds to be allocated to the activity.
6. In the case of legal entities, the application may also be denied if the legal, management, operational, and ownership structure of the applicant prevents the exercise of supervision.
7. Notwithstanding registration, the Bank of Mozambique may condition the execution of a specific operation to the demonstration of the existence of technological infrastructure, technical means, and human resources with specific qualifications for its correct execution.
8. The failure to notify within the deadlines referred to in paragraph 1 of this article does not constitute a presumption of tacit approval of the application.
9. In the event of approval of the application, the Bank of Mozambique will proceed with the respective registration, extracting a certificate for the applicant.
   ARTICLE 10
   Expiry of Registration
10. The registration shall expire if the virtual asset service provider does not commence activity within a period of ninety days, counted from the date of its communication.
11. In exceptional circumstances, upon duly justified request by the interested parties, the Bank of Mozambique may extend the commencement of activity deadline once, by an additional forty-five days.
    ARTICLE 11
    Cancellation
12. The registration may be cancelled:
    a) when it is found to have been obtained through false declarations or other illicit means, without prejudice to applicable criminal sanctions; b) if any of the grounds that motivated it cease to exist; c) if the virtual asset service provider ceases its activity for a period exceeding six months; d) if the virtual asset service provider expressly renounces the registration; e) if the virtual asset service provider seriously or repeatedly violates applicable legal or regulatory provisions regarding its activity, with the Bank of Mozambique always being required to justify and demonstrate the seriousness and repetition of the violations.
13. In the case of registration of members of corporate bodies, it may be cancelled if it is subsequently concluded that the adequacy requirements required for the exercise of the office are no longer met.
14. Prior to the cancellation of the registration, the Bank of Mozambique will notify the concerned parties to present, within ten days, any clarifications they deem pertinent.
15. The Bank of Mozambique will publish the decision to cancel the registration through the means it deems most appropriate and take the necessary measures for the immediate cessation of activities.
    ARTICLE 12
    Transmission of Registration Ownership
16. A virtual asset service provider intending to transmit the ownership of its registration must request prior authorization from the Bank of Mozambique.
17. In the case of a natural person, the ownership of the registration of virtual asset service providers may be transmitted upon death, by way of legal or testamentary succession, when the transferee and successor continues the deceased's professional activity.
18. For the purposes of the preceding paragraphs, the transmission of registration ownership depends on the transferee presenting the requirements of Article 5 of this Notice, with the necessary adaptations.
    ARTICLE 13
    Inspection
    Prior to the commencement of activity, the Bank of Mozambique may conduct inspections of the premises, as well as the data processing centers of the computer system of virtual asset service providers, to verify if adequate conditions exist for this purpose. Electronic edition by Pandora Box, Lda.

2132 I SERIES — NUMBER 178
CHAPTER III
Obligations of Virtual Asset Service Providers
ARTICLE 14
Operations in Mozambique
Virtual asset service providers operating in Mozambique from a foreign jurisdiction must appoint a representative in Mozambique, responsible, among other things, for responding to requests from supervisory authorities and authorities responsible for preventing and combating money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction.
ARTICLE 15
Governance

1. Virtual asset service providers must possess a corporate governance structure appropriate to their activities, considering the nature and complexity of their operations.
2. Virtual asset service providers must also possess adequate internal controls and adopt strategies, policies, processes, and procedures in accordance with principles of good governance and risk management.
   ARTICLE 16
   Communication with Clients
   Virtual asset service providers must have in place necessary procedures to ensure that each client:
   a) receives an original version of the physical or digital contract regarding the custody of digital assets within fifteen days from the date of contract signing; b) is promptly informed of any action likely to impact any provisions of the agreement and on the virtual assets held in custody; c) has access to prompt and proper service in case of complaints.
   CHAPTER IV
   Management of Risks Inherent to Activities
   ARTICLE 17
   Risk Mapping and Monitoring
3. Virtual asset service providers must:
   a) create and always maintain a risk management framework that allows them to effectively develop and implement strategies, policies, procedures, and controls to manage their operational risks; b) establish a specific risk map for their operations in, from, and to Mozambique and implement adequate methods to identify potentially suspicious transactions; c) possess a documented policy regarding the outsourcing of their non-essential functions.
4. Unless expressly approved in advance by the Bank of Mozambique, virtual asset service providers may not delegate or subcontract any of their essential functions.
5. The risk map and the characteristics of the monitoring structure must be communicated to the Bank of Mozambique via an annual report, in the format and deadlines established by Circular.
   ARTICLE 18
   Duty to Inform and Cooperate
6. Virtual asset service providers must immediately inform the Bank of Mozambique of the existence of any circumstance that could jeopardize the development of their activities, attaching any documentary evidence available.
7. Prior to the renewal of mandates for members of administrative and supervisory bodies, as well as other holders of essential functions, with the exception of entities subject to supervision by the Bank of Mozambique, virtual asset service providers must complete the applicable fields of the Form contained in Annex 2 and submit it to the Bank of Mozambique, accompanied by specific documents.
   ARTICLE 19
   Incident Recovery and Business Continuity
   Virtual asset service providers must possess a system that can ensure the continuity of their operations in the event of:
   a) the equipment and software used to perform main functions not being available from the main supplier; b) personnel designated to perform a non-automated function not being available; c) other disruptive events.
   ARTICLE 20
   Detection of Suspicious or Fraudulent Transactions
8. Virtual asset service providers must possess and maintain documented systems, programs, and procedures for the detection and review of suspicious or fraudulent transactions and for the prevention and combating of money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction, appropriate to their risks.
9. The systems and programs to be implemented by virtual asset service providers must have the capacity to assimilate, for analysis, any unusual or suspicious fund movements, transactions, or activities that indicate potential involvement in illicit activity, regardless of whether the transactions or activities are of a fiduciary or virtual nature or vice versa.
   ARTICLE 21
   Supervision
   When the size or risk profile inherent to the activities carried out by virtual asset service providers justifies it, the Bank of Mozambique may subject them to prudential supervision, applying, with the necessary adaptations, the prudential rules applicable to credit institutions and financial companies. Electronic edition by Pandora Box, Lda.

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CHAPTER V
Final Provisions
ARTICLE 22
Sanctioning Regime
Violation of this Notice constitutes a misdemeanor punishable under Law No. 14/2023, of 28 August - Law on the Prevention and Combating of Money Laundering and Terrorist Financing.
ARTICLE 23
Entry into Force
This Notice enters into force within a period of sixty days, counted from the date of its publication.
ARTICLE 24
Clarification of Doubts
Doubts regarding the interpretation and application of this Notice must be submitted to the Regulation and Licensing Department of the Bank of Mozambique.
Maputo, 14 July 2023. — The Governor, Rogério Lucas Zandamela.
Annex 1
Glossary
A
Virtual Assets - consist of the digital representation of value that can be stored, traded, or transferred digitally and used for payment or investment purposes, which do not include the digital representation of fiat currencies, securities, or other financial assets. B Beneficial Owner - a natural person who is the ultimate owner exercising final control over a client and/or person on whose behalf a transaction is conducted, including also persons who effectively control a legal entity or an entity without legal personality. D Senior Management - natural persons who exercise executive functions in financial institutions and designated non-financial activities and professions who are directly responsible to the administrative body for the day-to-day management thereof. P Virtual Asset Service Provider - any natural or legal person that carries out one or more of the following activities or commercial operations on behalf of or for the account of another natural or legal person:
a) the exchange of virtual assets for fiat currencies; b) the exchange of one or more forms of virtual assets for others; c) the transfer of virtual assets; d) custody or custody and administration services of virtual assets or instruments that allow controlling, holding, storing, or transferring these assets, including private cryptographic keys; e) participation in operations and provision of financial services related to the offer or sale of a virtual asset by an issuer; f) any other activity involving virtual assets. T Suspicious Transaction - any operation that gives rise to a reasonable suspicion of possibly being associated with money laundering or gains of criminal origin, or with funds linked to or related to, or to be used for, terrorism or terrorist acts or by identified organizations, regardless of whether the funds have a criminal origin. Being made under unusual circumstances or of unjustified complexity, whose appearance does not support economic justification or lawful objectives, it may be made by or on behalf of a person whose identity has not been satisfactorily established for the person with whom the transaction is conducted, without prejudice to causing suspicion for any reason. Transfer of Virtual Assets - carrying out a transaction on behalf of another natural or legal person that moves a virtual asset from one address or virtual account to another. Electronic edition by Pandora Box, Lda.

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Annex 2
Form
Registration Application for Virtual Asset Service Provider ___________________ (Name/designation of the applicant), hereby request registration for the provision of virtual asset services in Mozambique.
Part I - Information About the Applicant Entity
(i) Identification of the entity for which registration is requested:
Entity Identification:
Trade name(s) of the applicant
Part II - Business Founders
(I) General Information
A. Person(s) responsible for the registration application Full Name Position Contact Telephone Address electronic B. Representative(s) of the applicant entity Full Name ID/Passport Number Nationality Usual Address Designation (Owner, Beneficiary, Directors and Managers)1 1 Provide all details regarding each entity. Electronic edition by Pandora Box, Lda.

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C. General information about the application and the entity to be registered
Type of application Initial registration application.
Change of elements subject to registration.
Nature of entity Legal entity.
Natural person.
Type of legal entity (with specification of the corporate type), if applicable.
Is the entity to be registered already registered or authorized in another legal system?
Yes
No
In case of affir