The process of implementing Travel Rule
It is inevitable that implementing the Travel Rule will require changes to both front and backend systems. Compliance departments will also have a whole new set of tasks to manage.
Notabene’s solution is built to greatly minimize the time and effort needed of engineering teams to make these changes, compared with building an in-house solution or implementing a less holistic travel rule solution.
Decision points for Compliance Team
The Travel Rule is not simply about transferring information to the counterparty VASP. There are many areas where compliance officers need to either make decisions or set rules.
After the technical team implements the API, the Notabene platform allows the compliance team to manage these decision points without having to further involve the technical team.
Determining your requirements
The following needs to be determined by your compliance team and communicated to you for you to be able to implement the Travel Rule.
What is the threshold required for implementing the travel rule?
What Personal Identifying Information (PII) should you send across to the originating VASP
Handling outgoing transactions
The following decisions need to be made before a transaction can be sent:
Is the transaction covered by the Travel Rule?
Have we performed sufficient KYC on our originating customer to send the transaction?
Who is the Beneficiary VASP? Are they licensed, and can we trust them with our customer information?
What is the minimum required Travel Rule information imposed by my regulator?
What is the minimum required Travel Rule information imposed by the Beneficiary VASP’s regulator?
Did the Beneficiary VASP accept my Travel Rule transfer?
What is the risk score of the beneficiary blockchain address (using your blockchain analytics service)?
The technical team needs to be part of the decision points marked in bold above. It is important to work with your compliance officer to manage how this gets implemented. The rest can be handled by your compliance team on the Notabene platform.
Handling incoming transactions
The following decisions need to be made before a transaction can be received:
Do I support the asset being transferred?
Who is the Originating VASP? Are they licensed, and do I trust them to have performed KYC correctly on their customer?
What is the minimum required Travel Rule information imposed by my regulator, and did I receive all I need?
Do I need to perform additional sanctions check on the originating customer?
Will I allow my customer to receive the amount transferred?
The Notabene platform will help compliance officers with these decisions. The Notabene API provides the information you will need to reconcile the incoming travel rule transfers with the underlying transaction layer.
Contact our Support team. for any questions you may have.