Moneyval Praises Virtual Asset Reg Progress But Warns on Sanctions Evasion

**Moneyval highlights progress in virtual asset regulation but warns of sanctions evasion risks**

The Council of Europe's anti-money laundering body, Moneyval, has reported significant advances in regulatory and supervisory frameworks for virtual assets and virtual asset service providers (VASPs). However, it stressed the need for stronger enforcement to prevent their use in evading targeted financial sanctions.

In its latest horizontal review, based on data from 25 Moneyval member jurisdictions, the report identifies growing concerns over virtual assets facilitating sanctions evasion, alongside risks of fraud, terrorism financing, proliferation financing, and child exploitation. While 81% of jurisdictions now require VASPs to be licensed or registered, and over 90% have designated supervisory authorities, enforcement against unlicensed operators remains weak.

Implementation of the Financial Action Task Force's (FATF) Travel Rule—Recommendation 16, which mandates collecting, transmitting, and storing originator and beneficiary information for virtual asset transfers—is also lagging. Only 46% of jurisdictions have fully operationalised it. Data collection challenges persist, leaving many areas without clear visibility into cross-border flows.

Moneyval called for enhanced cross-border cooperation, better integration of targeted sanctions and proliferation risks into national assessments, improved quality of suspicious activity reports from VASPs, and bolstered investigative capacities for both public authorities and the private sector.

**Andorra updates high-risk jurisdictions list in line with FATF**

Following the latest FATF update on high-risk jurisdictions, Andorra's Financial Intelligence Unit (Uifand) has revised its list. Myanmar has been elevated to the highest-risk category—alongside North Korea and Iran—triggering a prohibition on all business relationships or financial transactions with the country or its residents and entities, due to "very high" risk levels warranting maximum vigilance.

Myanmar has shifted from the elevated-risk list, where enhanced due diligence still applies. Kuwait and Papua New Guinea have been added to that elevated-risk group for money laundering, joining existing entries: Algeria, Angola, Bolivia, Bulgaria, Cameroon, Côte d'Ivoire, Haiti, Yemen, British Virgin Islands, Kenya, Lebanon, Monaco, Namibia, Nepal, Lao People's Democratic Republic, Democratic Republic of the Congo, Syria, South Sudan, Venezuela, and Vietnam.

Uifand reminded stakeholders that failing to comply with these directives constitutes a serious offence under Andorra's Law on the Prevention and Fight against Money Laundering and Terrorism Financing, potentially leading to substantial penalties.