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Based on its first decree n. 8 on the development of the digital economy (December 2017), the special economic zone of the Belarus High Technologies Park (HTP) has announced the establishment of further regulations for companies operating in the sector of cryptocurrencies and blockchains.
The regulatory framework aims to position Belarus as "one of the most attractive destinations in the world for cryptocurrency activities" and was designed to provide legal status for smart tokens and contracts, as well as for activities related to cryptocurrency mining, purchase, sale, storage, distribution and exchange. The Belarusian legislators have developed the framework in collaboration with Deloitte, Wenger & Vieli and other consulting firms to ensure that it is aligned with the best global practices, according to a press release.
Martin Hess, partner of the Swiss law firm Wenger & Vieli, said that the Belarusian approach to cryptocurrency regulation has the advantage of speed and simplicity because it does not require an understanding of the entire Belarusian legislation, the courts and the law. legal practice to start a business.
"The Belarusian approach is different than in other countries," Hess said, although "it remains to be seen how the Belarus regulations will be interpreted and applied." The Belarus regulations will also be assessed against the relevant legislation for digital resources. in other countries. "
"Today it is important to ensure that regulations, their application and interpretation as well as their amendments and developments are equivalent to the legislation of other major jurisdictions such as the United States, China, the European Union, Japan, Korea, Singapore and Switzerland", stressed.
The documents published by the HTP on November 30, 2018 define the requirements for the various types of activities related to cryptography, including promotion and advice for tokens, cryptocurrency exchanges and initial token offerings (ICOs).
In particular, the new regulatory framework includes:
- Tax exemptions: the framework decree n. 8 offers tax-free processing of all encrypted transactions and ICOs until 2023 for crypto-corporations created and operating in Belarus.
- Advanced anti-money laundering laws: pursuant to decree n. 8, Belarus has implemented anti-money laundering (AML) and know-your-customer (KYC) measures to combat fraud in encrypted businesses. In addition, cryptocurrency companies discovered to be involved in money laundering will be immediately terminated by state authorities, with additional penalties for banks, payment services or other financial service providers who may have facilitated such crimes.
- Rigorous data and regulations on customer protection: the new regulations emphasize the protection of personal data, implementing structures that guarantee data protection at the same level as the General Data Protection Regulations (GDPR) in the European Union. Cryptocurrency companies operating in Belarus are required to inform customers of the risks associated with their services, adhere to the new advertising rules, disclose relevant information on customer safety and implement internal control systems for risk management, information security and conflicts of interest, among other issues.
- High business standards: all cryptocurrency companies in Belarus must meet certain operational requirements, including the disclosure of beneficial owners and compliance with reputation requirements, the recruitment of qualified personnel, compliance with strict financial stability standards and the use of technically secure IT systems to conduct business. Adherence to all these standards must also be verified through a complete audit by a large four audit firms.
The HTP was founded in 2005 to stimulate IT innovation and attract foreign companies through a favorable tax and legal system. In 2018, over 200 companies have joined the HTP as residents, which currently include the EPAM software provider, the Viber instant messaging service, the Masquerade photo and video filter app and the World developer of Tanks Wargaming.
David Baron, president of the Belarusian-US Business Council, expects more US and international technology companies and blockchains to do business in Belarus following the establishment of Decree no. 8 and of the new regulations.
"Many US IT companies already know Belarus as a place to set up their own software development division, but Decree No. 8 will position Belarus as the main destination for cryptocurrencies and global value-generating IT companies," said Baron.
