AML Compliance Guidelines: Jordon

Regulatory Bodies in Jordon

Jordan has several major regulatory bodies responsible for Anti-Money Laundering (AML) compliance regulations. These bodies work collectively to ensure the effectiveness of AML compliance regulations in Jordan, aiming to prevent money laundering and terrorist financing activities within the country’s financial system.

Jordan Anti-Money Laundering & Counter Terrorist Financing Unit (AMLU): The AMLU is a dedicated unit responsible for implementing AML and Counter Terrorist Financing (CTF) measures in Jordan. It plays a central role in coordinating efforts to combat money laundering and terrorist financing.

Financial Action Task Force (MENAFATF) – Mutual Evaluation Report: While not a Jordanian body, the Mutual Evaluation Report by MENAFATF provides insights into Jordan’s AML/CTF regulatory framework and its compliance with international standards.

Jordan Regulatory Departments: Various regulatory departments within Jordan contribute to AML compliance. The specific departments involved in AML regulations are not detailed in the source, but they play a crucial role in enforcing AML measures.

Legal and Regulatory Framework: Jordan has established a legal and regulatory framework for AML and CTF measures. This includes the revision of regulations to align with international standards, as mentioned in the overview source.

Law No. (46) For the Year 2007 Anti Money Laundering and Counter Terrorist Financing Law

Article 2 (part a)

• The law defines money laundering and outlines the activities that constitute it. It typically includes concealing the origins of illegally obtained money, disguising it as legitimate funds, and integrating it into the legal financial system.
• The article explains the definition of the money laundering as any actions that involve concealing the true nature, source, location, means of movement, ownership, or related rights with knowledge that any of the funds are the proceeds of any crimes, including conversion, transfer, moving, or disguising the source of funds, preventing the identification of the person who committed the underlying crime that produced the funds, or acquiring, possessing, using, managing, keeping, investing, depositing of funds.

Obligations on Financial Institutions

• The law places obligations on financial institutions, such as banks and money exchangers, to establish anti-money laundering (AML) policies and procedures.
• These institutions are required to implement customer due diligence measures, report suspicious transactions, and maintain records.

Article 4

• Establishes the duty of financial institutions to implement AML policies and procedures.
• Any offense that is punished under the Kingdom’s current laws or offenses for which any other current law considers the proceeds to be a money laundering offense
• Crimes whose proceeds are regarded as the subject of a money laundering crime under the terms of international agreements ratified by the Kingdom, provided that such crimes are criminal by Jordanian law.

Article 7

A- The Governor of the Central Bank of Jordan will oversee the establishment of an independent unit known as the (Anti Money Laundering and Counter Terrorist Financing Unit).

B- The Unit is in charge of receiving notifications described in Item (3) of Paragraph (a) of Article (14 of this law) regarding any transaction suspected to be connected to money laundering or terrorist financing, as well as requesting information related thereto, analyzing and looking into such, and, when necessary, providing the competent authorities with such information for the purposes of anti-money laundering and counter-terrorist financing.

Provisions of Article (65/b) of the Central bank of Jordan

 Law No. (23) of 1971

The “Instructions for Regulating Know Your Customer Procedures and Dealing with Him Electronically” are described in Article 1 and will take effect as of the date of their issuance.

Article 2: Unless the context clearly indicates otherwise, the following terms and words shall have the meanings assigned to them herein whenever they are used in these Instructions.

E-Know Your Customer (E-KYC)

It is the use of knowing your customer procedures and identity verification through electronic means for the purpose of establishing a remote banking or business relationship without the need for a customer to be present (face to face) at the company or any other kind of its presence or that of any other individual or entity, etc.

Customer Electronic Registration: The methods and procedures utilized by the business to carry out the E-KYC requirements that result in the acceptance of the person as a customer at the company.

Financial and banking services: Any services or goods offered by the company to its consumers who have registered electronically fall under the category of financial or banking services.

Electronic Authentication System: A collection of coordinated and integrated components that includes the electronic intermediates used for the issuance and administration of the electronic authentication certificate.

Person: A natural or legal person seeking to communicate electronically with the Company in order to create a remote banking or business relationship.

Customer: A person who has electronically registered with the organization and uses its financial or banking services.

Anti-Money Laundering and Counter Terrorist Financing Law No. (20) of 2021

The Anti-Money Laundering and Counter Terrorist Financing Law No. (46) of 2007 and its Amendments (“Repealed AML/CFT Law”) was repealed and replaced by the Jordanian Anti-Money Laundering and Counter Terrorist Financing Law No. (20) of 2021 (“AML/CFT Law”). The AML/CFT Law’s legislative structure, in particular, realizes a stronger, more thorough oversight model, further accounting for the reinforced regulatory measures being applied globally in respect to AML/CFT.

According to Article 3 of the AML/CFT Law, the following actions are deemed to constitute money laundering:

• Regardless of whether or not they were involved in the crime, anyone who, while having knowledge that the money’s in question are the proceeds of illicit activity.
• Transmits or moves such funds with the intent to conceal their true source, misrepresent it, or assist anybody who was a principal or accessory to the first crime.
• Conceals or portrays falsely the true nature, source, location, method of disposal, transaction record, or any other rights associated with the monetary amount in question.
• Any individual who:
• Proceeds with committing any of the aforementioned crimes.
• Aids, influences, facilitates, or conceals such crimes.
• Uses, manages, invests, or possesses such moneys.

In Article 4 of the AML/CFT Law, which addresses the financing of terrorism, it is stated that any person who:

• Willfully provides or collects money, whether directly or indirectly, from a lawful source or not, knowing that it will be used entirely or in part to finance a terrorist attack by a terrorist or terrorist group.
• With a group of other people, intentionally participates in or helps to conduct the crime of financing terrorism.
• Provides funding for people to go to nations that are not their countries of residence or nationality in order to commit, plan, prepare for, contribute to, facilitate, or give or receive training for the commission of such crimes.

Definition of PEPs

The law likely defines who qualifies as a politically exposed person (PEP). Typically, PEPs include individuals who hold prominent public positions, such as government officials, heads of state, judges, and high-ranking military officers, as well as their immediate family members and close associates.

Enhanced Due Diligence (EDD)

Financial institutions and other covered entities are required to apply enhanced due diligence measures when dealing with PEPs. This involves conducting more thorough customer due diligence to assess the source of funds and wealth of PEP clients.

Obligations on Reporting Entities

Law No. 20 mandates that reporting entities, including banks, financial institutions, and designated non-financial businesses and professions (DNFBPs), implement comprehensive AML/CFT programs. These programs must include risk-based procedures for identifying and verifying the identity of customers, especially PEPs.

Record-Keeping

Reporting entities must maintain records of customer identification and transaction data for a specified period, as defined by the law.

Reporting Suspicious Activities

Reporting entities are obligated to report suspicious transactions to the Financial Intelligence Unit (FIU) or relevant authorities. This includes any transactions involving PEPs that raise suspicions of money laundering or terrorist financing.

Sanctions and Penalties

The law likely outlines penalties for non-compliance, which may include fines, sanctions, or criminal charges against individuals or entities that fail to adhere to AML/CFT obligations.

References:

1. Al Tamimi & Co
2. Anti Money Laundering & Counter Terrorist Financing Unit