Jordanian Financial Institutions Face New Compliance Challenges with AML/ CFT Law Enforcement
The Jordanian government has recently implemented a new Anti-Money Laundering and Counter Terrorist Financing (AML/CFT) Law, No. 20 of 2021, to strengthen its financial regulations and combat money laundering and terrorist financing activities in the country.
Key Requirements for Financial Institutions
Under the new law, financial institutions are now required to implement robust anti-money laundering measures, including:
- Enhanced customer due diligence
- Reporting suspicious transactions
- Maintaining accurate records of all transactions
- Conducting regular risk assessments
- Implementing controls to prevent money laundering and terrorist financing
The AML/CFT Law defines money laundering as the concealment or misrepresentation of the true nature, source, location, disposal mechanism, transaction record, property in, or any other rights attached to moneys in question. The law also covers the financing of terrorism, which is defined as providing or collecting funds with the knowledge that such funds will be fully or partially used to commit an act of terror.
Significant Changes to Previous AML/CFT Framework
The new law introduces several significant changes to the previous AML/CFT framework, including:
- Revised classification of entities subject to AML/CFT obligations
- Exclusion of persons or companies exercising activities subject to the supervision of the Jordan Insurance Commission
- Inclusion of lawyers, legal practitioners, and legal accountants arranging and/or performing financial operations on behalf of other persons and/or entities
Confidentiality and Disclosure Obligations
The law prohibits disclosure of reports submitted to the Anti-Money Laundering and Counter Terrorist Financing Unit (Unit) to any other person, but allows for exceptions in cases where disclosure is necessary for commercial or legal reasons. The law obligates authorities, including the Central Bank of Jordan, the Jordanian Securities Commission, and the Ministry of Industry, Trade and Supply, to undertake a range of procedures to capture financial crime and report it to the Unit.
Conclusion
The new AML/CFT Law represents a significant step forward in the fight against money laundering and terrorist financing in Jordan. Financial institutions operating in the country must now implement robust compliance measures to ensure they are in line with the new law’s requirements.
If you require further information or guidance on the implications of this new law for your business, please do not hesitate to contact Al Tamimi & Company’s Banking and Finance team. We regularly advise on financial agreements and transactions and can provide expert advice on AML/CFT compliance matters.