Financial Crime World

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Regulatory Compliance a Must for Financial Institutions in Jordan

In an effort to prevent money laundering and terrorist financing, the government of Jordan has implemented strict regulatory compliance measures for financial institutions operating within its borders. The country’s Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) regime is designed to ensure that all financial transactions are conducted in a transparent and secure manner.

Jordan’s AML/CTF Regime

At the heart of Jordan’s AML/CTF regime is the Jordan Anti-Money Laundering & Counter Terrorist Financing Unit (AMLU), which plays a central role in coordinating efforts to combat money laundering and terrorist financing. The unit works closely with other regulatory bodies, including the Financial Action Task Force (MENAFATF) - Mutual Evaluation Report, to ensure that Jordan’s AML/CTF framework is aligned with international standards.

The country has also established a legal and regulatory framework for AML and CTF measures, which includes the revision of regulations to align with international standards. The Anti-Money Laundering and Counter Terrorist Financing Law No. (20) of 2021, which replaced the repealed AML/CFT Law No. (46) of 2007, outlines the obligations on financial institutions to establish anti-money laundering policies and procedures.

Requirements for Financial Institutions

Under the new law, financial institutions are required to implement comprehensive AML/CFT programs that include:

  • Risk-based procedures for identifying and verifying the identity of customers, particularly Politically Exposed Persons (PEPs)
  • Maintenance of records of customer identification and transaction data for a specified period
  • Reporting of suspicious transactions to the Financial Intelligence Unit (FIU) or relevant authorities

Enhanced Due Diligence Measures

The government has also introduced enhanced due diligence measures for PEPs, which include:

  • Conducting more thorough customer due diligence to assess the source of funds and wealth of PEP clients
  • Failure to comply with these regulations can result in penalties, including fines, sanctions, or criminal charges against individuals or entities that fail to adhere to AML/CFT obligations.

Conclusion

In conclusion, regulatory compliance is a must for financial institutions operating in Jordan, as the country’s AML/CTF regime is designed to prevent money laundering and terrorist financing. Financial institutions must implement comprehensive AML/CFT programs, conduct enhanced due diligence on PEPs, maintain accurate records of customer identification and transaction data, and report suspicious transactions to ensure compliance with the law.

References

  • Al Tamimi & Co
  • Anti Money Laundering & Counter Terrorist Financing Unit