Financial Crime World

Complying with Anti-Money Laundering and Know Your Customer Regulations: A Must for Small Businesses in Occupied Palestinian Territory

Introduction

As the Palestinian economy continues to grow, small businesses are being urged to take necessary steps to comply with anti-money laundering (AML) and know your customer (KYC) regulations. The Financial Follow-Up Unit (FFU), an independent organization based at the Palestine Monetary Authority (PMA), is responsible for supervising AML/CTF activities in the territory.

Objectives of AML Regulations

According to Article 19 of the Anti-Money Laundering Law of 2007, the FFU’s objectives include:

  • Preventing money laundering
  • Protecting the national economy from its damaging impacts

The National Committee on Anti-Money Laundering, which oversees the FFU, develops regulations aimed at preventing money laundering and putting in place an efficient mechanism for doing so.

Compliance Requirements for Small Businesses

To comply with AML/CTF regulations in Palestine, small businesses are advised to develop a comprehensive compliance program that includes:

  • Obtaining information from organizations governed by Palestine’s anti-money laundering law about transactions that may be part of money laundering operations
  • Gathering and evaluating information
  • Disclosing information and outcomes of information analysis
  • Collecting data on financial transactions from official and unofficial sources
  • Providing recurring training for compliance and anti-financial crime departments

Reporting Suspicious Transactions

Small businesses are also required to report suspicious transactions to the FFU. According to Palestinian AML law, regulated entities must:

  • Improve internal collaboration in reporting suspicious transactions based on existing and foreseeable national and international standards
  • Report suspicious transactions to the FFU when transactions have a value of equal to or greater than the amount set by the country’s AML Committee

Additional Requirements for Specific Industries

Real estate agents and brokers are required to notify the FFU of any dubious real estate sales or purchases they complete on behalf of their clients.

Financial institutions, non-financial businesses, and professions, as well as their managers, officials, and workers, are not subject to legal prosecution for carrying out a suspicious transaction that was voluntarily reported in compliance with local AML regulations.

Consequences of Non-Compliance

Failure to comply with AML/CTF regulations can result in severe consequences, including:

  • Financial penalties
  • Criminal prosecution

As such, small businesses in the occupied Palestinian territory are urged to take necessary steps to ensure compliance with these regulations to protect their reputation and avoid any potential legal or financial risks.