Best Practices for Banks in Jordan: Combating Money Laundering and Terrorist Financing
Jordan’s banking sector has long recognized the importance of combating money laundering and terrorist financing. In line with international standards, Bank of Jordan has implemented a comprehensive program to prevent these illicit activities.
Establishing an Anti-Money Laundering (AML) Group Policy
The bank has established an AML Group Policy, approved by its board of directors and circulated to all employees. This policy outlines the bank’s commitment to preventing the proliferation of weapons of mass destruction and complying with international recommendations.
Ensuring Effective Implementation
To ensure effective implementation, Bank of Jordan has set up a Compliance Department as an independent entity that reports directly to the board of directors. The department is responsible for:
- Verifying compliance with AML/Combating the Financing of Terrorism (CFT) requirements
- Reviewing the bank’s policy on an ongoing basis
- Providing recommendations for further development
Independent Unit for Suspicious Activity Detection
The bank has also established an independent unit within the Compliance Department, which reviews financial transactions and customer activities to detect any suspicious activity. This unit provides:
- Advice and guidance to other executive departments in the bank
- Periodic reports to the board of directors
Qualified Staff and Automated Systems
To support its AML/CFT program, Bank of Jordan has:
- Allocated qualified and trained staff
- Implemented automated systems
- Forecast necessary budgets
The board of directors grants employees of the Compliance Department the authority and access needed to perform their duties.
Designation of Money Laundering Reporting Officer (MLRO) and Deputy MLRO
The bank has appointed a Money Laundering Reporting Officer (MLRO) and Deputy MLRO to independently report any suspicions related to money laundering, terrorist financing, or tax evasion to the Financial Intelligence Unit (FIU).
Preventing Money Laundering and Terrorist Financing
To prevent money laundering and terrorist financing, Bank of Jordan has implemented:
- Know Your Customer (KYC) customer identification program in line with regulatory requirements
- KYC Customer Due Diligence Procedures based on a risk-based approach, including enhanced due diligence for high-risk customers
- Identification of the beneficial owner and ultimate beneficial owner of clients
- Monitoring financial transactions and customer activities
- Developing control procedures to prevent exploitation for illicit purposes
Whistleblower Channels and Protection Policy
The bank has also established whistleblower channels for employees to report any suspicions related to money laundering, terrorism financing, or tax evasion. The bank provides protection based on its early warning policy (Whistleblowing Policy) and encourages employees to report suspicious activity.
Deterrent Measures and Code of Conduct
To deter non-compliance with AML/CFT requirements, the bank has established deterrent measures and documented these within its Code of Conduct.
Risk Evaluations and Continuous Training Program
The bank conducts periodic evaluations of money laundering and terrorist financing risks across its affiliates and foreign branches, considering customer risks, product risks, service delivery channel risks, and geographic risks. Additionally, the bank has developed a continuous training program for all employees at all levels of management, including the board of directors.
Independent Audit by Internal Audit Department
The bank also conducts an independent audit by the Internal Audit Department on its AML/CFT program, submitting results and recommendations to the Audit Committee emanating from the board of directors.
By implementing these best practices, Bank of Jordan demonstrates its commitment to preventing money laundering and terrorist financing in line with international standards and regulatory requirements.