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Jordan Enacts Tougher Banking Regulations to Combat Money Laundering and Terrorist Financing

The Hashemite Kingdom of Jordan has enacted a new anti-money laundering (AML) and counter-terrorist financing (CFT) law, aimed at strengthening its regulatory framework against financial crimes. The AML/ CFT Law No. 20 of 2021 replaces the previous Anti-Money Laundering and Counter Terrorist Financing Law No. 46 of 2007 and its amendments.

New Oversight Model

The new law introduces a more comprehensive and robust oversight model, aligned with global best practices in combating money laundering and terrorist financing. The AML/ CFT Law criminalises the laundering of proceeds from criminal activities, as well as the financing of terrorism, and sets out specific obligations for entities subject to its scope.

Criminalisation of Money Laundering and Terrorist Financing

  • Any person who knowingly engages in transactions related to the proceeds of criminal activities can be held liable for money laundering.

  • This includes individuals and entities that transfer or transport funds with the intention of concealing their illegitimate source, as well as those that conceal or misrepresent the true nature of the transaction.

  • Terrorist financing is deemed committed by anyone who provides or collects funds with the knowledge that they will be used to commit an act of terror.

  • This includes individuals and entities that provide financial support to terrorist organisations, as well as those that facilitate travel for the purpose of committing acts of terrorism.

Notification Obligations

The AML/ CFT Law has also revised the classification of entities subject to its obligations, with a focus on increasing specificity and clarity. The law now excludes persons or companies exercising activities supervised by the Jordan Insurance Commission, as these are now regulated by the Central Bank of Jordan.

  • In addition, the law limits the scope of entities subject to AML/ CFT obligations to:
    • Lawyers
    • Legal practitioners
    • Legal accountants arranging and/or performing financial operations on behalf of other persons and/or entities

Reporting Standards

The AML/ CFT Law also relaxes reporting standards by allowing disclosure of reports submitted to the Anti-Money Laundering and Counter-Terrorist Financing Unit (Unit) in certain circumstances, such as:

  • Intergroup disclosures between financial institutions within a single group
  • Disclosure to parties legally authorised to access such reports

Authorities under the AML/ CFT Law

Authorities under the AML/ CFT Law are required to undertake various procedures aimed at capturing financial crime and reporting it to the Unit. These include:

  • Field and office inspections
  • Communication with foreign authorities that supervise financial crime
  • Retention of reports and statistics on information gathered pursuant to the law

Conclusion

The AML/ CFT Law marks a significant development in Jordan’s efforts to combat money laundering and terrorist financing. By adopting a constructive approach that builds on, improves, and makes more detailed the framework set under the previous law, Jordan is strengthening its regulatory framework against financial crimes.

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