Financial Crime World

Risk-Based Approach to Financial Crime Prevention in Jordan

Jordan has made significant strides in implementing a risk-based approach to financial crime prevention, focusing on combating money laundering and terrorist financing. The country’s regulatory bodies work together to ensure effective compliance with anti-money laundering (AML) regulations.

A key component of Jordan’s AML framework is the legal and regulatory framework, which includes revisions to align with international standards. The country has also established a range of obligations on financial institutions, including:

  • Banks: Establish anti-money laundering policies and procedures
  • Money exchangers: Implement customer due diligence measures, report suspicious transactions, and maintain records

Enhanced Due Diligence Measures

Financial institutions are required to apply enhanced due diligence measures when dealing with:

  • Politically Exposed Persons (PEPs): Individuals who hold prominent public positions, such as government officials, heads of state, judges, and high-ranking military officers

AML/CFT Law No. 20 of 2021

The AML/CFT Law No. 20 of 2021 has replaced the repealed Anti-Money Laundering and Counter Terrorist Financing Law No. 46 of 2007, with a stronger and more thorough oversight model.

  • Definition of Money Laundering: Any activity that involves proceeds from illegal activities, including concealing or misrepresenting the true nature of such funds

Reporting Entities

Reporting entities, including:

  • Banks
  • Financial Institutions
  • Designated Non-Financial Businesses and Professions (DNFBPs)

are required to implement comprehensive AML/CFT programs, which must include:

  • Risk-Based Procedures: For identifying and verifying the identity of customers, especially PEPs
  • Customer Identification and Transaction Data: Maintain records for a specified period and report suspicious transactions to the Financial Intelligence Unit (FIU) or relevant authorities

Sanctions and Penalties

Sanctions and penalties are in place for non-compliance, which may include:

  • Fines
  • Sanctions
  • Criminal Charges against individuals or entities that fail to adhere to AML/CFT obligations

Conclusion

Jordan’s risk-based approach to financial crime prevention is designed to combat money laundering and terrorist financing by implementing a comprehensive AML framework that includes revised laws, regulations, and obligations on financial institutions. The country’s efforts demonstrate its commitment to protecting its financial system and economy from the threats of financial crime.