Jordanian Banks Take Measures to Prevent Money Laundering and Terrorist Financing

AMMAN, JORDAN - To strengthen its efforts against money laundering and terrorist financing, Jordan has implemented a revised anti-money laundering (AML) and counter-terrorist financing (CFT) framework. The new law aims to provide a more comprehensive oversight model, aligning with international standards.

Key Provisions of the AML/CFT Law No. 20 of 2021

• Defines money laundering as any action taken to conceal or disguise the true nature, source, location, disposal mechanism, transaction record, property in, or any other rights attached to proceeds of criminal activities.
• Prohibits the financing of terrorism, which is defined as providing or collecting funds with knowledge that they will be used to commit an act of terror.
• The crime of terrorist financing can be committed even if the act of terror is not actually carried out.

Measures to Prevent Money Laundering and Terrorist Financing

• Banks in Jordan are required to:
  • Maintain accurate records and reports
  • Conduct regular audits
  • Implement risk-based customer due diligence measures
  • Report any suspicious transactions or activities to the AML/CFT Unit

Scope of Application

The law applies to a range of entities, including:

• Financial institutions
• Lawyers
• Legal practitioners
• Legal accountants who arrange and/or perform financial operations on behalf of other persons and/or entities.

New Notification Obligations for Authorities

• The Central Bank of Jordan, the Jordanian Securities Commission, and the Ministry of Industry, Trade and Supply are required to:
  • Conduct field and office inspections
  • Communicate with foreign authorities
  • Retain reports and statistics on information gathered pursuant to the AML/CFT Law

Enhancing Effectiveness

The revised framework is expected to enhance the effectiveness of anti-money laundering and counter-terrorist financing measures in Jordan, aligning with international standards and best practices.