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AML Best Practices for Banks in Jordan

The Jordanian government has enacted a revised Anti-Money Laundering and Counter Terrorist Financing Law (AML/CFT Law) to strengthen the country’s regulatory framework against financial crimes. The law introduces significant changes, aiming to improve oversight and accountability among financial institutions.

An Overview of AML and CFT Regulatory Framework

Under the AML/CFT Law, money laundering is defined as any act that conceals or misrepresents the source, nature, location, or disposal of funds derived from criminal activities. The law also prohibits financing terrorism, which includes providing or collecting funds with knowledge that they will be used to commit terrorist acts.

Notification Obligations under AML/CFT Law

The law revises the classification of entities subject to AML/CFT obligations. For example:

  • Lawyers, legal practitioners, and legal accountants are now specifically included in the scope of entities that must report suspicious transactions.
  • The law prohibits disclosure of reports submitted to the AML/CFT Unit, except in certain circumstances where confidentiality may be waived.
    • Disclosure is allowed to executives, compliance officers, or parties legally authorized to access such information.

The law also obligates authorities to undertake various procedures to capture financial crime and report it to the Unit. These include:

  • Field inspections
  • Communication with foreign authorities
  • Retention of reports and statistics

Conclusion

The AML/CFT Law is a significant development in Jordan’s fight against money laundering and terrorist financing. The law builds on existing regulations, improving and detailing the framework set under the previous law. It is essential for financial institutions to understand and comply with these requirements to avoid potential risks and reputational damage.

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