Financial Crime World

Jordan’s Economic Outlook: A Growing Middle-Income Economy Faces Money Laundering Risks

A High-Level Risk of National Money Laundering

The Hashemite Kingdom of Jordan, a founding member of the Middle East and North Africa Financial Action Task Force (MENAFATF), has been assessed as facing a “high” level of national money laundering risks.

Economic Overview

According to the World Economic Outlook database, Jordan’s economy is considered “medium” globally, with a gross domestic product (GDP) of JD 31.1 billion and a per capita GDP of JD 3,145.

Financial Sector

The country’s financial sector, which includes banks, money exchange companies, and designated non-financial businesses and professions such as real estate offices, jewelry shops, and lawyers, has total assets worth approximately JD 48,378 million. Banks account for the majority of these assets, with a 93.4% share of the financial sector’s total assets.

Money Laundering Risks

Jordan faces money laundering risks due to its geographical location and economic activities. The country is bordered by Syria, Iraq, Palestine, and Saudi Arabia, making it an attractive hub for illegal activities such as drug trafficking and terrorist financing.

Predicate Crimes

According to a recent assessment, the value of criminal proceeds from predicate crimes committed within Jordan is estimated to be around JD 941 million, or approximately 3.7% of GDP. The majority of these proceeds are generated through:

  • Tax evasion (93%)
  • Robbery/criminal theft
  • Theft
  • Trafficking in illicit drugs
  • Corruption and bribery

Tax Evasion

Tax evasion is a significant concern, with the value of criminal proceeds from this activity estimated to be around JD 695 million. The majority of these proceeds are generated in cash, while almost one quarter is generated through financial assets.

Efforts to Combat Money Laundering and Terrorist Financing

The country’s authorities have taken steps to combat money laundering and terrorist financing, including passing anti-money laundering/counter-terrorist financing (AML/CFT) legislation in 2007. However, more needs to be done to address the significant money laundering risks facing Jordan.

Conclusion

While Jordan’s economy is growing and has made progress in combating financial crimes, it still faces significant challenges posed by money laundering and terrorist financing. The country’s authorities must continue to take robust measures to combat these threats and protect its financial system.