Financial Crime World

Jordan’s Economy Faces High Money Laundering Risks

Introduction

The Hashemite Kingdom of Jordan has been assessed as facing a “high” level of national money laundering risks, according to the World Economic Outlook database. This assessment highlights the importance of addressing these risks to maintain a stable economic environment.

Money Laundering Risks in Jordan

Domestic Proceeds

Domestic proceeds, or the total proceeds resulting from crimes committed within Jordan, were estimated to be around JD 941 million in 2018, accounting for approximately 3.7% of GDP. The majority of these proceeds come from predicate crimes such as:

  • Tax evasion
  • Robbery/criminal theft
  • Theft
  • Trafficking in illicit drugs
  • Corruption and bribery

Top Five Crime Types Generating Criminal Proceeds

According to a study by the International Monetary Fund (IMF), the top five crime types that generate criminal proceeds are:

  • Tax evasion (JD 695 million)
  • Robbery/criminal theft and theft
  • Trafficking in narcotic drugs and psychotropic substances
  • Fraud
  • Smuggling

Jordan’s Financial Sector

The financial sector plays a significant role in Jordan’s economy, accounting for around 93% of the country’s total assets. The banking sector is considered a key component of the financial system, with bank assets accounting for around 93.4% of the total assets of the financial sector.

Other Key Sectors

In addition to the banking sector, other sectors such as real estate and jewelry trading also play a significant role in Jordan’s economy. The volume of trading in the real estate market was estimated to be around JD 5 billion in 2018, with sales and purchases valued at around JD 4 billion or approximately 14% of GDP.

Measures to Mitigate Money Laundering Risks

To mitigate money laundering risks, Jordan has implemented various measures, including:

  • The passage of its first Anti-Money Laundering (AML) / Combating the Financing of Terrorism (CFT) legislation in 2018
  • The establishment of a Financial Intelligence Unit to detect and prevent money laundering and terrorist financing activities

Conclusion

In conclusion, Jordan’s economy faces significant money laundering risks due to its high level of criminal proceeds from various predicate crimes. To address these risks, the country must continue to implement effective AML/CFT measures and strengthen its financial sector regulations to prevent illegal activities and maintain a stable economic environment.