Jordan Adopts Risk-Based Approach to Anti-Money Laundering and Countering Terrorist Financing
Introduction
The Hashemite Kingdom of Jordan has recently introduced a revised Anti-Money Laundering and Counter Terrorist Financing Law (AML/CFT Law) No. 20 of 2021, which aims to combat financial crimes more effectively.
New Framework for Combating Financial Crimes
The AML/CFT Law replaces the previous law and introduces a more robust framework for combating financial crimes. The new law takes a risk-based approach to anti-money laundering and counter terrorist financing, recognizing that different sectors and entities pose varying levels of risk to the financial system.
Key Provisions
Definition of Money Laundering
Under the AML/CFT Law, money laundering is defined as any activity designed to conceal or disguise the true nature of illegally obtained funds, including proceeds from criminal activities.
Criminalization of Financing of Terrorism
The law also criminalizes the financing of terrorism, which includes providing funds to terrorist organizations or individuals with the intention of committing acts of terror.
Notification Obligations
Entities such as lawyers, legal practitioners, and legal accountants are required to notify the authorities if they suspect or have knowledge of any money laundering or terrorist financing activities.
Significant Changes
- Introduction of Notification Obligations: Entities under the scope of the law are now required to notify the authorities of suspicious activities.
- Enhanced Scrutiny: The law introduces a range of procedures for authorities, including field and office inspections, communication with foreign authorities, and retention of reports and statistics on information gathered.
- Strengthened Regulation: The law aims to enhance scrutiny of financial activity and strengthen regulation of Jordanian entities to counter money laundering and terrorist financing more effectively.
Expert Opinion
Experts say that the AML/CFT Law represents a significant step forward in Jordan’s efforts to combat financial crimes.
Quote from Dana Abduljaleel, Partner at Al Tamimi & Company
“The new law is a major improvement over its predecessor,” said Dana Abduljaleel. “It introduces a more risk-based approach to anti-money laundering and counter terrorist financing, which recognizes that different sectors and entities pose varying levels of risk to the financial system.”
Abduljaleel added that the law’s notification obligations will help to enhance transparency and cooperation between authorities and regulated entities.
Conclusion
The AML/CFT Law represents an important step forward in Jordan’s efforts to combat financial crimes and maintain the integrity of its financial system. The introduction of a risk-based approach and enhanced scrutiny procedures aim to strengthen regulation and protect the country’s financial system from illegal activities.