Financial Crime World

Jordan’s Financial Sector Grapples with Money Laundering Risks

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Amman, Jordan - A recent report by the International Monetary Fund (IMF) has assessed Jordan as facing a “high” level of national money laundering risks. The country’s risk score of 4.1 out of 7.0 indicates that its financial sector is vulnerable to illegal activities.

Money Laundering Risks in Jordan

The report highlights the significant amounts of criminal proceeds generated in Jordan, with an estimated value of JD 941 million or approximately 3.7% of GDP. The majority of these proceeds come from predicate crimes such as:

  • Tax evasion (93%): estimated to be approximately JD 695 million
  • Robbery/criminal theft: approximately JD 78 million
  • Theft: approximately JD 78 million
  • Trafficking in illicit drugs
  • Corruption and bribery

Designated Non-Financial Businesses and Professions

The report emphasizes the importance of designated non-financial businesses and professions, such as:

  • Real estate offices
  • Jewelry shops
  • Lawyers
  • Accountants

These industries play a significant role in the country’s economy, with the volume of trading in the real estate market being approximately JD 5 billion in 2018.

Jordanian Financial Sector Overview

The Jordanian financial sector is comprised of:

  • Approximately 17,600 regulated institutions, including:
    • Banks
    • Money exchange companies
    • Non-profit organizations Banks account for a significant portion of total assets, with bank assets making up 93.4% of the total assets in the financial sector in 2018.

Recommendations to Combat Money Laundering Risks

The report recommends:

  • Enhancing due diligence and monitoring to combat money laundering risks
  • Strengthening AML/CFT regulations
  • Increasing public awareness campaigns
  • Enhancing international cooperation to track and trace criminal proceeds

Conclusion

In conclusion, Jordan’s financial sector faces significant challenges in combating money laundering risks. The government must take swift action to strengthen regulatory frameworks, enhance transparency and accountability, and increase international cooperation to combat these threats.