Financial Crime World

Jordanian Banks Urged to Strengthen Financial Crime Prevention Measures

AMMAN - Jordan’s newly enacted Anti-Money Laundering and Counter Terrorist Financing Law (AML/CFT Law) has introduced a revised framework aimed at preventing financial crimes in the country. The law, which came into effect on September 16, 2021, seeks to strengthen regulatory safeguards and enhance oversight of financial institutions.

Key Provisions

  • Definition of Money Laundering: Any activity that involves the transfer or concealment of funds derived from criminal activities is considered money laundering.
  • Definition of Terrorist Financing: The provision or collection of funds with the knowledge that they will be used to commit acts of terror is considered terrorist financing.
  • Notification Obligations: Entities subject to the law must notify relevant authorities of specific transactions.

Changes to AML/CFT Obligations

  • Classification of Entities: The law revises the classification of entities to which AML/CFT obligations apply, excluding persons and companies under the supervision of the Jordan Insurance Commission.
  • Limited Scope of Reporting Requirements: The scope of activities covered by AML/CFT reporting requirements is limited to lawyers, legal practitioners, and legal accountants arranging financial operations on behalf of others.

Confidentiality and Disclosure

  • Disclosure of Reports: The law allows for limited disclosure of reports submitted to the AML/CFT Unit, including disclosures to relevant executives, compliance officers, and parties legally authorized to access such information. This relaxation of confidentiality is seen as a more considerate approach towards reporting standards.

Obligations of Authorities

  • Field and Office Inspections: Authorities must undertake procedures aimed at capturing financial crime and reporting it to the AML/CFT Unit.
  • Communication with Foreign Authorities: Authorities must communicate with foreign authorities in relation to financial crimes.
  • Retention of Reports and Statistics: Authorities must retain reports and statistics on information gathered under the law.

Impact on Banks

The AML/CFT Law is a significant development in Jordan’s efforts to combat money laundering and terrorist financing, and banks are urged to strengthen their financial crime prevention measures to comply with the new regulations. The law represents a constructive approach that builds on and improves the framework set by its predecessor, allowing for further scrutiny, monitoring, and capturing of financial crimes.

For more information on how this development may impact your business, please contact:

  • Dana Abduljaleel
  • Hakam Al Shawwa

at Al Tamimi & Company’s Banking and Finance team.