CBJ amends anti-money laundering and terrorist financing bank regulations


Published: 2018-06-30 15:51

Last Updated: 2018-06-30 17:48

The regulations were introduced in 2010.
The regulations were introduced in 2010.

The Central Bank of Jordan (CBJ) issued amendments on the 2010 regulations on anti-money laundering (AML) and terrorist financing (TF) for licensed banks, after the approval of the National Committee for Combating Money Laundering and the Financing of Terrorism, Petra news agency reported on Saturday.

According to the CBJ statement, the following three factors prompted the amendments: the recommendations of the FATF 2012 (Financial Action Task Force), developments in domestic and international markets, and the need to strengthen the AML and TF framework in the country.

One of the most important amendments introduces the strengthening of the risk-based approach. Accordingly, banks will now be required to carry out a comprehensive assessment on an annual basis in accordance with a procedure approved by their Board of Directors.

The methodology aims to identify assess and understand the risks of money laundering and terrorist financing in relation to customers, countries, geographic regions, products, services, processes and service-delivery channels.

The CBJ pointed out that the role of risk management is consistent with the nature, size and complexity of their operations and the level of risk of money laundering and terrorist financing. The Bank's risk management function is aligned and integrated with the overall risk management framework.

The new guidelines classify customers according to their degree of risk and emphasize the need for policies, checks and procedures to manage and reduce the risks of money laundering and terrorist financing. They additionally focus on due diligence measures consistent with the degree of risk identified by the evaluation.

They also detail the procedures required to verify and identify the customers, both natural or legal persons, affirming the need to identify and verify the real and final beneficiary, in accordance with the nature of the potential risks.

Furthermore, a risk assessment system has to be established in order to determine which customers or real beneficiaries fall under the high-risk category, Banks, whether acting as the source or recipient of the financial transfer, will have to set and implement procedures to assess risk.

Finally, the delivery of training programs on combating money laundering and terrorist financing for bank employees of all levels will become mandatory.

The CBJ indicated that the new regulations came into force on June 26 of this year.