AML/CTF compliance in Jordan

In Jordan, reporting entities (such as financial institutions, designated non-financial businesses and professions (DNFBPs), and other obligated entities) have several key obligations under Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws, particularly Law No. 46 of 2007 (amended in 2021) and associated regulations. These obligations are designed to help prevent, detect, and report money laundering and terrorism financing activities. The main obligations are as follows:

• Customer Due Diligence (CDD) and Know Your Customer (KYC). Reporting entities must conduct CDD to verify the identity of their customers and beneficial owners, particularly when establishing a business relationship, carrying out occasional transactions above a specified threshold (for example, for large wire transfers or high-value cash transactions), whenever there is suspicion of money laundering or terrorism financing, when the entity has doubts about the accuracy of previously obtained customer identification information and carry out enhanced Due Diligence (EDD). For high-risk clients (e.g., politically exposed persons (PEPs) or those in high-risk countries), reporting entities must apply enhanced due diligence measures.
• Ongoing Monitoring of Transactions. Reporting entities must continuously monitor customer transactions and business relationships to detect unusual or suspicious activities.This includes monitoring large, complex, or unusual transactions that lack a clear legitimate purpose or economic rationale.Entities must keep a record of all customer transactions and regularly update customer profiles.
• Suspicious Transaction Reporting (STR). Reporting entities are required to file Suspicious Transaction Reports (STRs) with the Anti-Money Laundering and Counter Terrorist Financing Unit (AMLU) when they suspect that a transaction may be related to money laundering or terrorism financing. Reports must be submitted promptly after the detection of suspicious activity, without tipping off the customer involved. Financial institutions, DNFBPs, and other obligated entities must have internal procedures for identifying and reporting suspicious transactions.
• Record Keeping. Reporting entities must maintain records of all customer transactions, account information, and other relevant documents for a minimum of 5 years.
• Internal Policies and Procedures. Reporting entities are required to establish and implement internal AML/CFT policies, procedures, and controls tailored to their business. This includes the appointment of a compliance officer responsible for overseeing the entity’s compliance with AML/CFT obligations, training programs for staff to ensure they understand and recognize money laundering and terrorism financing risks and are aware of their reporting responsibilities, risk assessment processes to identify, assess, and manage potential AML/CFT risks in their operations. The internal controls should ensure compliance with the laws and provide clear guidelines on how to identify and handle suspicious transactions.
• Reporting Large Cash Transactions. Reporting entities are required to report large cash transactions (above a certain threshold, typically determined by the Central Bank of Jordan) to the AMLU. Cash-based businesses, in particular, must pay close attention to large sums of money that could be indicative of money laundering.
• Compliance with International Sanctions. Reporting entities must comply with UN Security Council sanctions and national asset freezing measures related to terrorism financing. They are required to screen their customers against sanction lists and freeze assets without delay if they are linked to persons or entities designated by the United Nations or local authorities for terrorism financing or other illicit activities.
• Cooperation with Regulators and Law Enforcement. Reporting entities must cooperate with the AMLU, regulators, and law enforcement agencies by providing information and assistance during investigations related to money laundering or terrorism financing. Entities may be required to provide additional documentation, transaction records, and customer information upon request by the authorities.
• Cross-Border Reporting. Entities involved in cross-border financial transactions are obligated to report suspicious cross-border transfers and comply with the declaration requirements for the movement of large amounts of cash or financial instruments across Jordan’s borders.
• Training and Awareness. Entities are obligated to conduct regular training programs for employees to raise awareness of AML/CFT risks and ensure that employees understand their obligations regarding customer due diligence, monitoring, and reporting of suspicious transactions.
• Risk-Based Approach. Reporting entities are expected to adopt a risk-based approach to AML/CFT compliance. This means they must assess the level of risk associated with each customer, transaction, or service and apply the appropriate level of due diligence based on that risk.

• Reporting Currency Movements. There are obligations to declare the movement of currency or bearer negotiable instruments across the borders of Jordan, particularly if the amount exceeds a certain threshold. This is part of efforts to prevent cross-border money laundering and terrorism financing.
• Third-Party Reliance. Reporting entities may rely on third-party intermediaries (e.g., agents) for customer due diligence, but they remain responsible for ensuring that the CDD measures comply with Jordanian AML/CFT laws. These obligations aim to ensure that reporting entities in Jordan play a crucial role in the detection and prevention of money laundering and terrorism financing, safeguarding the country’s financial system from illicit activities.
• International Cooperation: Jordan collaborates with international bodies, including the FATF, to align its laws with global standards.