Anti-Money Laundering and Terrorist Financing

The PCMA aims to initialize the appropriate environment to achieve stability and growth of capital, to regulate, develop and monitor the capital market in Palestine, and to protect the rights of investors, in view of its responsibilities and objectives aiming at achieve stability in the capital market, and in order to prevent the capital market sectors from the risks of money laundering and terrorist financing activities, which may threaten the continuation of these sectors and expose them to financial, operational, legal risks among others. As of the beginning of 2022, the PCMA continued its role in harmonizing compliance in implementing the national strategy to combat money laundering and terrorist financing, as follows:

Legislation:

The circulars issued by the PCMA would raise the efficiency and enhance the ability of companies to confront the risks of money laundering and terrorist financing, and follow the risk-based approach in detecting suspicious transactions. In 2022, several circulars were issued, as follows:

• Circular regarding the sending of an annual report on all activities related to combating money laundering;
• Circular containing 10 resolutions issued by the UN Security Council;
• Circular containing 3 decisions regarding high-risk countries that are prohibited to deal with and publication of same on the PCMA’s website;
• Circular relative to publishing Directives No. 2 of 2022 relating to combating money laundering and terrorist financing for financial institutions;
• Publication of Directives No. 1 of 2022 regarding the implementation of Security Council resolutions, and registration on the website of the implementation of Security Council resolutions and immediate implementation;
• Circular regarding the implementation of the provisions of Decree No. 39 of 2022 regarding combating money laundering and terrorist financing;
• Circular regarding the implementation of the provisions of the Presidential Decree in relation to implementing Security Council Resolutions No. 14 of 2022;
• Circular regarding the opening bank accounts for insurance companies;
• Circular regarding the work of insurance agents and brokers;
• Circular regarding updating work policies and procedures; and
• Circular regarding the self-assessment guide.

Specialized field inspection rounds and preparation of risk registers:

• Since the beginning of 2022, the General Administration of Securities has completed 14 inspection rounds on all securities companies and the Stock Exchange, pursuant to the risk-based plan.
• The General Administration of Financial Leasing represented by its Monitoring and Inspection Department has completed 8 specialized inspection rounds in cooperation with the Anti-Money Laundering and Terrorist Financing Department.
• As of the beginning of 2022, the General Insurance Administration has completed 10 inspection rounds aiming to verify viability of companies and their compliance with the provisions of anti-money laundering and terrorist financing laws and directives.

Specialized field inspection visits upon request of the Financial Follow-up Unit:

The General Securities Administration has delegated an inspection team at the request of the Financial Follow-up Unit for the year 2022, in order to verify the integrity of the due diligence measures taken by a securities company regarding a client’s file and its financial movements.

Administrative Violations and Penalties:

• The PCMA’s Board of Directors imposed a second-degree penalty of (10,000) ten thousand Jordanian Dinars as a fine against Al Hadaf Jordan and Palestine Securities Company.
• The General Department of Mortgage and Financial Leasing directed a correction letter to a financial leasing company based on an inspection round at the end of the year 2021. This letter included granting the company a deadline to amend the policy and procedures for combating money laundering and terrorist financing crimes, so that they are comprehensive and sufficient for the requirements stipulated in the laws, directives and legislation.
• The General Department of Mortgage and Financial Leasing dispatched a written warning to 3 financial leasing companies for not providing the PCMA with an updated copy of the policies and procedures for combating money laundering and terrorist financing, after giving them a deadline to provide the PCMA with the updated copies.
• The General Directorate of Mortgage and Financial Leasing directed 7 letters for rectification of status based on the observations of the field inspection team.
• After completing the inspection rounds in the first half of 2022, the General Securities Administration formed investigation committees for 5 companies, to investigate the violations that were discovered during the field visit process, and after the completion of the meetings, a deadline was given to the companies to comply and rectify the situation for the violations.

Participation in conferences, workshops and training programs:

• The PCMA’s team specialized in providing the Financial Follow-up Unit with data and statistics relating to combating money laundering and terrorist financing participated in a workshop regarding the mutual evaluation of the State of Palestine on March 2^nd 2022 at the Carmel Hotel, Ramallah.
• A team from the PCMA participated remotely in a workshop entitled “The Real Beneficiary”, organized by the Financial Intelligence Unit in Ecuador, via Zoom on March 15-16^th
• A meeting was held with the liaison officer of a financial leasing company discussing the 2021 general inspection report. This meeting is considered feedback.
• In preparation for the process of mutual evaluation of the State of Palestine for 2022, many meetings and conferences were held with the Financial Follow-up Unit, and provided them with data and statistics to enhance the technical commitment and the effectiveness of the PCMA’s efforts in combating the money laundering and terrorist financing crimes.
• In continuation of the preparation for the mutual evaluation process of the AML/CFT system, a workshop was held entitled “Preparing Statistics and Information Required for the Mutual Evaluation Process”, at the National School – Abu Shkheidem on April 13^th 2022, where 12 employees of the PCMA participated therein.
• Responding to all inquiries received by the PCMA from the team of mutual evaluation experts, in line with the requirements of technical compliance.
• A meeting was held remotely via Zoom with experts from the World Bank, for training on the Mutual Evaluation Program for the State of Palestine.
• On July 6^th, 2022, a team from the PCMA and from the sectors under the monitoring and supervision of the PCMA was invited to participate in a workshop relating to the preparation of the PCMA and the sectors under its monitoring and supervision for mutual evaluation. The workshop was sponsored by the Chairman of the PCMA’s Board of Directors, and His Excellency the Governor/Chairman of the National Committee.
• On July 26^th 2022, a team from the PCMA was invited to participate in the fourth and final workshop to prepare the national authorities for the mutual evaluation process.
• On July 27^th 2022, the General Securities Administration held a workshop as an orientation of the liaison officers of the securities companies for the mutual evaluation process.
• Participation in the workshop of the Secretariat of the Middle East and North Africa Financial Action Task Force (MENAFATF) relative to the preparation of the State of Palestine for the mutual evaluation process, direct results (7, 8, 9), which was held on April 8^th, 2022, at the Carmel Hotel, Ramallah.
• On August 27^th 2022, the PCMA published an educational video about the most important achievements of the PCMA in combating money laundering and terrorist financing.
• Participation in the international symposium on “Supervising and Investigating Virtual Assets” on September 6-7^th, 2022.
• Participation in a workshop on the implementation of Security Council resolutions on October 5^th
• The PCMA, in cooperation with the Financial Follow-up Unit, held, on October 11^th 2022, a workshop for liaison officials for all sectors subject to the control and supervision of the PCMA on mechanisms for implementing Security Council resolutions.
• On October 18^th 2022, the General Department of Mortgage and Financial Leasing held a workshop to train communication officials in financial leasing companies on how to follow the risk-based approach and the mechanisms for conducting self-assessment.
• Participation in a workshop on the risk-based approach to financial institutions, professionals and unspecified financial businesses – in Cairo between December 13-15^th
• Participation in a workshop on the real beneficiary at the Carmel Hotel on December 22^nd, 2022.

Local and International Cooperation:

Request for local cooperation received from the competent authorities:

• During 2022, the PCMA responded to 15 inquiries and requests received from the Financial Follow-up Unit.
• Responding to the 10 letters received from the Office of the Attorney General.
• Responding to the letters received from the Corruption Crimes Court.
• Responding to the letters received from the Execution Departments and Court Decisions, totalling to 28 letters.

Outgoing request for international cooperation:

• The PCMA responded to an inquiry request from the Federation of Arab Securities Authorities about dealing in virtual currencies.
• The PCMA responded to an inquiry request from the Capital Market Authority in the Sultanate of Oman about the duties of the liaison officer and the terms of employment.