Anti-Money Laundering and Terrorist Financing

Combating Money Laundering and Terrorist Financing Crimes

The risk management framework in the PCMA provides the overall intentions and directions of the PCMA regarding risk management. The risk management framework also offers procedures and arrangements for implementing and continuously improving risk management in line with the risk management context. Its key elements include establishing the context and acceptance of risk exposure, risk assessment (identification, analysis, and evaluation), risk treatment, information, communication, awareness, training, and the monitoring, tracking, and review of risks.

Anti-Money Laundering and Combating the Financing of Terrorism

The PCMA aims to create a suitable climate for achieving capital stability and growth, as well as to regulate, develop, and monitor the capital market in Palestine, and to protect investors’ rights. Based on its mission and objectives to achieve stability in the capital market, and in order to shield the capital market sectors from the risks of money laundering and terrorist financing, which could threaten the continuity of these sectors and expose them to financial, operational, legal, and other risks, the PCMA continued, at the beginning of 2023, to play its role in aligning compliance with the implementation of the national strategy for combating money laundering and terrorist financing, as follows:

Regulations:

The circulars issued by the PCMA are aimed at improving the efficiency and enhancing the capability of companies to face the risks of money laundering and terrorist financing, and to adopt a risk-based approach in detecting suspicious transactions. Several circulars were issued during 2023, as follows:

• Circular on submitting an annual report on all activities related to combating money laundering.
• Circular on the decisions issued by the United Nations Security Council, which are sent electronically by the Public Prosecution, totaling 11 circulars.
• At the beginning of February, the National Committee for Combating Money Laundering and Terrorist Financing issued several guidelines, the most important of which include (Guidance on the Real Beneficiary, Politically Exposed Persons, and Reporting Suspicious Transactions and Activities). The PCMA published these guidelines on its website and circulated them to all sectors under its supervision to reflect them in their policies and procedures.
• Circular on high-risk and prohibited countries, published on the PCMA’s website, with a total of 3 decisions.
• Circular on the enforcement of Instructions No. 4 of 2022 concerning the combating of money laundering and terrorist financing for financial institutions, dated 8/2/2023.
• Circular on the obligation of external auditors, dated 27/3/2023.
• Circular on the mobile application for implementing Security Council resolutions, dated 10/9/2023.
• Circular on participation in the Palestine anti-money laundering and terrorist financing accreditation program (PAMLA) dated 1/10/2023.
• Circular on precautionary measures dated 19/10/2023.

Specialized Inspection Tours and Preparation of Risk Registers

At the end of 2022, regulatory departments updated their risk registers, relying on updated systems to assess the risks of financial companies. These registers include criteria that consider the risks of money laundering and terrorist financing within the company, incorporating the four axes of risk assessment. A risk profile was prepared for each company individually, based on relative weights of examination elements, in addition to compliance elements included in local anti-money laundering and terrorist financing legislation.

In the beginning of 2023, regulatory departments developed operational plans based on the risk-based approach for the purposes of desk inspections and periodic field visits as needed. The objective was to verify the extent to which companies under the supervision of the PCMA comply with laws, instructions, circulars, and regulations related to anti-money laundering and terrorist financing operations. These plans have been implemented since the beginning of the year, with cooperation from the Anti-Money Laundering and Counter-Terrorist Financing Department for field visits to some leasing companies.

Administrative Violations and Penalties:

• A “warning” penalty was issued to an insurance company for failing to provide the PCMA with the self-assessment report within the given timeframe. It was granted an additional period to prepare the report and submit it to the PCMA.
• A “written warning” penalty was issued to a leasing company for failing to provide the PCMA with the external auditor’s report regarding the anti-money laundering and terrorist financing policies and procedures. It was given an additional period to prepare the report and submit it to the PCMA.

Participation in Conferences, Workshops and Training Programs:

• In response to an invitation from the Financial Monitoring Unit, a team from the PCMA participated in several meetings discussing the risks associated with virtual assets and their assessment.
• Meetings were held with various communication officials from companies under the supervision of the PCMA as a form of feedback.
• A series of meetings and workshops were conducted for communication officials, with one of the most important ones titled “Self-Assessment” to assist them in preparing assessments, identifying risk levels, and developing risk mitigation measures.
• A team from the PCMA participated in a workshop on the effective implementation of Security Council resolutions.
• Participation in a regional workshop on combating the proliferation of arms in Dubai.
• Participation in the 11th International Prosecution Conference.
• A working meeting was held to discuss reporting requirements according to the companies law under the PCMA’s Financial Monitoring Unit supervision.

Local and International Cooperation:

Requests for Local Cooperation Received from the Competent Authorities:

Respond to inquiries and requests received from the competent authorities and provide them with the necessary data within the legal powers of the PCMA in this regard, as follows:

• 15 applications from the Corruption Crimes Court were answered.
• 66 requests received from the enforcement departments and court decisions were answered.
• 15 requests received from the Financial Follow-up Unit were answered.
• 4 requests from the Attorney General’s Office were answered.

Requests for International Cooperation Issued/Received:

None.

Business Process Section:

• The Work Procedures Section was established at the Risk Management Department in the second quarter of 2023, and a planned plan was developed to review all work procedures for the administrative units in the PCMA, and to start holding a series of meetings with officials of administrative units to review their work procedures.