Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (3) of 2022

Concerning the Issuance and Receipt of Financial Remittances

Based on the provisions of Legislative Decree No. (39) of 2022 concerning the prevention of money laundering and the financing of terrorism, particularly Article (24) thereof, and in accordance with the powers delegated to us, and in pursuit of the public interest, we have issued the following Instructions:

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Article (1)

Definitions

The words and phrases below shall have the meanings specified for them, unless the context indicates otherwise:

• The Law: Legislative Decree No. (39) of 2022 concerning the prevention of money laundering and the financing of terrorism and its amendments.
• Person: Natural or legal person.
• Client: Person or legal arrangement.
• Financial Institution: The entity subject to the supervision of the Palestine Monetary Authority and licensed to provide financial remittance services.
• Financial Remittances: A financial transfer issued or received through the financial institution via electronic means on behalf of the originator, whether Palestinian or foreign, whereby funds are sent and received for a specific purpose for the benefit of a beneficiary at another financial institution, regardless of whether the originator and beneficiary are the same person.
• Consolidated Transfer: A file consisting of a number of individual financial remittances that may be directed to a specific person or different persons and are sent to the same financial institutions.
• Originator: The person creating the financial remittance.
• Beneficiary: The person receiving the financial remittance at any financial institution inside or outside Palestine.
• Legal Arrangement: As defined in the Law.
• Beneficial Owner: As defined in the Law.
• Payment Chain: The direct end-to-end payment chain through which the financial remittance and the accompanying payment message are transferred together from the originating financial institution to the beneficiary financial institution directly or through one or more intermediary financial institutions.
• Payment Coverage: The financial remittance that combines a payment message sent directly by the originating financial institution to the beneficiary financial institution with the transfer of payment instructions (coverage) from the originating financial institution to the beneficiary financial institution through one or more intermediary financial institutions.

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Article (2)

Objective and Scope of Application

1. The provisions of these Instructions aim to:

   • a. Regulate the service of issuing and receiving financial remittances, including payment chains and payment coverage.
   • b. Mitigate money laundering and terrorism financing risks associated with the execution of financial remittances.

2. The provisions of these Instructions apply to all financial institutions licensed by the Palestine Monetary Authority to provide financial remittance services within Palestine, and to money or value transfer service providers, provided that these Instructions comply with the following:

   • a. Any transfer resulting from a cash withdrawal or purchases made using a credit card or prepaid debit cards shall not be used to execute financial remittances.
   • b. Transfers and settlements conducted between financial institutions when the originator and beneficiary are financial institutions acting on their own account.

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Article (3)

Conditions for Issuing and Receiving Financial Remittances

In addition to what is stipulated in any other legislation, the financial institution must comply with the following conditions to issue and receive financial remittances:

1. Develop risk-based policies, procedures, and business models to execute financial remittances, provided they include financial remittance information, identification and verification procedures, and when to execute, reject, or suspend financial remittances lacking required information about the originator or beneficiary, along with appropriate follow-up procedures and record retention.

2. Retain all information and data related to external financial remittances.

3. When the required financial remittance information is available to the beneficiary financial institution and competent authorities through other means, the originating financial institution must comply with the following:

   • a. Include in the financial remittance the originator's account number or a unique remittance reference/identification number for the purpose of tracking the financial remittance path to the originator or beneficiary.
   • b. Provide the beneficiary financial institution and competent authorities with all information related to the financial remittance within a maximum period of three days from the date of receiving the information request.

4. Exercise due or enhanced diligence commensurate with the risk-based approach in accordance with the effective Instructions.

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Article (4)

Identification and Verification Procedures

The financial institution must comply with the following when sending and receiving financial remittances inside and outside Palestine:

1. Ensure that all information includes the following accurate data:

   • a. Data and information about the originator as follows:

     1. Name of the originator as per personal identification document or registration and licensing certificates.
     2. ID number of the originator or passport for non-Palestinians, for natural persons.
     3. Registration number of the originator for legal persons.
     4. Address of the originator and date and place of birth/registration.
     5. Nationality of the originator.
     6. Unique remittance reference/identification number.

   • b. Data and information about the beneficiary as follows:

     1. Name of the beneficiary as per personal identification document or registration and licensing certificates.
     2. Identification or registration document number of the beneficiary, for incoming remittances.
     3. Country and address of the beneficiary.
     4. Beneficiary financial institution and its address.

   • c. Subject to what is stated in paragraphs (b/1) and (b/1), the financial institution must ensure that all financial remittances also include accurate data about the account numbers of the originator and beneficiary used to execute the remittance, and in case no account exists for either, a unique process identification number shall be included to track it.

   • d. Other data and information:

     1. Purpose of the financial remittance.
     2. Financial relationship between the originator and beneficiary.

   • 2. Ensure that the originator's data provided when issuing the financial remittance matches the data held by the financial institution.

   • 3. Suspend the execution of the financial remittance if unable to comply with any of the requirements stipulated in these Instructions.

   • 4. The consolidated transfer file for individual cross-border remittances must contain the required and accurate information about the originator and beneficiary, as specified in paragraph (1) of this Article, in a manner that allows full tracking of this information in the beneficiary country, including the originator's account number or a unique process identification/reference number.

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Article (5)

Simplified Due Diligence Procedures

The financial institution may simplify identification procedures for cross-border financial remittances, provided it complies with the following:

1. Obtain prior written approval from the Palestine Monetary Authority.

2. The amount of a single financial remittance does not exceed USD 1,000 or its equivalent.

3. The financial remittance must include accurate information and data about the originator and beneficiary, including names and account numbers used to execute the remittance, and in case no account exists, a unique process identification number shall be included to allow tracking.

4. Verify client information in case of suspicion of money laundering or terrorism financing.

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Article (6)

Retention of Information and Records

The financial institution must comply with the following:

1. Retain financial remittance records, transactions, and documents obtained under due diligence in accordance with the provisions of the Law.

2. Provide electronic archiving of remittance records and transactions to facilitate the reconstruction of individual transactions and provide information in cases of prosecution for criminal activities.

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Article (7)

Obligations of Intermediary Financial Institutions

The intermediary financial institution, when executing financial remittances or a chain thereof on behalf of other financial institutions, must comply with the following:

1. Ensure that all information and data related to the originator and beneficiary of the financial remittance are transmitted.

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Article (8)

Obligations of Beneficiary Financial Institutions

The beneficiary financial institution, upon receiving any financial remittance, must comply with the following:

1. Take necessary measures to identify cross-border financial remittances lacking required information about the originator or beneficiary, including follow-up procedures during or after execution depending on the current situation.

2. Verify the identity of the beneficiary from the originating financial institution if not previously verified, and retain all received data and information.

3. Adopt risk-based policies and procedures to determine when to execute, reject, or suspend financial remittances lacking required information about the originator or beneficiary, and determine appropriate follow-up procedures.

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Article (9)

Money or Value Transfer Service Providers

Subject to what is stipulated in any legislation, no person shall provide money or value transfer services without obtaining prior written approval from the Palestine Monetary Authority.

2. Money or value transfer service providers must apply the provisions of these Instructions, whether the transfer is made directly or through an agent in any of the countries where they conduct business.

3. Money or value transfer service providers, if acting as the originator, must comply with the following:

   • a. Collect all information about the originator and beneficiary for the purpose of determining whether to submit a suspicious activity report.
   • b. Submit a suspicious activity report to the state in any of the countries related to the suspicious transaction and provide all information related to it.

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Article (10)

Application of Targeted Financial Sanctions

The financial institution must comply with the following:

1. Apply the sanctions stipulated in Presidential Decree No. (14) of 2022 concerning the implementation of Security Council resolutions, including taking freezing measures and necessary measures to prohibit transactions with persons and entities designated as prohibited to deal with.

2. Screen financial remittance parties against the sanctions lists issued by the United Nations Security Council and the National Designation List before executing the financial remittance.

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Article (11)

Penalties

Anyone who violates the provisions of these Instructions shall be punished in accordance with the provisions of the Law.

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Article (12)

Implementation and Enforcement

All competent authorities, each within their respective scope, must implement the provisions of these Instructions and apply them as of the date of issuance.

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Issued in Ramallah on 28/08/2022

Dr. Firas Malham Governor

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Note: At the bottom of the page, contact information appears:

• Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452 info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251

• Gaza - Palestine P.O. Box 4026 Fax: +970 8 2844487 | Tel: +970 8 2825713

www.pma.ps