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2019-01-01

Instructions No. (12) of 2019 Regarding Banks Granting Sub-Agencies

The Palestine Monetary Authority issued Instructions No. 12 of 2019 to regulate the granting of sub-agencies by licensed banks operating in Palestine. The directive mandates that banks obtain prior written regulatory approval before appointing agents, requiring licensed agents, formalized work agreements with service exclusivity clauses, strict adherence to anti-money laundering protocols, and comprehensive record-keeping. Furthermore, it establishes joint liability for banks and agents in implementing customer due diligence measures and stipulates legal penalties for non-compliance under prevailing Palestinian financial and counter-terrorism financing laws.

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (12) of 2019

Regarding Banks Granting Sub-Agencies

Pursuant to the provisions of Decision-Law No. (9) of 2010 concerning Banks, particularly Articles (13) and (72) thereof,
and pursuant to the prevailing Anti-Money Laundering and Combating the Financing of Terrorism Law,
and in accordance with the powers delegated to us,
and in the public interest,
we have issued the following Instructions:

Article (1)

Scope of Application

The provisions of these Instructions shall apply to all banks operating in Palestine licensed by the Palestine Monetary Authority to conduct banking business.

Article (2)

Conditions for Granting Sub-Agencies

  1. No bank shall grant sub-agencies to any person to conduct permitted banking activities specified in the Law without obtaining the prior written approval of the Palestine Monetary Authority, in accordance with the following:

    a. The agent must hold a license from the Palestine Monetary Authority.
    b. Organize a work agreement between the bank and the agent, containing the terms and conditions of contracting between the two parties, provided that it stipulates the exclusivity of service provision through a specific entity.
    c. Subject agents to anti-money laundering and counter-terrorist financing programs and financial transaction monitoring, and work to include them in training programs on service delivery requirements and the application of identification, verification, and due diligence procedures.
    d. Maintain a register of data and details of sub-agencies granted to agents, including at a minimum the agent's name, address, commercial registration number, nature of the agency, and date of grant.

  2. Both the bank and its agent shall be responsible for applying the customer due diligence measures specified under Recommendation No. (10) of the Financial Action Task Force recommendations and prevailing Instructions.

  3. The bank that granted a sub-agency must verify the agent's compliance with the provisions of paragraph (2) of this Article.

Article (3)

Penalties

Any person who violates these Instructions and fails to comply with them shall be subject to the penalties stipulated under the provisions of the Banks Law and the prevailing Anti-Money Laundering and Combating the Financing of Terrorism Law in Palestine.

Article (4)

Implementation and Enforcement

All competent authorities shall, each within their respective jurisdiction, implement the provisions of these Instructions, which shall apply from the date of their issuance.

Issued in the city of Ramallah on Monday, corresponding to: 23/12/2019 AD

Supervision and Inspection Department
Palestine Monetary Authority

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 2835733
www.pma.ps

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