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2019-01-01

Circular No. 253: Internal Audit on the Anti-Money Laundering and Counter-Terrorist Financing Environment

The Palestine Monetary Authority mandates that all banks operating in Palestine incorporate comprehensive assessments of their anti-money laundering and counter-terrorist financing environments into future internal audit plans. These audits must evaluate the effectiveness of AML/CFT policies, risk-based approaches, staff training, transaction monitoring systems, record retention practices, and the remediation of prior audit deficiencies. Additionally, banks are required to submit their most recent internal audit report on AML/CFT to the Authority within one week to verify the adequacy of their compliance functions and monitoring procedures.

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Palestine Monetary Authority

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (253 / 2019)
To all banks operating in Palestine
Date: Tuesday, October 29, 2019

Subject: Internal Audit on the Anti-Money Laundering and Counter-Terrorist Financing Environment.

Continuing the Palestine Monetary Authority's efforts to monitor and strengthen the anti-money laundering and counter-terrorist financing environment, and to ensure the effectiveness of implemented measures, the bank's internal audit department must regularly evaluate its anti-money laundering and counter-terrorist financing programs and procedures. Accordingly, we emphasize the necessity to act on the following:

1. Include in future internal audit plans an examination of the anti-money laundering and counter-terrorist financing environment, which shall cover:

  • The efficiency and effectiveness of anti-money laundering and counter-terrorist financing policies, procedures, and operational programs.
  • Due diligence and enhanced due diligence procedures, and the extent of focus on high-risk customers and transactions.
  • The extent of the effectiveness of applying the risk-based approach.
  • The effectiveness of bank staff in implementing policies and procedures.
  • The effectiveness and relevance of training programs provided to bank staff.
  • The efficiency and effectiveness of the standards and scenarios configured on banking programs and systems, including their ability to identify risk, abnormal activity, and suspicious cases.
  • The appropriateness of record retention and provision of related statistics.
  • The extent to which the bank addresses deficiencies identified during previous audit operations.

2. Provide us within one week from the date of this circular with the latest internal audit report conducted on the anti-money laundering and counter-terrorist financing environment to evaluate the efficiency and effectiveness of the function in mitigating money laundering and terrorist financing risks, assess the quality and effectiveness of due diligence procedures, systems, and programs used to monitor non-routine transactions and suspicious cases, and review the measures taken to address identified deficiencies.

Supervision and Inspection Department
Palestine Monetary Authority

Ramallah & Al-Bireh Governorate - Palestine, P.O. Box 452
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
Gaza - Palestine P.O. Box 4026
Fax: +970 8 7844487 | Tel: +970 8 7875713
www.pma.ps

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